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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:

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) 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".

Other resources

All topics related to vehicles and business

Automobile taxable benefits

Revised: September 19, 2017

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