Administered by Government of Canada · Last verified: July 2026
Deduct all business-related vehicle costs: fuel, insurance, repairs, lease payments, and depreciation, based on the percentage of kilometres driven for business. For example, 15,000 business kilometres out of 50,000 total is 30%, so on $8,000 of annual vehicle costs that is about $2,400 deductible.
You claim this on your tax return, so the money comes back as a lower tax bill or a refund after you file. If you missed it in a past year, you can often still recover it by adjusting a prior return.
Take the 3-minute quiz to find out, and see every other Canadian program you qualify for at the same time.
Check my eligibilityMotor Vehicle Expense Deduction is generally open to incorporated, self-employed, partnership businesses, in any province or territory. Confirm the full criteria on the official program page before applying.
The estimated value is Typically $4,000 to $15,000 per year. The actual amount depends on your eligible costs, the program's budget, and approval.
Claimed on a return, so a missed year can usually be recovered by amending. How far back depends on whether you file personally or as a corporation; confirm the eligible years with your accountant.
1. Start a mileage log immediately (CRA requires it) 2. Track all vehicle-related expenses 3. Calculate business-use percentage at year-end 4. Claim on T2125 or corporate return
Annual: claim on your tax return.