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Home  ->  Business   ->   Automobiles, Passenger Vehicles and Motor Vehicles -> Vehicle trip log - Business use vs personal use of vehicles

Vehicle Trip Log / Business vs Personal Use

Keep a Trip Log of Business Use / Data to Record

Logbook for a Sample Period

Quebec Supporting Documents for Vehicle Mileage

Business Use vs Personal Use of a Vehicle

(i) Employees

(ii) Self-Employed / Business Owner

Tax Tips Resources

Canada Revenue Agency (CRA) Resources

Keep a Trip Log of Business Use / Data to Record

We can't stress this enough - keep a trip log of your business use in order to support vehicle expenses you're claiming, or to support business use when a taxable benefit is being calculated!

A separate log should be kept for each vehicle which is driven for both business and personal use.  For the self-employed, only the business portion of vehicle expenses can be deducted from income, and GST/HST input tax credits are only allowed related to the business use of a vehicle.  For businesses which provide vehicles to employees, trip logs substantiate the business use of a vehicle, and the business must calculate the taxable benefit to employees based on the personal use.

The log should record for each business trip:

bulletthe date,
bulletreason for the trip, and
bullet kilometres driven.

Record the actual odometer reading:

bullet at the beginning/end of each year (i.e., once each year) to determine the total kilometres driven in each fiscal period
bulletif you buy, sell or trade your vehicle during the year
bulletwhen your vehicle insurance is renewed, if you will get a discount for having low kilometres.

Logbook for a Sample Period

Starting in 2010, once a taxpayer has maintained a trip log covering a full 12-month period that is typical for the business (the "base year"), Canada Revenue Agency (CRA) has indicated they would "afford considerable weight" to a trip log maintained for a "sample period" as evidence of the business use for a full year, if it meets the following criteria:

bullet A trip log must be maintained for a sample period of at least one continuous 3 month period in each subsequent year after the base year.
bullet The distances travelled and business use of the vehicle during the 3 month sample period is within 10% of the corresponding figures for the same 3 month period in the base year.
bullet The calculated annual business use of the vehicle in a subsequent year does not go up or down by more than 10% in comparison to the base year.

The base year business use will be used in subsequent years, along with the business use from the 3 month sample period, to determine the business use for the entire subsequent year.  See the CRA article Documenting the use of a vehicle for more detailed information, and for an example of the formula used to calculate business use in subsequent years.

A trip log constructed after the fact may not be acceptable for tax purposes - see the October 2021 Life in the Tax Lane from Video Tax News.

Quebec Supporting Documents for Vehicle Mileage

In Quebec, supporting documents that must be retained regarding automobile mileage include:

bulleta statement of kilometres travelled for each vehicle used in part for business and in part for personal purposes
bulletdocuments substantiating trips

See Quebec's publication IN-253-V Taxable Benefits, for more information related to logbooks for employees.

Business Use vs Personal Use of a Vehicle

(i) Employees

If an employee travels between home and work, the travel is normally considered personal use of the vehicle, unless there was a business matter attended to between the home and the place of work.

If an employee travels between (i.e., to and/or from) home and a customer's place of work, the travel is normally considered business use.

For more information, see the CRA Interpretation Bulletin IT-522R Vehicle, Travel and Sales Expenses of Employees (Archived).

In Quebec, as per Revenu Quebec's Logbook information, an employee who makes use of an employer's automobile must keep a detailed logbook of the trips made with the automobile, and provide the employer a copy of the logbook no later than:

bulletJanuary 10 of the year that follows the year during which the automobile was available to the employee; or
bulletthe 10th day following the day on which the automobile is returned to the employer

(ii)Self-Employed / Business Owner

If a self-employed person or a business owner has a home office and another office or place of business, usually the office outside the home is considered the base of business.  Travel between the home office and the base of business will normally be considered personal use of the vehicle.

Driving between (i.e., to and/or from) different premises of the same business would usually be considered business use.

Driving between the home office of a self-employed person and a customer's place of work is considered business use, as is any other travel incurred for business purposes.

Tax Tips: 

Make sure you keep a trip log of vehicle travel!!

Keep copies of all receipts for vehicle expenses if you are claiming vehicle expenses!

You cannot claim expenses based on a rate per km - you must support expenses with copies of detailed receipts. Resources

Motor Vehicle Expenses

Automobiles, Passenger Vehicles and Motor Vehicles - Tax Issues

Automobile Taxable Benefits

Video Tax News March 2020 - apps for tracking vehicle mileage

Canada Revenue Agency (CRA) Resources

IT-521R Motor vehicle expenses claimed by self-employed individuals (Archived)

Motor vehicle expenses - sole proprietorships and partnerships

T4130 Employers' Guide - Taxable Benefits and Allowances

Revised: January 05, 2024


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