2 cars for 1 compagny

tbtaoufiq wrote: ↑ Hello
I m the sole owner of a construction compagny (inc).
I bought a new truck in 2019.
With the price of gas, i feel it s costing me too much with the truck knowing i really need a truck like 20% of the time.
I m thinking if buying a new electric car under the business.
Would that be ok with cra to have 2 cars in 1 compagny for 1 person?

P.s : i have a personnal car for personnal use and plan ing to keep it.

Thanks

It really depends on several factors - what type of car you get, who has access to the car, where the car will be parked, what is the business need for the car and how would it be used in helping you produce income, etc.

Tiberious

On the tax filing there's no space for you to specify the type of car. You just put in numbers. The CRA will probably look at the total $ amount of the expense claim and see if it's in line with their expectations.

Now obviously having 2 cars will greatly increase your costs. If you've had a previous filing for auto expenses, then a sharp spike can trigger an audit, all other things being equal.

Now if they audit you, and ask how you arrived at your numbers, then this is where you will likely have to reveal that it's based on 2 cars. Then at that point they may choose to disallow it. A lot of judgment is involved. Business expenses need to be reasonable. You can always say something like "I'm attracting high end customers and need a luxury car". Whether your story flies or not...nobody can tell you exactly. But I can say there's nothing specifically within our tax code to limit the # of cars a business can use and claim on the tax return.

Construction company and you only need truck 20% of the time? Is it a glorified grocery getter then?

You plan on getting a toolbox and mounting it in the electric car?

tmkf_patryk wrote: ↑ Construction company and you only need truck 20% of the time? Is it a glorified grocery getter then?

You plan on getting a toolbox and mounting it in the electric car?

I own the company, i dont work my self in the construction site. Some times i need to go get materiel for my people with the truck. I used to do that much more often 5 years ago than today. And your answer has nothing to do with my question, so keep your useless comment for u next time