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Tax Policy Comparison:
CORPORATE TAXATION POLICY #1
| Tax Policy Comparison: CORPORATE TAXATION POLICY #1 |
Conservative Party | Liberal Party |
|---|---|---|
| POLICY | Restrict the Deductibility of the Use of Corporate Aircraft | N/A |
| DATE | 29-Mar-25 | N/A |
| URL | View Policy Video | No Policy to View |
| DESCRIPTION & COMMENT | See the description of the announcement in Personal Taxation Policy #6. Currently under the Income Tax Act, there is no statutory maximum on how much a corporation can deduct for the business use of an airplane. However, the deductions must meet certain criteria to be allowable. Specifically, the expenses must be reasonable in the circumstances and directly related to the business use of the aircraft. This includes operating costs such as fuel, maintenance, insurance, and pilot salaries, as well as capital cost allowance (CCA) for the aircraft. Operating costs related to the personal use of an aircraft by a shareholder or employee are not deductible by the corporation because they are not considered to be laid out to earn income. Given the above, there are often blurred lines as to what is personal vs business usage of an aircraft. This announcement appears to want to draw an objective line in the sand so that the overall deductible costs of corporately owned aircraft will be restricted to the cost of an equivalent commercial flight (with the exception of charters that are necessary to bring workers to a job site). While the devil will be in the details, this could significantly impact the use of corporately owned aircraft. |
N/A |
Tax Policy Comparison:
CORPORATE TAXATION POLICY #1
Tax Policy Comparison: Corporate Taxation Policy #1
Conservative Party
Date: March 29, 2025
Summary:
Restrict the Deductibility of the Use of Corporate Aircraft
Description & Comment:
See the description of the announcement in Personal Taxation Policy #6.
Currently under the Income Tax Act, there is no statutory maximum on how much a corporation can deduct for the business use of an airplane. However, the deductions must meet certain criteria to be allowable. Specifically, the expenses must be reasonable in the circumstances and directly related to the business use of the aircraft. This includes operating costs such as fuel, maintenance, insurance, and pilot salaries, as well as capital cost allowance (CCA) for the aircraft. Operating costs related to the personal use of an aircraft by a shareholder or employee are not deductible by the corporation because they are not considered to be laid out to earn income.
Given the above, there are often blurred lines as to what is personal vs business usage of an aircraft. This announcement appears to want to draw an objective line in the sand so that the overall deductible costs of corporately owned aircraft will be restricted to the cost of an equivalent commercial flight (with the exception of charters that are necessary to bring workers to a job site).
While the devil will be in the details, this could significantly impact the use of corporately owned aircraft.
View Policy Video
Summary:
Restrict the Deductibility of the Use of Corporate Aircraft
Description & Comment:
See the description of the announcement in Personal Taxation Policy #6.
Currently under the Income Tax Act, there is no statutory maximum on how much a corporation can deduct for the business use of an airplane. However, the deductions must meet certain criteria to be allowable. Specifically, the expenses must be reasonable in the circumstances and directly related to the business use of the aircraft. This includes operating costs such as fuel, maintenance, insurance, and pilot salaries, as well as capital cost allowance (CCA) for the aircraft. Operating costs related to the personal use of an aircraft by a shareholder or employee are not deductible by the corporation because they are not considered to be laid out to earn income.
Given the above, there are often blurred lines as to what is personal vs business usage of an aircraft. This announcement appears to want to draw an objective line in the sand so that the overall deductible costs of corporately owned aircraft will be restricted to the cost of an equivalent commercial flight (with the exception of charters that are necessary to bring workers to a job site).
While the devil will be in the details, this could significantly impact the use of corporately owned aircraft.
View Policy Video
Liberal Party