When a company-owned vehicle is used by an employee for personal use, a taxable benefit should be calculated ($0.26 per KM in 2016 and $0.25 per KM in 2017) and added to the employment income reported on the personal tax return. This benefit can be reduced if the following conditions are met:
- The business use of the vehicle is 50% or more of the total kilometers driven.
- The personal use of the vehicle is less than 1,667 km per month, or 20,000 km in total during the year.
It is required that a logbook or some other form of support be kept of work-related kilometers to verify your tax claim. Logbooks are available at our office should you require one.
There is an online tool that can help you calculate the taxable benefit on personal use of a company-owned vehicle at www.cra.gc.ca/autobenefits-calculator.