Common capital cost allowance (CCA) classes and rates
The Capital cost allowance (CCA) is a tax deduction that Canadian tax laws allow a business to claim for the loss in value of capital assets due to wear and tear or obsolescence.
Depreciable assets are usually grouped into classes. The class system is used to prescribe a declining balance rate of depreciation. The total balance of the class (undepreciated capital cost (UCC) balance) is depreciated at the same percentage rate prescribed for that class.
Here are the commonly used classes and their CCA rates. (a CCA calculation example)
|Class||Rate||Description of Depreciable Property|
|1||4%||Bridges, dams, most buildings acquired after 1987.|
|3||5%||Buildings other than those in class 6 acquired, or obligated to acquire, before 1988.|
|6||10%||Buildings of wood or stucco of frame construction acquired prior to 1978 or for fishing or farming or without footings.|
|8||20%||Equipment and machinery that does not fit in any other class, furniture, electrical generating equipment, photocopiers, and fax machines.|
|10||30%||Movable equipment and certain computer equipment, operating software, a mining building, and automotive equipment.|
|10.1||30%||Passenger vehicles exceeding $30,000 (or prescribe amount)|
|12||100%||Small tools with a cost of less than $500 ($200 if purchased before May 2, 2006), utensils, uniforms, linen, and certain software.|
|13||S.L.*||Improvements to leased property.|
|14||S.L.*||Franchises, concessions or licenses, and patents acquired prior to April 24, 1993.|
Pollution-control equipment purchased after April 26, 1965 but before 1999.
Certain manufacturing equipment purchased between January 1, 1988 and February 25, 1992.
|43||30%||Certain manufacturing equipment purchased after February 25, 1992.|
|44||25%||Patents and rights to use patents after April 26, 1993.|
|45||45%||Computer equipment and systems software acquired after March 22, 2004 and before March 19, 2007|
|46||46%||Database and network equipment acquired after March 22, 2004.|
|50||55%||Computer equipment and systems software acquired after March 18, 2007.|
|52||100%**||Computer equipment and systems software acquired after January 27, 2009 and before February 2011. Only applies to new equipment used in Canada.|
|*These classes are subject to straight-line amortization over the estimated life of the assets in the class.|
|** No half year rule.|