If you own a corporation and use your personal vehicle for work, you are eligible to receive a tax free reimbursement of your vehicle expenses and the business is also entitled to fully expense that same amount – without any receipts!
Many business owners find it difficult to keep track of their vehicle receipts. CRA’s simplified ‘Vehicle Allowance’ provides a RATE/KM that business owners can use as a business expenses.
This rate changes periodically, for 2017:
- $0.54/km for the first 5000 kms
- $0.48/km for additional kms
Therefore, no more keeping receipts! Insure that you are paying every vehicle expense personally and keep a vehicle log of business kilometres driven. At the end of the year/period the business reimburses you based on your log of kilometres driven for business.
Note: The Vehicle Allowance can also be used to reimburse any employee using their own vehicle that keeps a log of business kilometres driven. The reimbursable amount can be paid out directly and should not be included in payroll.
