Maintaining Business Vehicle Log

Vehicle expenses are apportioned between deductible business expenses and non-deductible personal expenses based on the ratio of business versus personal kilometers driven. To support a deduction or claim, you must keep accurate records that show the part of the total kilometres that you drove for your business.

The best evidence to support the use of a vehicle is an accurate logbook of business travel maintained for the entire year. You can deduct motor vehicle expenses only when they are reasonable and you have receipts to support them. To get the full benefit of your claim for each vehicle, keep a record of the total kilometres you drive and the kilometres you drive to earn business income. For each business trip, keep a log listing the following: date, destination, purpose, and number of kilometres driven.

If you use more than one motor vehicle for your business, keep a separate record for each vehicle that shows the total and business kilometres you drive, and the cost to run and maintain each vehicle. Calculate each vehicle’s expenses separately.

The types of expenses you may be able to deduct include: Licence and registration fees; fuel and oil costs; insurance; interest on money borrowed to buy a motor vehicle (special interest deduction limitation rules apply in certain cases); maintenance and repairs; and leasing costs (a maximum per month deduction limit may apply). The expenses also include all applicable federal and provincial sales taxes (GST, HST, PST and QST) to the extent the taxpayer is not a sales tax registrant and does not claim an input tax credit (input tax refund in Québec) for the taxes paid. \You can deduct the full amount of parking fees related to your business activities and supplementary business insurance for your vehicle.

This article is intended for general information purposes only and does not constitute professional advice.  Income tax law and regulation change frequently and the content on this article may no longer reflect the current state of the law. If you have any specific questions, you should consult a professional services advisor or email us for further advice.