Employee Vehicle

As per the Canada Revenue Agency (CRA) you can deduct your motor vehicle expenses if you meet all of the following conditions:

1. You were normally required to work away from your employer's place of business or in different places.
2. Under your contract of employment, you had to pay your own motor vehicle expenses. You are not considered to have paid your own motor vehicle expenses if your employer reimburses you or you refuse a reimbursement or reasonable allowance from your employer.
3. You did not receive a non-taxable allowance for motor vehicle expenses. Generally, an allowance is non-taxable when it is based solely on a reasonable per-kilometer rate.
4. You keep with your records a copy of Form T2200, Declaration of Conditions of Employment, which has been completed and signed by your employer.

The types of expenses you can deduct include:

• fuel (gasoline, propane, oil)
• maintenance and repairs
• insurance
• license and registration fees
• capital cost allowance
• the eligible interest you paid on a loan used to buy the motor vehicle
• eligible leasing costs

If you have received a non-taxable motor vehicle allowance and can show that the employment-related motor vehicle expenses are in excess of the allowance and voluntarily include the amount of the allowance in income, you can deduct your motor vehicle expenses if conditions 1, 2, and 4 are met.

If you use a motor vehicle for both employment and personal use, you can deduct only the percentage of expenses related to earning income. To support the amount you can deduct, keep a record of both the total kilometers you drove and the kilometers you drove to earn employment income. The CRA considers driving back and forth between home and work as personal use.

If you use more than one motor vehicle to earn employment income, calculate each vehicle's expenses separately.

 

Related Information:

Allowable Motor Vehicle Expenses as per CRA

 

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