
February 26th, 2025
Navigating Capital Gains: Compliance Updates and Tax Planning Strategies
Facing uncertainty with the proposed capital gains increase? Discover proactive tax strategies to navigate changes before they take effect in 2026.
Posted on June 17th, 2024 in Domestic Tax
Reasonable motor vehicle allowances received by employees in the course of employment duties are non-taxable. An allowance is not reasonable (and therefore taxable) if any of the following are met:
A November 23, 2023, French Technical Interpretation considered the tax implications of an employer increasing the motor vehicle allowance paid to its employees by an additional per kilometre amount for each person accompanying the driver. CRA opined that the two parts of the allowance (base and additional amount per passenger) constituted a single allowance since both were intended for the same use of the vehicle. They then opined that as the allowance provided was not solely based on the number of kilometres travelled to perform the duties of employment, the entire allowance was taxable.
Ensure that allowances paid to employees meet the strict conditions for being tax-free to avoid a surprise tax bill for the recipient.
Article originally published in: Tax Tips & Traps 2024 Second Quarter – Issue 146.
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