34 What are some common CCA classes and what is their tax treatment?
Sheila Lai
The following chart shows some of the common CCA classes and their tax rates. Note that most of these assets would be eligible for the new Accelerated Investment Incentive:
|
Class |
Depreciate property |
Rate |
|
1 |
Most buildings acquired after 1987. Note the rules around buildings are complex and the CCA class (and rates) is dependent on the type of building, how it is used and when it is purchased. |
4% (varies) |
|
8 |
Furniture, fixtures and miscellaneous capital property. This is a bit of a dumping ground for assets that can’t find another CCA class. |
20% |
|
10 |
Most automobiles and other automotive equipment (if not in class 10.1 or 16) |
30% |
|
10.1 |
Passenger vehicles that cost more than the prescribed amount (currently $30,000). Some unique rules related to class 10.1:
|
30% |
|
12 |
Property such as tools, medical or dental instruments, and kitchen utensils that cost less than $500. Basically small, inexpensive items that, for simplicity sake, are expensed (through CCA) really quickly. |
100% |
|
16 |
Taxis and vehicles you use in a daily car rental business. There is a higher depreciation rate here than for class 10 or 10.1 due to the higher usage by taxi companies and car rental businesses. |
40% |
|
43.1 and 43.2 |
Clean energy equipment has a CCA rate of 30% (43.1) or 50% (43.2) depending on when the equipment was acquired. Under the temporary full expensing rules, new equipment in this class purchased after November 20, 2018 will be expensed 100% in the year of acquisition. This temporary rule will be phased out starting in 2024. Note, these assets are not eligible for the Accelerated Investment Incentive. |
30% 50% 100% |
|
50 |
Computer hardware and systems software for that equipment, including ancillary data processing equipment that is acquired after March 18, 2007. |
55% |
|
53 |
Machinery and equipment that is acquired after 2015 and before 2026 to be used in Canada primarily in the manufacturing or processing of goods for sale or lease. Under the temporary full expensing rules, new equipment in this class purchased after November 20, 2018 will be expensed 100% in the year of acquisition. This temporary rule will be phased out starting in 2024. Note, these assets are not eligible for the Accelerated Investment Incentive. |
50% |
You can find a great CCA list (by item and by class) in the FITAC by first going to “Tax rates and tools” and then “Capital cost allowance”
Interactive content (Author: Angel Mo, January 2020)
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January 2020
