Annual log of kilometers traveled for business purposes
Employers provide their employees with vehicles which they use both for their employers' activities and for personal purposes. Also, other employers provide a fixed monthly allowance for travel purposed (see CRA form T2200 “declaration of condition of employment” ).In the above situations, employees must maintain a record of vehicle use detailing the proportion, expressed as a percentage, for business purposes and that for personal purposes for a period of one calendar year.
Motor vehicle records - Full logbook
"The best evidence to support the use of a vehicle is an accurate logbook of business travel maintained for the entire year, showing for each business trip, the destination, the reason for the trip and the distance covered." Source: Canada Revenue Agency
Advataxes provides tools to employees so that they can gradually complete their annual kilometer registry. These tools are:
- A distance calculator available on the website and on the app calculating the distance between 2 addresses in North America for a given date (see our page)
- A comment box to insert the reason for the trip
- A field to insert the odometer reading on a given date
- A calculation of the rate of the vehicle used for business purposes over a selected period
- Export functionality of that report to be kept as an audit backup
As the CRA indicates:
“[…] For each business trip, keep a log listing the following:
- date
- destination
- purpose
- number of kilometers you drive
Record the odometer reading of each vehicle at the start and end of the fiscal period. If you change motor vehicles during the fiscal period, record the dates of the changes and the odometer reading when you buy, sell, or trade the vehicle.”
As for those who would qualify for a simplified logbook, a three month sampling as described above is still necessary for any given year.
Here is an example of such a registry for a period of one month establishing the business use as 61.1%. The distance calculator automatically fills in the number of kilometers between 2 addresses in Canada and the United States.
Kilometer Log
In this other example, after the employee entered the daily KM rate using the App and the website connection, trip details as well as the odometer reading at the beginning of each month, Advataxes has calculated that the rate for business use of an Elantra N 2022 for a period from January 1, 2024 to November 1, 2024 to be at 71.4%.
The goal is to provide a modern, user-friendly and efficient tool to employees in order that they comply with tax authorities requirement for vehicle use partly for business use in the most efficient matter in order that they avoid long and costly tax audits.
If instead the employer reimburses an amount based on each kilometer driven, see our page "kilometer allowance"