2008 Automobile Deduction Limits & Expense Benefit Rates for Business

• The ceiling on the capital cost of passenger vehicles for capital
  cost allowance (CCA) purposes remains at $30,000 (plus applicable
  federal and provincial sales taxes) for purchases after 2002. This ceiling
  restricts the cost of a vehicle on which CCA may be claimed for business
  purposes.
• The limit on deductible leasing costs remains at $800 per month
  (plus applicable federal and provincial sales taxes) for leases entered into
  after 2002. This limit, which ensures that the level of deductions for leased
  and purchased vehicles is consistent, is one of two restrictions on the deduction
  of automobile lease payments. A separate restriction prorates deductible
  lease costs where the value of the vehicle exceeds the capital cost
  ceiling.
• The limit on the deduction of tax-exempt allowances paid by employers
  to employees rose to 52¢ per kilometre for the first 5,000 kilometres
  driven and to 46¢ for each additional kilometre. For the Yukon
  Territory, Northwest Territories and Nunavut, the tax-exempt allowance
  rose to 56¢ for the first 5,000 kilometres driven and to 50¢ for each additional
  kilometre. The allowance amounts reflect the key cost components of
  owning and operating an automobile, such as depreciation, financing, maintenance
  and fuel costs.
• The maximum allowable interest deduction for amounts borrowed
  to purchase an automobile remains at $300 per month for loans related
  to vehicles acquired after 2002. This limit reflects the reasonable cost of
  financing a vehicle for business purposes.
• The general prescribed rate used to determine the taxable benefit
  relating to the personal portion of automobile operating expenses paid
  by employers rose to 24¢ per kilometre. For taxpayers employed principally
  in selling or leasing automobiles, the prescribed rate increased to 21¢
  per kilometre. The amount of the benefit reflects the costs of operating an
  automobile. The additional benefit of having an employer-provided vehicle
  available for personal use (i.e., the automobile standby charge) is calculated
  separately and is also included in the employee’s income.