Yes, you can deduct vehicle expenses if you use your vehicle for business or self-employment purposes. However, the Canada Revenue Agency (CRA) has strict rules about what qualifies. Personal driving (like commuting to work) is never deductible, but if this CRA rule may apply to you, you can claim expenses for the portion of driving that's business-related. You'll need to track your mileage carefully and keep receipts for all expenses. Vehicle deductions are available to these groups: Self-employed individuals (sole proprietors, freelancers, contractors) Small business owners operating as sole proprietors or partnerships Commission-based employees (in rare cases where the employment contract requires it) Rental property owners using vehicles for property maintenance or management If you're self-employed, you may also want to use our Self-Employed Tax Estimator to calculate your total deductible expenses and tax liability for 2026. The CRA allows deductions for reasonable and necessary business-related vehicle expenses.
No. Commuting from home to a regular workplace is considered personal driving and is never deductible. Vehicle deductions only apply to business or self-employment use.
You can only deduct the percentage that corresponds to your business-use mileage. For example, if 50% of your driving is business-related, you can deduct 50% of your vehicle expenses.
Yes. The CRA expects you to maintain detailed mileage records showing dates, destinations, and business purpose. Without this documentation, your claim may be denied during an audit.
Yes, if you own the vehicle for business use. Vehicles fall into CCA Class 10 and allow a 30% declining balance deduction annually, but only for the business-use percentage of the vehicle.
The actual expense method requires you to track all receipts and multiply them by your business-use percentage. The simplified method uses a fixed per-kilometer rate set by the CRA, requiring only mileage tracking.