There are two capital cost allowance (CCA) classes for zero-emission vehicles acquired after March 18, 2019. Class 55 is the second of them: zero-emission vehicles (would be Class 16) — the working vehicles that, if they ran on fuel, would sit in Class 16. CCA still applies on a declining-balance basis, and on Form T2125, Statement of Business or Professional Activities, the class is one of the rows in Area A.
What goes in this class
A zero-emission vehicle acquired after March 18, 2019 that would normally be included in Class 16. Class 16 covers taxis, and vehicles used in a daily car rental business, among other property.
The class has its own rate, set out on the Canada Revenue Agency (CRA)'s page of classes.
What does not
A zero-emission vehicle that would normally be Class 10 or 10.1. That goes to Class 54.
The Class 54 cost cap. The limit on the capital cost of each zero-emission passenger vehicle is a Class 54 rule. Class 55 covers the Class 16 kind of vehicle instead.
Worth knowing
Class 55 has the same enhanced first-year CCA structure as Class 54, with its own factors for increasing the capital cost addition to the class before the rate is applied, and its own phase-out period.
Under proposed changes, the enhanced first-year CCA deduction is reinstated for zero-emission vehicles in Classes 54 and 55 acquired after 2024; qualifying property has to be acquired and become available for use on or after January 1, 2025 and before 2034. Because this is a proposal rather than settled law, the first-year treatment is worth confirming when you file.
You may also elect not to include a vehicle in Class 55. It is then no longer treated as a zero-emission vehicle and goes into its usual class. The election is filed with your Income Tax and Benefit Return for the tax year in which the vehicle is acquired, and there is no provision for late-filing or amended elections.
What to keep
Keep the bill of sale or purchase invoice, showing the seller, the date, the vehicle, and what it cost. Keep whatever shows how the vehicle is used — a taxi licence, or the rental records for a daily rental business — since the use is what makes it Class 16 property, and therefore Class 55 property.
Keep the paperwork for a vehicle you sell as well, since a disposition changes the class balance. Dossier tags the invoice and files it with the year's records, so it is there when you file. Don't send it in with your return — keep it in case the CRA asks to see it.
Official CRA sources
Source: Canada Revenue Agency (canada.ca). Not tax advice.