A vehicle you buy for the business lasts for years, so its cost is deducted over years through capital cost allowance (CCA). Every depreciable property belongs to a class, and the classes are the rows of Area A on Form T2125, Statement of Business or Professional Activities.
Class 10 is where most business vehicles go. Its title on the Canada Revenue Agency (CRA) list is Motor vehicles, and it also carries some older computer equipment.
What goes in this class
- motor vehicles — vans, trucks, and other vehicles that are not passenger vehicles over the cost limit
- passenger vehicles that do not meet the Class 10.1 conditions
- general-purpose electronic data processing equipment (computer hardware) and the systems software for it, including ancillary data processing equipment, acquired before March 23, 2004
The class has its own rate, set out on the CRA's page of classes.
Motor vehicle, passenger vehicle, and zero-emission vehicle are defined terms. The CRA's page on the type of vehicle sets out which is which.
What does not
A passenger vehicle that cost more than the year's prescribed limit. Cost is measured before you add the GST/HST or the PST. A passenger vehicle over that limit goes to Class 10.1 instead, and each one is listed separately.
An eligible zero-emission vehicle. It goes to Class 54, unless you elect out of that class.
What to keep
Keep the bill of sale or purchase invoice for the vehicle, showing the seller, the date, the vehicle, and the price before tax with the GST/HST or PST shown separately. The price before tax is what decides between Class 10 and Class 10.1, so a document that separates the tax matters more here than on most purchases.
Keep the paperwork for a vehicle you sell or trade in as well, since a disposition changes the class balance. Dossier tags the invoice and files it with the year's records, so it is there when you file. Don't send it in with your return — keep it in case the CRA asks to see it.
Official CRA sources
Source: Canada Revenue Agency (canada.ca). Not tax advice.