According to the CRA, for a lease to be valid for tax purposes, then the term of the lease must be less than 90% of the economic life of the asset.

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The CRA (Canada Revenue Agency) does not specify that for a lease to be valid for tax purposes, the term of the lease must be less than 90% of the economic life of the asset. This concept is more closely related to accounting standards for distinguishing between a capital lease and an operating lease, rather than tax validity criteria set by the CRA.

According to the CRA, for a Lease to Be Valid