As a Canadian investor, you may have heard of Accelerated Investment Incentive Property (AIIP), but do you know everything you need to know about it? In this post, we’ll provide a comprehensive overview of AIIP and its benefits for Canadian investors.

First, let’s define what AIIP is. It’s a new tax incentive that was introduced in the 2018 federal budget and is designed to encourage investment in Canada. It allows businesses to claim a higher rate of depreciation on capital assets acquired after November 20, 2018, and before 2024.

The AIIP provides two main benefits to investors: accelerated tax write-offs and increased cash flow. By allowing businesses to write off capital investments at a faster rate than under the previous rules, the AIIP provides a tax incentive that encourages investment in Canadian businesses. This, in turn, can help boost the Canadian economy.

To qualify for the AIIP, you must meet certain criteria. The property must be acquired after November 20, 2018, and before 2024. Additionally, the property must meet the following criteria:

  • The property must be acquired for the purpose of earning income from a business or property.
  • The property must be classified as a capital asset for tax purposes.
  • The property must be eligible for either the declining balance method or the straight-line method of depreciation.
  • The property must not be used primarily for personal use.

It’s important to note that the AIIP only applies to depreciable property, which includes machinery, equipment, furniture, and fixtures, among other things. It does not apply to land, buildings, or intangible property.

The AIIP offers two options for claiming the accelerated depreciation:

  • The first option is the general rule, which allows businesses to claim an additional 50% of the capital cost allowance (CCA) in the year the property is acquired.
  • The second option is the accelerated investment incentive, which allows businesses to claim an additional 100% of the CCA in the year the property is acquired.

The accelerated investment incentive is only available to businesses that meet certain criteria. To qualify, the business must have an income tax filing history, and the total amount of eligible capital costs must exceed $3 million.

In conclusion, the AIIP is a new tax incentive that provides Canadian businesses with accelerated tax write-offs and increased cash flow for capital assets acquired after November 20, 2018. By encouraging investment in Canadian businesses, the AIIP can help boost the Canadian economy. To take advantage of this incentive, it’s important to ensure that you meet the eligibility criteria and to consult with a tax professional to ensure that you’re claiming the correct amount of CCA.