GEORGEOPOULOS & CO.

100% write off Zero Emission Vehicles

Tax Write-Off upto $55,000 plus tax

Budget 2019 proposed a 100-per-cent write-off for zero-emission vehicles to support business adoption. Eligible zero-emission vehicles include, a motor vehicle that is a plug-in hybrid (with a battery capacity of at least 7 kWh) or vehicles that are fully electric or fully powered by hydrogen, including light-, medium- and heavy-duty vehicles purchased by a business. This measure applies to eligible vehicles purchased and becoming available for use on or after March 19, 2019 and before January 1, 2024. Where the capital costs for eligible zero-emission passenger vehicles (e.g., cars and SUVs) exceeds $55,000, the 100 per-cent write off will be limited to $55,000 plus the federal and provincial sales tax that would have been paid if the vehicle was purchased for $55,000.

Vehicles in respect of which an incentive is paid under the new federal Incentive for Zero-Emission Vehicles Program will be ineligible for the 100-per-cent write-off.


The $5,000 federal purchase incentive: The Class 54 and 55 incentives will not apply where the $5,000 purchase incentive has been paid for vehicles with cost of $45,000 or less. Our understanding is that the incentive will be applied automatically at the vehicle dealer level meaning that only zero-emission passenger vehicles in excess of $45,000 will be eligible for the 100% write-off. The “point of sale” incentive means that it will be necessary to review the vehicle purchase documents to determine whether accelerated CCA is available. Note that there are caps in the number of vehicles which can benefit from the incentive each year

Rules

The new rules mean that instead of being able to amortize/claim 30% on your vehicle purchases we can now claim 100% of the electric vehicle in year one.

The new rules also increase the amount we are allowed to deduct $55,000 plus tax for electric vehicles. The previous limit was $30,000 plus tax.

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