Zero-emission vehicles – Finance drives ahead CCA expansion

Zero-emission vehicles – Finance drives CCA expansion

Finance’s draft legislation will expand temporary first-year CCA rate of 100% to cover more qualifying zero-emission vehicles and equipment

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Finance recently published draft legislation to expand the temporary first-year 100% capital cost allowance (CCA) rate on eligible zero-emission vehicles and equipment to include a wider range of eligible automotive equipment and vehicles.

This enhanced rate will apply to qualifying used and off-road automotive vehicles and equipment that do not currently benefit from the enhanced CCA rate. The 100% CCA rate will gradually phase out for vehicles and equipment that become available for use after 2023, until it eventually expires in 2028. Taxpayers will only be able to claim the enhanced allowance for the taxation year in which a qualifying vehicle is first available for use.

The draft measures were published on December 15, 2020, and will be effective as of March 2, 2020, the date Finance first announced that it would expand the enhanced CCA to qualifying off-road automotive equipment and vehicles.

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Information is current to December 22, 2020. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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