CRA GST/HST Vehicle Expense Audit — Montreal CPA Firm Near You: Defending Business-Use Percentages, Mileage Logs, and ITC Claims

A CRA GST/HST Vehicle Expense Audit focuses on whether your business or self-employed activity correctly claimed Input Tax Credits (ITCs) related to vehicle expenses such as gas, repairs, maintenance, insurance, lease payments, and depreciation (CCA).
Because vehicles often involve mixed personal and business use, CRA aggressively audits these claims to ensure business-use percentages are accurate, documented, and supported by verifiable records.

Mackisen CPA Montreal specializes in defending GST/HST vehicle audits by reconstructing mileage logs, validating expenses, correcting allocation errors, and preparing CPA-certified audit files that meet CRA’s strict standards.

Legal Foundation

Excise Tax Act s.169 — governs ITC eligibility for business-related vehicle expenses.
Excise Tax Act s.141 — outlines rules for mixed-use property.
Income Tax Act s.67 & s.18 — reasonableness rules and restrictions for motor vehicle expenses.
Income Tax Act Regulations — define passenger vehicle cost limits and lease inclusions.
Case law: Royal Bank v. Canada — ITCs must be backed by clear, traceable documentation.

Learning insight: CRA denies ITCs automatically when business-use documentation is weak — even if the expenses are legitimate.

Why CRA Audits Vehicle Expenses

CRA selects vehicle-expense files when it detects:
• high business-use percentages (over 70% triggers scrutiny)
• round-number mileage or estimated logs
• corporation-owned vehicles used personally
• missing fuel, repair, or insurance invoices
• personal trips included in business mileage
• leased luxury vehicles claimed at 100%
• inconsistent mileage across years
• Uber/contractor activity not matching business income
• fleet expenses claimed without logs

Learning insight: CRA assumes personal use is under-reported unless proven otherwise.

CRA Vehicle Expense Audit Process

1. CRA requests:
   – mileage logs
   – odometer readings (start/end of year)
   – gas, repair, and maintenance invoices
   – insurance statements
   – lease/loan agreements
   – vehicle registration
   – business calendars & client meeting logs
   – proof of payment for all expenses

2. CRA recalculates business-use percentage.

3. CRA determines allowable ITCs based on actual use, not estimates.

4. CRA reassesses disallowed portions and may apply penalties.

5. Mackisen CPA reconstructs accurate logs and defends each ITC.

Learning insight: CRA wants measured mileage, not “good enough” estimates.

Mackisen CPA’s Vehicle Audit Defense Strategy

• reconstruct full mileage logs using GPS data, calendars, emails, and client records
• calculate accurate business-use percentages
• defend ITCs with invoices, receipts, and proof of payment
• remove personal-use portions proactively to limit penalties
• prepare CPA-certified audit binders grouped by expense category
• correct past returns if necessary and negotiate penalty relief
• defend corporate vehicles with shareholder-benefit calculations
• analyze fleet and multi-vehicle allocations to match CRA rules

Learning insight: A strong defense requires mileage + receipts + logic — we deliver all three.

Common CRA Findings in Vehicle Audits

• ITCs denied due to missing or estimated logs
• personal-use miles included in business claims
• claim of 100% business use rejected
• luxury vehicles exceeding passenger-vehicle limits
• missing invoices for gas, insurance, or repairs
• corporate vehicles resulting in taxable shareholder benefits
• mixed-use vehicles incorrectly allocated
• Uber/taxi drivers misclassifying personal trips as business

Learning insight: CRA’s biggest focus is proving actual usage — not the receipts alone.

Real-World Results

• A consultant avoided a $22,000 reassessment after Mackisen CPA rebuilt a full mileage log from Google Maps timeline + client schedules.
• A contractor reversed a $38,000 ITC denial when we proved commercial use with job-site logs and fuel receipts.
• A corporation eliminated penalties after we calculated and reported the correct shareholder-benefit adjustments.
• A real estate agent cleared a CRA review once we provided odometer photos, showing CRA’s assumptions were incorrect.

Learning insight: When the mileage log is solid, CRA accepts the ITCs — even in high-use cases.

SEO Optimization and Educational Value

Primary keywords: GST/HST vehicle audit, CRA vehicle expense audit, mileage log audit, Mackisen CPA Montreal, business-use vehicle audit
Secondary keywords: ITC vehicle expenses, CRA car audit, corporate vehicle audit, mixed-use vehicle GST, GST mileage log Canada

Learning insight: Vehicle audit content is highly searched — clear, authoritative explanations raise both SEO rankings and client confidence.

Why Mackisen CPA Montreal

With 35+ years of CRA audit-defense experience, Mackisen CPA Montreal is Québec’s top authority on vehicle expense audits. We understand ITC rules, mixed-use restrictions, and CRA mileage expectations — and we build audit files that withstand scrutiny.

Learning insight: Vehicle audits are documentation battles — we win with precision.

Call to Action

If CRA is auditing your vehicle expenses or ITC claims, act fast.
Contact Mackisen CPA Montreal for immediate support, document reconstruction, and complete audit defense.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA GST/HST Vehicle Expense Audit tests business-use accuracy and documentation quality. Mackisen CPA Montreal ensures your logs, invoices, and tax calculations are defensible — protecting your ITCs and preventing reassessments.