Full Expensing for Manufacturers and Processors
no fixed amount
Tax Credit
Description:
The Full Expensing for Manufacturers and Processors allows businesses to immediately write off the full cost of machinery and equipment used for the manufacturing or processing of goods, subject to the Capital Cost Allowance (CCA) rules.
Comments on Funding:
Machinery and equipment currently qualify for a temporary accelerated CCA rate of 50% calculated on a declining-balance basis under class 53.
These assets would otherwise be included in class 43 and qualify for a CCA rate of 30%.
If applicants acquire property after November 20, 2018, and it becomes available for use before 2028, it will be eligible for an enhanced first-year allowance. The enhanced allowance will initially provide a 100% deduction, with a phase-out for property that becomes available for use after 2023.
Rolling deadline
Eligibility:
Applicants must:
1. be manufacturers and processors;
2. have acquired (after 2015) eligible machinery and equipment under class 53 or will acquire it before 2026
3. use the equipment in Canada primarily in the manufacturing or processing of goods for sale or lease;
4. have acquired property after November 20, 2018, and it becomes available for use before 2028.
Application Steps:
Applicants must contact CRA through the website
Documentation Needed:
No specific documentation has been identified.
Other Things to Note:
The enhanced allowance will initially provide a 100% deduction, with a phase-out for property that becomes available for use after 2023.
About the author
Maurice
