Vehicle expenses are one of the most commonly claimed deductions for Canadian business owners — and one of the most commonly challenged, for a simple reason: the entire claim hangs on a single number, and most people can't prove theirs. That number is your business-use percentage, and the logbook is the only thing that makes it real.
Unless a vehicle is used purely for business, you can't deduct its costs outright — you deduct the business share. Drive the vehicle sixty percent for business, and sixty percent of the eligible costs are deductible. Every vehicle expense on the return flows through that one ratio, which makes it the highest-leverage number in this whole category.
And here's the part that decides reviews: the percentage isn't an estimate you're entitled to. "I'd say about seventy percent business" is a feeling. The kilometres in a logbook are a fact. The CRA is entitled to ask for the fact.
The requirements are modest. For each business trip: the date, the destination, the purpose, and the kilometres driven. Alongside that, your odometer readings at the start and end of the year, so total kilometres are known and the business share can actually be computed as a percentage.
Personal trips don't need to be itemized — they're simply the remainder. But "business trip" means genuinely business: client visits, supplier runs, trips between work sites. Commuting between home and a regular place of work is generally personal, which surprises people every year and inflates many self-estimated percentages past what a logbook would support.
The CRA recognizes more than one way to run this. The full method is a logbook covering the entire year, every year. There's also a simplified approach, where after establishing a full base-year logbook, a shorter sample period in later years can be used to support the claim — provided usage patterns stay in line with the base year. The details and conditions matter, and whether the simplified route fits your situation is worth confirming with your accountant. The practical takeaway is friendlier than most people expect: the logbook burden is heaviest exactly once, and lighter after that.
The business-use percentage applies to the vehicle's operating and ownership costs — fuel, insurance, licence and registration, maintenance and repairs, loan interest or lease costs within the limits the CRA sets, and depreciation through capital cost allowance. Two habits make this work at tax time: keep every vehicle receipt through the year (fuel receipts are thermal paper, so capture them digitally before they fade), and keep parking separate — business parking is generally deductible in full rather than prorated, so lumping it in with fuel shortchanges you.
If you're incorporated, the vehicle question has an extra layer — whose car it is, and whether kilometre allowances or company ownership makes more sense — which is a planning conversation with our tax team, not a logbook problem.
The classic objection — nobody remembers to fill in a paper log — died with the smartphone. Mileage tracking apps, including the tracker built into QuickBooks Online, log trips automatically in the background using GPS; your job shrinks to swiping each trip as business or personal and noting the purpose. Minutes a week, and the output is a dated, kilometre-accurate record that beats anything reconstructed by hand.
Reconstructing a logbook in March from a calendar and guesswork produces exactly what it sounds like, and reviewers have seen thousands of them.
Claim vehicle expenses without a logbook and nothing happens — until a review. Then the reviewer asks for the log, and without one your percentage is unsupported. The claim can be reduced to what you can demonstrate, which may be a fraction of what you deducted, plus interest on the difference — across every year under review. Years of legitimate business driving, lost for want of an app running in the background.
The business-use percentage drives every vehicle deduction, and the logbook is the only evidence that percentage exists. Turn on an app today, capture the receipts, and the deduction defends itself. If you want your vehicle claim structured properly before filing season, book a free consultation.
This post is general information, not tax advice for your specific situation.
