Yes, you can deduct vehicle and travel expenses for your small business in Canada, but only the portion that is directly related to earning business income. The Canada Revenue Agency (CRA) carefully tracks how much of your vehicle use is truly business-related versus personal. You'll need to keep detailed records of your mileage, distances traveled, and the business purpose of each trip. The key rule is simple: only claim the percentage of expenses that match your business-use percentage. When you use a vehicle for your business, you can deduct two types of costs: Operating expenses include fuel, insurance, maintenance, repairs, oil changes, and parking fees. You calculate the deductible portion by dividing your business kilometers by your total kilometers for the year. For example, if you drove 40,000 kilometers in total and 16,000 were for business, you can deduct 40% of your operating costs. Capital cost allowance (CCA) applies to the vehicle itself. Instead of deducting the full purchase price in one year, you claim depreciation over time. The CRA allows you to deduct a percentage of the vehicle's cost each year using prescribed rates. You can only claim CCA on the business-use percentage of the vehicle.
No. You can only deduct the percentage of expenses that matches your business-use percentage. For example, if 40% of your annual driving is for business, you can deduct 40% of your fuel, insurance, and maintenance costs. Keep a detailed mileage log to support your claim.
Yes, but only 50% of meal and beverage costs are deductible. This applies to meals while traveling on business, meals with clients, and food purchased at conferences. Keep all receipts and note the business purpose on each one.
Commuting from home to your regular workplace is not deductible. However, travel to meet clients, attend conferences, visit suppliers, or conduct business away from your main location is generally deductible. The trip must be directly related to earning business income.
No, you do not need to attach receipts to your tax return. However, you must keep all receipts and records for at least six years in case the CRA asks for proof. Digital photos of receipts are acceptable.
Yes. You can claim capital cost allowance (CCA) on the purchase price of a business vehicle. The CRA allows you to deduct a percentage of the vehicle's cost each year using prescribed depreciation rates. You can only claim CCA on the business-use portion of the vehicle.