Business -> Automobiles, Passenger Vehicles and Motor Vehicles -> Vehicle definitions
Vehicle Definitions For Tax Purposes
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:
(1) A "passenger vehicle" generally means an automobile purchased or leased after June 17, 1987.(2) Notes 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".
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Revised: September 19, 2017
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