Business -> Automobiles, Passenger Vehicles and Motor Vehicles -> 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 (Income Tax Act s. 8(1)(f), (h.1)) if the employee:
Form T2200, Declaration of Conditions of Employment, must be completed by the employer in order for the employee to claim these expenses.
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Canada Revenue Agency interpretation bulletin IT-522R - Vehicle, Travel and Sales Expenses of Employees.
Revised: January 12, 2016
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