Q. I am obtaining a new highway tractor. Should I buy or lease?
A. If you were to buy the new rig then usually a larger down-payment is required; you can claim the GST/HST immediately; interest on the truck loan is expensed and the truck's capital cost is claimed over time. Buying the rig results in a fluctuating expense each year.
On the other hand, if you were to lease the new rig, normally a lower down-payment is required; the down-payment is expensed over the term of the lease; and the GST/HST is claimed on each payment. Leasing the rig results in an equal expense each year.
Q. I am a single owner-operator - should I incorporate?
A. The answer is simply no. The corporation would pay tax on
the net earnings. The funds you would take out would be
taxed as well. One might end up paying more tax.
Copyright 2016 The Transport Advisor Limited
