Automobile and motor vehicle benefits

As a temporary COVID-19 response measure, the CRA will consider that an employee who used an automobile more than 50% of the distance driven for business purposes in the 2019 tax year will also have done the same in the 2020 and 2021 tax years. For more information, please see the December 21, 2020, Department of Finance News Release.

The term vehicle includes both automobiles and motor vehicles not defined as automobiles. 

An employee may use one of your vehicles for purposes other than business. The personal use of the vehicle is considered a taxable benefit for the employee. For more information, see Personal driving (personal use).

An employee may use their personal vehicles to carry out their employment duties and get an allowance for the business use of that vehicle. The reimbursement for this use may be a taxable benefit. For more information, see Automobile and motor vehicle allowances.

If the vehicle you provide to your employee is not included in the definition of automobile as described, see Benefit for motor vehicles not defined as an automobile.

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