Passenger vehicles and aircraft
Disclaimer
We do not guarantee the accuracy of this copy of the CRA website.
Scraped Page Content
Passenger vehicles and aircraft
Corporations
The input tax credit (ITC) for a passenger vehicle and aircraft of a corporation is based on the general rules (known as the primary use rule) for capital personal property.
These rules are:
- If you use the passenger vehicle primarily (more than 50%) in your commercial activities, you can claim a full ITC.
- If you use the passenger vehicle 50% or less in your commercial activities, you cannot claim an ITC.
You cannot claim an ITC for the portion of the purchase price over $30,000 for a passenger vehicle. If you are renting the passenger vehicle, the threshold is $800 per month.
Example
You are a corporation and you bought a passenger vehicle you will use 100% in your commercial activities. The cost of the vehicle is $40,000 plus GST. The maximum ITC you could claim is $30,000 x 5% = $1,500.
Individuals and partnerships
Individuals and partnerships, however, usually claim input tax credit (ITC) for passenger vehicles and aircraft based on the capital cost allowance (CCA) claimed for income tax purposes. If the use in commercial activities is 10% or less, you cannot claim any ITC. If the use in commercial activities is 90% or more, you can claim a full ITC.
You usually calculate your CCA for income tax purposes at the end of your fiscal year. Once you have calculated your CCA, calculate your ITC by using one of the formulas.
Example
You are self-employed and use your vehicle for commercial activities and personal use in Ontario. The use in commercial activities is 60% during 2013. The CCA that you claimed for income tax purposes for your vehicle is $3,000. The ITC you can claim is calculated as follows:
- $3,000 x 13/113 = $345.13
Forms and publications
- Guide RC4022, General Information for GST/HST Registrants
- GST/HST Memoranda Series Chapter 8-1, General Eligibility Rules
- GST/HST Memoranda Series Chapter 8-2, General Restrictions and Limitations
- Date modified:
- 2013-04-12