New Tax Breaks for Equipment Purchases
If your business is considering purchasing office equipment, vehicles, computers, practically any capital asset – we have fantastic news! The Department of Finance announced that as of November 20, 2018 tax depreciation rates have TRIPLED from the previous rates.
If you think that’s a nice perk, check this out! As of November 21, 2018, any manufacturing or processing equipment (new or used), purchased and used in Canada can be expensed at the full purchase price for tax purposes in the year the equipment is placed into use. This juicy new rule lasts until 2024 when the write-off drops to 75% and is phased back to the current rates after 2027.
To put this into perspective, if you are paying tax at the higher corporate tax rate of 26%, and your company is making good profits, you can get 26% tax relief in the year of purchase for manufacturing equipment – so it’s like that type of equipment is now “on sale”.
For companies thinking of making capital asset purchases in the near future, we’re certain this awesome news tidbit will help you make that decision sooner than later!