Corporate vs. Personal Vehicle Ownership: Tax Implications 
Buy Vehicle under corporation in Canada can be a strategic decision that offers various benefits, including tax deductions, asset protection, and enhanced corporate image. This approach allows businesses to leverage vehicles for operational needs while optimizing financial and tax planning.
Both small and large  corporations in Canada can purchase vehicles. The key  is ensuring the vehicle is used for business purposes to leverage tax advantages and comply with regulations.
If you already own a vehicle personally and want to transfer it to your corporation, it can be done. This process involves:
Valuation: Determine the current market value of the vehicle. Sale/Transfer: Sell or transfer the vehicle to the corporation at the determined market value. Documentation: Complete the necessary paperwork and update the vehicle registration to reflect the corporation as the new owner. Tax Considerations: Be mindful of potential tax implications, such as capital gains or recapture of depreciation.
Benefits of Purchasing a Vehicle Under Your CorporationÂ
Here’s a comprehensive look at these benefits: Depreciation and Expense Deductions
When the corporation owns the vehicle, it can claim: Depreciation (Capital Cost Allowance): Allows the corporation to deduct the cost of the vehicle over its useful life. Operating Expenses: Includes gas, repairs, license fees, and insurance.
Expense Deduction Based on Business Use: Over 90% Business Use: All expenses can be claimed as business expenses. Under 10% Business Use: No expenses can be claimed. Mixed Use: Expenses must be allocated based on actual business and personal use, supported by detailed travel logs. Legal Protection
Buy a vehicle under corporation or business name maintains legal separation between personal and corporate assets. This separation provides greater protection against personal liability in the event of an accident. Clear Financial Management
Owning the vehicle through the corporation facilitates clearer financial management. It simplifies tracking and reporting of business expenses related to the vehicle, ensuring better financial oversight. Tax Advantages
HST Claims:Full HST Claim : If the vehicle is used exclusively (90% or more) for business purposes, the corporation can claim the full HST paid on the purchase.
Partial HST Claim: If used less than 90% for business, the claimable HST amount will be proportionally reduced based on business use. Claimable Expenses
For tax purposes, the following motor vehicle expenses are eligible:
• Licence and Registration Fees
• Fuel and Oil Costs
• Electricity Costs for Zero-Emission Vehicles
Consulting a Tax Advisor
For tailored advice and compliance with relevant regulations, consulting a tax advisor is crucial.
