Motor vehicle – Leasing costs

You can deduct costs you incur to lease a motor vehicle you use to earn income. Include these amounts on:

When you use a passenger vehicle to earn farming or fishing income, there is a limit on the amount of the leasing costs you can deduct. To calculate your eligible leasing costs, fill in "Chart C – Eligible leasing cost for passenger vehicles" of your form.

If the lease agreement for your passenger vehicle includes such items as insurance, maintenance, and taxes, include them as part of the lease charges on amount 20 of Chart C.


Generally, leases include taxes (GST/HST, or PST) but not items such as insurance and maintenance. You have to pay these amounts separately. Include the taxes on amount 20 of Chart C, and list the items like insurance and maintenance on the appropriate lines of "Chart A - Motor vehicle expenses."

For your 2022 fiscal period, use the GST rate of 5% or the applicable HST rate of your specific province to fill in Chart C.

The following example shows how to calculate the eligible leasing costs. Use Chart C of your form to help you understand the following example. In this chart, we use prescribed amounts. Prescribed means it is written in the law.


On July 1, 2022, Meadow started leasing a car that is a passenger vehicle. She used the car to earn business income. Her business has a December 31 fiscal year‑end. The PST rate for her province is 8% and GST is 5%. Meadow entered the following for 2022:

Monthly lease payment



Lease payments for 2022



Manufacturer's suggested list price



Number of days in 2022 she leased the car



Prescribed CCA capital cost limit



Prescribed CCA capital cost limit × Prescribed limit rate: 34,000 × (100 ÷ 85)



Prescribed deductible leasing costs limit



GST and PST on $34,000


GST and PST on $40,000


GST and PST on $900


Total lease charges incurred in 2022 fiscal period for the vehicle



Total lease payments deducted in fiscal periods before 2022 for the vehicle


Total number of days the vehicle was leased in 2022 and previous fiscal periods



Manufacturer's list price



The highest amount: line 4 or $45,200 ($40,000 + $5,200) × 85%



($1,017 × 184) ÷ 30



($38,420 × $3,000) ÷ $38,420


Meadow's eligible leasing cost is either amount 6 or 7, whichever amount is less. In this case, her allowable claim is $3,000.

Repayments and imputed interest

When you lease a passenger vehicle, you may have a repayment owing to you, or you may have imputed interest. If so, you will not be able to use the chart.

Imputed interest is interest that would be owing to you if interest were paid on the money you deposited to lease a passenger vehicle. Calculate imputed interest for leasing costs on a passenger vehicle only if all the following apply:

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