Business ->
Vehicle definitions
For income tax purposes, there are limitations on the expenses that can be
claimed for a passenger vehicle. A passenger vehicle is a
motor vehicle
designed to carry people on highways and streets, and can carry a driver and
no more than 8 passengers. Some motor vehicles are NOT considered
passenger vehicles, and do not have the cost limitations of passenger
vehicles. See also the CRA web page What
is an automobile?
The following table is from the CRA publication T4002 Business and
Professional Income, and illustrates when a motor vehicle is or is not a
passenger vehicle:
| Vehicle Definitions |
| Type of Vehicle |
Seating
(includes
driver) |
Business use in year
bought or leased? (2) |
Vehicle
definition (1) |
| Coupe, sedan, station wagon, sports car, or luxury car |
1 to 9 |
1% to 100% |
passenger |
| Pickup truck used to transport goods or equipment in the course of
business |
1 to 3 |
more than 50% |
motor |
| Pickup truck (other than above)* |
1 to 3 |
1% to 100% |
passenger |
| Pickup truck with extended cab used to transport goods, equipment,
or passengers in the course of business |
4 to 9 |
90% or more |
motor |
| Pickup truck with extended cab (other than above)* |
4 to 9 |
1% to 100% |
passenger |
| Sport utility used to transport goods, equipment, or passengers in
the course of business |
4 to 9 |
90% or more |
motor |
| Sport utility (other than above) |
4 to 9 |
1% to 100% |
passenger |
| Van or minivan used to transport goods or equipment in the course of
business |
1 to 3 |
more than 50% |
motor |
| Van or minivan (other than above) |
1 to 3 |
1% to 100% |
passenger |
| Van or minivan used to transport goods, equipment or passengers in
the course of business |
4 to 9 |
90% or more |
motor |
| Van or minivan (other than above) |
4 to 9 |
1% to 100% |
passenger |
| *A vehicle in this category that is used more than 50%
to transport goods, equipment, or passengers while earning or
producing income at a remote work location or at a special work site
that is at least 30 kilometers from the nearest community having a
population of 40,000 persons is considered a motor vehicle. |
(1) A
"passenger vehicle" generally means an automobile purchased or
leased after June 17, 1987.
(2)
Note re "more than 50%" and "90%
or more":
The Income Tax Act does not impose the 50% limit, but instead uses the word
"primarily". Canada Revenue Agency uses "more than
50%" as the guideline for "primarily".
The Income Tax Act does not impose the 90% limit, but instead uses the
words "substantially all". Canada Revenue Agency uses
"90% or more" as the guideline for "substantially all".
See: Automobile
taxable benefits
Revised: September 06, 2009
