Equipment is depreciated for income
tax purposes using the capital cost allowance ("CCA") system. The CCA ("depreciation")
claimed on each type of asset is prescribed by regulations in the Income
Tax Act.
The following is a list of the capital cost allowance rates for various common
types of assets a business may purchase:
Capital Cost Allowance Rates
|
Computer hardware
|
30% Prior to Mar 23 2004
45% Mar 24, 2004 - Mar 18, 2007
55% Mar 19, 2007 - Jan 26, 2009
100% After Jan 27, 2009
|
Computer software
|
100%
|
Office furniture
|
20% declining balance
|
Telephone system
|
20% declining balance
|
Automobile
|
30% declining balance
|
Office equipment
|
20% declining balance
|
In the year of acquisition only
one-half of the maximum allowable CCA is allowed as a deduction. Where
the fiscal period of a business is less than twelve months, CCA is
restricted to the maximum claim, times the proportion that the number
of days in the fiscal period is of 365.
