Capital Cost Allowance


  • A method of amortizing and expensing depreciable items as defined by the Canadian Income Tax Act (ITA). It is an annual amount, sometimes stated as a percentage, which may be deducted from the value of certain capital assets and treated as an expense when calculating a company's or an individual's income for a taxation year.

Relevant Locations


Alternate Spellings
depreciation, depreciable property

Related Terms and Acronyms

  • Capital Assets Definition,
    • Items that you own for investment or personal purposes, such as stocks, bonds or stamp collections. When you sell a capital asset, depending on the price you earn a capital gain or a capital loss. Gains are taxed at a special rate, and losses can be used in many cases to reduce the amount that is taxed. See also "Capital Gain" or "Capital Loss."
  • Capital Investments Definition,
    • Money used to purchase permanent fixed assets for a business, such as machinery, land or buildings as opposed to day-to-day operating expenses.
  • Depreciation Definition,
    • The gradual loss of value of a building or other property because of age or natural wear.
  • Expense Definition,
    • Costs incurred through a business's operations.
  • Income Tax Definition,
    • The main source of revenue for the federal government and many Provinces. The tax is based on your earned and unearned income. The amount or percentage taxed is based on the amount of income, using the governments graduated tax scale.
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