Principal Issues: Whether a particular XXXXXXXXXX would be entitled to the 100% CCA rate for a general-purpose computer and printer acquired after January 27, 2009 and before February 2011.
Position: None taken. General comments only.
Reasons: The Income Tax Regulations were amended on May 13, 2009 to add new Class 52 to Schedule II (CCA rate 100%) [See May 13, 2009 - SOR/2009 -126 and June 10, 2009 - SOR/2009-155]. Among other things, to be eligible computer equipment, the computer and printer must have been acquired by the XXXXXXXXXX either for the purpose of earning business income or to earn income from property.
2009-032586
From: Fitzgerald, Tim
Sent: June 23, 2009 03:04 PM
To: XXXXXXXXXX
Subject: Computer Equipment
Hello XXXXXXXXXX .
This is in response to your email of May 11, 2009 and further to my email of June 10, 2009. In your email, you mentioned that the XXXXXXXXXX is considering buying a new computer and printer and asked whether the tax break announced in the Federal Budget on January 27, 2009 is applicable to the XXXXXXXXXX .
The 2009 Federal Budget proposed a temporary 100% capital cost allowance ("CCA") rate for eligible computers acquired after January 27, 2009 and before February 2011. This proposed budget measure has now become law. The Income Tax Regulations were amended to add new Class 52.
In general terms, the 100% CCA rate for Class 52 property applies to general-purpose computer equipment, including related system software and ancillary data processing equipment, that
- is acquired after January 27, 2009 and before February 2011;
- is situated in Canada; and
- is acquired for the purpose of either earning income in a business carried on in Canada or earning income from property situated in Canada.
This 100% CCA rate will not be subject to the half-year rule, which generally allows only half the CCA write-off otherwise available in the year the asset is first available for use. In addition, the property must be new in the sense that it was not previously used or acquired to be used for any other purpose.
An example of ancillary data processing equipment mentioned above is a printer that is connected to a general-purpose computer such as a desktop or laptop.
I trust this information is helpful to you. However, I can be reached at (613) 957-8967 if you would like to discuss this matter further.
Best Regards,
Tim Fitzgerald, CGA
Income Tax Rulings Directorate\Legislative Policy & Regulatory Affairs Branch
Canada Revenue Agency
320 Queen St. Place de Ville Tower A,
Ottawa ON K1A OL5
Tel: (613) 957-8967