Are leasing and financing the same thing when it comes to declaring payments made for a vehicle being used for business throughout the year or are they 2 different thing?

From Tax Perspective the deduction of percentage of your gas, oil, insurance, parking fees, registration fees, lease, repairs, tires, loan interest, etc. are exactly the same for both leased and purchased vehicles.

 

For leased vehicles, the limit on the monthly lease payment that you can deduct is $800 per month plus HST (times your business use percentage) Essentially, the higher the price of the car, the more preferable leasing usually becomes.

 

For buying vehicles, what you spend on the cost of your car is deducted at a rate decided upon by the Canada Revenue Agency. This deduction is called depreciation. If you purchased the vehicle, you can also deduct the interest on the vehicle’s loan based on the percentage of time that it’s used for your business.

 

For more information, please click:  Should I Buy or Lease My New Business Vehicle?

 

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