Tax-Free Motor Vehicle Allowances

Income tax act s. 6(1)(b)(vii.1), Income Tax Regulations s. 7306

The Income Tax Act sets out the following amounts that may be paid tax-free to employees or officers as reimbursement for motor vehicle expenses incurred while travelling for business purposes, using their personal vehicle:

Rates per km20122008-20112007/200620052004/2003
All provinces
-first 5,000 km$0.53$0.52$0.50$0.45$0.42
-over 5,000 km$0.47$0.46$0.44$0.39$0.36
Yukon/Northwest Territories, and Nunavut
-first 5,000 km$0.57$0.56$0.54$0.49$0.46
-over 5,000 km$0.51$0.50$0.48$0.43$0.40

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