Incorporate: Buying vs financing/leasing a car

[jawadahmed6065]

Hi,

I am incorporating and has my own company in Ontario. Can some one please advise me that which option is better for me from the following:
1) buy the brand new car on cash and claim the entire amount as company's expense while filing the tax?
2) buy the brand new car on finance or lease for next 4 years and claim monthly installment as company's expense while filing the tax?
3) buy the second hand good condition car on cash and claim the entire amount as company's expense while filing the tax?

Your guidance and support is much appreciated.

Regards

 

[Jonboy]

Whether you buy or lease a car through your company and assess yourself a taxable benefit for personal use, or buy or lease a car personally and charge the company for business use should be a wash. The tax rates are set such that there is no particular advantage either way.

However, you can not just decide to claim the entire amount as a business expense. It will depend on how much you drive on business and how much you use the vehicle for personal use. You are supposed to keep a mileage log in case the CRA ask to see it.