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Q: Can I deduct vehicle expenses if I use my personal car for business in Canada?
A: Yes, in Canada, if you use your personal vehicle for business purposes, you can deduct a portion of the vehicle expenses from your business income. However, only the portion that directly relates to business use is deductible. It's important to keep detailed mileage logs and supporting receipts to justify your claim.
You have 3 options for vehicle expense deduction
🔹 Option 1- Pay a Reasonable Vehicle Allowance (Most Common & Simple)
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The corporation pays you a per-kilometer allowance for business use
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CRA allows:
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$0.68/km for the first 5,000 km (2025 rate)
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$0.62/km after 5,000 km
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🔹 Option 2: Reimburse Actual Expenses
You submit actual receipts for fuel, insurance, maintenance, etc.
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The corporation reimburses only the business-use portion
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You must track your business vs. personal km
🟠 More paperwork, but lets you deduct actual amounts
🔹 Option 3: Lease or Transfer Ownership to the Corporation
You submit actual receipts for fuel, insurance, maintenance, etc.
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The corporation leases the car from you
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Or, the corporation owns the vehicle outright
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In this case, the corporation deducts:
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Lease payments or capital cost allowance (CCA)
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Operating costs (fuel, maintenance, etc.)
Q: What is BRO (Business Registration Online)?
A: BRO is an online portal that allows businesses and individuals, including non-residents to:
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Register for a Business Number (BN)
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Register for CRA program accounts such as:
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GST/HST
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Payroll (RP)
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Import/Export (RM)
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Corporate Income Tax (RC)
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➡️ This system is used by residents and non-residents who need to carry on business or file taxes in Canada.
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