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Employee-owned Vehicle

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Business -> Employee-owned motor vehicles

Employee-owned motor vehicles:

If an employee-owned motor vehicle is used for travelling in the performance of the duties of employment, then:

(i) a reasonable allowance may be paid to the employee on a tax-free basis for the use of the vehicle, or

(ii) the employer can reimburse the employee for the business use of the vehicle, based on submitted receipts, or

(iii) the motor vehicle expenses may be deducted by the employee on their tax return if the employee:

	was normally required to carry on the duties of employment away from the employer's place of business, or in different places, and
	was required under the contract of employment to pay motor vehicle expenses incurred in the performance of the duties of employment, and
	did not receive any allowance or reimbursement from the employer for motor vehicle expenses.

Form T2200, Declaration of Conditions of Employment, must be completed in order to claim these expenses.

See also Canada Revenue Agency interpretation bulletin IT-522R - Vehicle, Travel and Sales Expenses of Employees.

Revised: September 06, 2009

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