Did you know that the Department of Finance recently updated important vehicle mileage and expense benefit rates that apply when using an automobile for business purposes, or for claiming certain tax-deductible travel expense?
The Department of Finance sets specific income tax deduction limits and expense benefit rates that apply when using an automobile for business purposes. On December 16, 2022, Finance confirmed that the limit on the deduction of tax-exempt allowances paid by an employer to an employee, who uses a personal vehicle for business purposes, will be set at 68 cents per kilometer for the first 5,000 kilometers (increased from 61 cents in 2022), and 62 cents for each additional kilometer (increased from 55 cents in 2022). For more information on the applicable automobile allowance rates visit the Canada Revenue Agency’s Automobile Allowance Rates webpage.
On January 24, 2023, the Canada Revenue Agency also released information on updated meal and vehicle expense rates used to calculate travel expenses (including for eligible medical, moving expense, and northern residents’ deduction claims) for 2022. For taxpayers that are eligible to claim travel expenses and choose to apply the simplified method for calculating their deductible expenses, the following rates have been approved for the 2022 taxation year:
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Meals Expenses – Flat rate of $23 per mean, to a maximum of $69 per day (sales tax included) per person (unchanged from 2021)
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Vehicle Expenses – 55 cents per kilometer (Alberta, up from 51 cents in 2021)
For more information on the applicable meal and travel rates, and how to claim these expenses, visit the CRA’s Meal and Vehicle Rates webpage.
For questions about vehicle mileage and travel expenses contact Gregory Harriman & Associates LLP by email at This email address is being protected from spambots. You need JavaScript enabled to view it. or by phone at 1-403-934-3176.
Disclaimer
The information in this publication is current as of January 30, 2023
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Gregory, Harriman & Associates LLP to discuss these matters in the context of your particular circumstances. Gregory, Harriman & Associates LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.