Class 10.1 vehicle - income tax and ITC

Tax Topics
1

When entering a class 10.1 vehicle into the tax return for a sole prioretor the software calulated an additon amount of $33,900. [Actual cost of vehicle is $35,000 + $4,550 (tax) = $39,550] (Buiness usage is 35%)

The addition amount is $33,900 [$30,000 + $3,900 (tax) = $33,900].

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/sole-proprietorships-partnerships/report-business-income-expenses/claiming-capital-cost-allowance/classes-depreciable-property.html#Class101

We consider the capital cost of a Class 10.1 vehicle to be $30,000 plus the related GST/HST, or PST. The $30,000 amount is the capital cost limit for a passenger vehicle.

My issue is it seems like double-dipping/unfair when calculating the ITC because the capital cost includes HST ($33,900) but at the same time the ITC is going to be calculated on the CCA amount.

https://www.taxtips.ca/gst/itcvehicles.htm
The ITC will be calculated as such CCA x 13/113

Thoughts?

2

The asset addition, CCA, and GST/HST recovery being a function of the CCA claimed (adjusted for personal use) seems to work the way the legislation intended it to work.

Not sure what you are asking.

3

@snoplowguy
You’re correct, the amount of $33,900 is correct.
My question is about the ITC calculation. Specifically, CCA x 13/113 (for Ontario).
I edited the question.

4

Math seems to work out right.

5

Thank you for your replies