Claiming Capital Cost Allowance (CCA) on Trucks in Canada

When you purchase a truck for your Canadian business, you’re not just investing in mobility—you’re also opening the door to significant tax savings through the Capital Cost Allowance (CCA) program.

CCA lets you depreciate the value of your truck over time, reducing your taxable income and putting more cash back into your business. But to maximize the benefit, you need to understand which class your vehicle falls under, how much you can deduct, and when to apply the half-year rule.

In this article, we’ll walk you through how to claim CCA on your truck, including the applicable rates, calculation method, and common mistakes to avoid.

What is Capital Cost Allowance (CCA) and Why It Matters

Capital Cost Allowance (CCA) is a tax deduction in Canada that allows businesses to write off the declining value of capital assets such as trucks, trailers, equipment, and buildings. Over time, as these assets lose value due to use or obsolescence, CCA allows you to deduct a portion of that value annually.

Benefits of CCA:

• Reduces your taxable income
• Improves cash flow
• Allows for strategic reinvestment in your business

📌 Related: Truck Financing vs Leasing: Which Has Better Tax Benefits?

CCA Classes and Rates for Trucks

Canada’s tax system groups assets into different CCA classes, each with a designated depreciation rate. For trucks, here’s what you need to know:

Class 10 or 10.1 (Most Commercial Trucks)

• Rate: 30%
• Use: Light- and medium-duty trucks for business use
• Class 10.1 rule: Applies to vehicles over $30,000; specific rules limit recapture on disposal

Class 54 or 55 (Zero-Emission Vehicles)

• Rate: 100% in Year 1 (under Accelerated Investment Incentive)
• Use: Electric or hydrogen-powered trucks
• Limit: $59,000 in cost per vehicle (as of 2025; indexed annually)

📝 Make sure your truck qualifies for the correct class—misclassification can lead to disallowed deductions or audits.

How to Calculate Your CCA Deduction

1. Determine the Depreciable Amount

This is the total cost of the truck, including:

• Purchase price
• Sales taxes
• Delivery, setup, or inspection fees

2. Apply the CCA Rate

Formula:
CCA = Cost × CCA Rate × Half-Year Rule (if applicable)

Let’s say you purchase a truck for $50,000 that qualifies under Class 10 (30%).

3. Apply the Half-Year Rule (Year 1 only)

In the year you purchase the truck, you can only claim 50% of the normal CCA rate.

Year 1 Deduction:
= $50,000 × 30% × ½
= $7,500

Year 2 Deduction:
= ($50,000 – $7,500) × 30%
= $12,750

This continues until the asset is fully depreciated or sold.

CCA Table Example

Common Mistakes to Avoid

Avoid these errors to stay compliant and maximize deductions:

❌ Ignoring the Half-Year Rule

Claiming the full CCA rate in Year 1 will trigger a red flag with the CRA.

❌ Misclassifying the Truck

Ensure you’re using the correct CCA class (e.g., Class 10 vs Class 10.1 or Class 54).

❌ Poor Documentation

Keep invoices, registration, and tax receipts to support your claim in case of an audit.

Mehmi Financial Group: CCA Strategy That Works for You

At Mehmi Financial Group, we understand how to optimize your truck and equipment purchases for maximum tax efficiency. Whether you’re buying new or used, diesel or electric, we help Canadian owner-operators:

• Select the right CCA class
• Plan for tax-advantaged financing or leasing
• Stay compliant with CRA rules

✅ Talk to a financing expert
✅ Calculate your financing cost

FAQs: Claiming CCA on Trucks

What is the CCA rate for trucks in Canada?

Most commercial trucks fall under Class 10 or 10.1, which has a 30% rate. Zero-emission trucks may be eligible for 100% deduction in year 1 under Class 54 or 55.

Can I claim CCA if I lease my truck?

No. Since you don’t own the asset, you can only deduct lease payments, not CCA.

Does the half-year rule apply to trucks?

Yes. In the year of acquisition, you can only claim half of the standard CCA rate.

Is there a cap on electric truck CCA claims?

Yes. As of 2025, the maximum capital cost for 100% CCA on a ZEV is $59,000 (indexed annually).

Final Thoughts

Claiming Capital Cost Allowance is a powerful way to optimize your tax strategy and keep more cash in your business. By understanding your CCA class, applying the correct rate, and avoiding common mistakes, you can unlock long-term savings and position your business for growth.

Let Mehmi Financial Group be your partner in smart tax planning, truck financing, and business success.

📌 Related blogs:

• Truck Loan Approval in Ontario: Documents You’ll Need
• Business Loans on Trucks & Trailers

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