--- title: How to Deduct the Business Use of a Personal Vehicle for Your Corporation description: Learn how to deduct business vehicle expenses for your corporation efficiently, maximizing tax benefits. Track usage, calculate expenses, and maintain proper documentation for compliance. image: https://toroaccounting.ca/hubfs/image-png-3.png --- [Skip to content](https://toroaccounting.ca/blog/how-to-deduct-the-business-use-of-a-personal-vehicle-for-your-corporation#main-content) - [English](https://toroaccounting.ca/blog/how-to-deduct-the-business-use-of-a-personal-vehicle-for-your-corporation) - [Spanish](https://toroaccounting.ca/es/blog/how-to-deduct-the-business-use-of-a-personal-vehicle-for-your-corporation) English Show submenu for translations [![Toro Financial Inc. dba Toro Accounting](https://toroaccounting.ca/hs-fs/hubfs/Logo-Square%20(500%20x%20200%20px)-1.png?width=450&height=150&name=Logo-Square%20(500%20x%20200%20px)-1.png)](https://toroaccounting.ca/en?hsLang=en) - [Home](https://toroaccounting.ca/en/) - [Taxes](https://toroaccounting.ca/en/tax-filing-services) Show submenu for Taxes - [1st Tax Filing](https://toroaccounting.ca/en/steps-for-filing-t1) - [Bookkeeping](https://toroaccounting.ca/en/bookkeeping) - [Business Plans](https://toroaccounting.ca/en/create-my-business-plan) - [Blog](https://toroaccounting.ca/blog) Open main navigation Close main navigation - [Home](https://toroaccounting.ca/en/) - [Taxes](https://toroaccounting.ca/en/tax-filing-services) Show submenu for Taxes - [1st Tax Filing](https://toroaccounting.ca/en/steps-for-filing-t1) - [Bookkeeping](https://toroaccounting.ca/en/bookkeeping) - [Business Plans](https://toroaccounting.ca/en/create-my-business-plan) - [Blog](https://toroaccounting.ca/blog) - - [English](https://toroaccounting.ca/blog/how-to-deduct-the-business-use-of-a-personal-vehicle-for-your-corporation) - [Spanish](https://toroaccounting.ca/es/blog/how-to-deduct-the-business-use-of-a-personal-vehicle-for-your-corporation) English Show submenu for translations - [Book a Free Consultation](https://toroaccounting.ca/en/book-consultation) [Book a Free Consultation](https://toroaccounting.ca/en/book-consultation?hsLang=en) Jul 7, 2024, 9:54:23 AM # How to Deduct the Business Use of a Personal Vehicle for Your Corporation [Camilo Toro](https://toroaccounting.ca/blog/author/camilo-toro) Share: [facebook-f icon](http://www.facebook.com/share.php?u=https://toroaccounting.ca/blog/how-to-deduct-the-business-use-of-a-personal-vehicle-for-your-corporation) [linkedin-in icon](http://www.linkedin.com/shareArticle?mini=true&url=https://toroaccounting.ca/blog/how-to-deduct-the-business-use-of-a-personal-vehicle-for-your-corporation) [Twitter icon](https://twitter.com/intent/tweet?url=https://toroaccounting.ca/blog/how-to-deduct-the-business-use-of-a-personal-vehicle-for-your-corporation) [pinterest-p icon](http://pinterest.com/pin/create/link/?url=https://toroaccounting.ca/blog/how-to-deduct-the-business-use-of-a-personal-vehicle-for-your-corporation) [envelope icon](mailto:?body=https://toroaccounting.ca/blog/how-to-deduct-the-business-use-of-a-personal-vehicle-for-your-corporation) ![](https://toroaccounting.ca/hs-fs/hubfs/image-png-3.png?width=817&height=534&name=image-png-3.png) When you use a personal vehicle for business purposes, your corporation can deduct the business-related expenses. This guide will walk you through the steps to accurately claim these deductions, ensuring compliance with tax regulations and maximizing your corporation’s tax efficiency. #### 1. Determine the Business Use Percentage To start, you need to track the total kilometers driven for both business and personal use over a specific period (typically one year). Keep a detailed logbook noting the date, destination, purpose, and distance traveled for each business trip. **Example:** - Total kilometers driven in a year: 20,000 km - Kilometers driven for business purposes: 8,000 km - Business use percentage: (8,000 km / 20,000 km) \* 100 = 40% #### 2. Calculate Eligible Vehicle Expenses You can claim the business use percentage of the total vehicle expenses. Eligible expenses include: - Fuel and oil - Maintenance and repairs - Insurance - License and registration fees - Depreciation (Capital Cost Allowance - CCA) - Loan interest (if applicable) - Leasing costs (if applicable) - Parking fees (if applicable) #### 3. Reimbursement by the Corporation The corporation can reimburse you for the business use of the vehicle. This reimbursement can be based on either the actual expenses or a reasonable per-kilometer rate set by the Canada Revenue Agency (CRA). **Using Actual Expenses:** Calculate the total annual expenses for the vehicle and apply the business use percentage. **Example:** - Total annual vehicle expenses: $6,000 - Business use percentage: 40% - Reimbursable amount: $6,000 \* 40% = $2,400 The corporation reimburses you $2,400, which is deducted as a vehicle expense on the corporation’s financial statements. **Using CRA’s Per-Kilometer Rate:** The CRA sets a per-kilometer rate for business use of personal vehicles. For example, in 2023, the rates are: - 68¢ per kilometer for the first 5,000 kilometers  - 62¢ per kilometer for each additional kilometer **Example:** - Business kilometers driven: 8,000 km - Reimbursement: (5,000 km \* $0.68) + (3,000 km \* $0.62) = $3,740 The corporation reimburses you $3,740, which is deducted as a vehicle expense on the corporation’s financial statements. #### 4. Record-Keeping Maintain detailed records, including: - A logbook of business trips - Receipts and invoices for all vehicle expenses - Reimbursement requests and payments #### 5. Filing Requirements Ensure that the corporation correctly reports the vehicle expenses and reimbursements in its financial records and tax returns. If using the per-kilometer rate, the reimbursement is a straightforward deduction. If using actual expenses, detailed documentation is essential to justify the business use percentage. ### Example of Implementation: **Step 1: Logbook** Maintain a logbook and determine that 40% of the kilometers driven are for business. **Step 2: Calculate Expenses** Total vehicle expenses: $6,000 **Step 3: Reimbursement** The corporation reimburses you $2,400 (40% of $6,000). **Step 4: Record-Keeping** Keep all receipts, logbooks, and reimbursement records. **Step 5: Reporting** The corporation deducts the $2,400 reimbursement as a vehicle expense on its financial statements and tax return. ### Conclusion By following these steps, you can accurately claim deductions for the business use of a personal vehicle, ensuring compliance with CRA requirements and maximizing your corporation’s tax efficiency. Proper documentation and regular review of your records are essential to maintaining accurate and compliant expense claims. [Tax](https://toroaccounting.ca/blog/tag/tax), [Corporation](https://toroaccounting.ca/blog/tag/corporation), [Vehicle Expenses](https://toroaccounting.ca/blog/tag/vehicle-expenses) ## Related posts [![](https://toroaccounting.ca/hs-fs/hubfs/Untitled%20design%20(13).png?height=200&name=Untitled%20design%20(13).png)](https://toroaccounting.ca/blog/%EF%B8%8F-attendant-care-expenses-in-canada?hsLang=en) [CRA](https://toroaccounting.ca/blog/tag/cra), [Tax Credits](https://toroaccounting.ca/blog/tag/tax-credits) ## [🧑‍⚕️ Attendant Care Expenses in Canada](https://toroaccounting.ca/blog/%EF%B8%8F-attendant-care-expenses-in-canada?hsLang=en) [Camilo Toro](https://toroaccounting.ca/blog/author/camilo-toro) Feb 22, 2026, 11:31:51 PM When Do They Qualify as a Medical Expense? If you or a family member require assistance with daily... 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[Read more](https://toroaccounting.ca/blog/self-employed-and-run-a-business-out-of-your-home-what-you-can-claim?hsLang=en) [![](https://toroaccounting.ca/hs-fs/hubfs/Home%20Office.png?height=200&name=Home%20Office.png)](https://toroaccounting.ca/blog/home-office-expenses-employees?hsLang=en) [Tax](https://toroaccounting.ca/blog/tag/tax), [CRA](https://toroaccounting.ca/blog/tag/cra) ## [Home Office Expenses for Employees: How to Calculate and Claim Them with the CRA](https://toroaccounting.ca/blog/home-office-expenses-employees?hsLang=en) [Camilo Toro](https://toroaccounting.ca/blog/author/camilo-toro) Feb 24, 2025, 11:06:50 PM With more Canadians working remotely, knowing how to properly calculate and claim your home office... 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