Transportation & Logistics

Trucking and logistics businesses file more returns than most: fuel tax by jurisdiction every quarter, payroll or contractor payments for drivers, and the usual income tax and GST/HST. Most of the risk sits in records that must be kept trip by trip.

How money moves through a trucking business

The points where tax and accounting rules come into play are numbered.

Stage 1Buy or lease trucksTrucks bought or leased; capital cost allowance claimed.
Stage 2Hire driversDrivers hired as employees or owner-operators.1
Stage 3Book loadsLoads booked with shippers and brokers.
Stage 4Deliver across bordersTrips logged by province, state and distance.2
Stage 5Fuel and road taxesFuel tax filed quarterly under an IFTA licence.3
Stage 6Maintain and replaceRepairs recorded; old trucks sold or traded in.

Numbered points are explained below.

The three points, explained

At: Hire drivers

Owner-operators and "Driver Inc."

How a driver is set up decides how the income is taxed, and an incorporated driver working for one carrier can pay far more than expected. A driver who negotiates rates and pays for fuel, the truck, insurance and repairs is generally self-employed; a driver who incorporates but works like an employee of one carrier may be treated as a personal services business, with a higher tax rate and limited deductions.

How we help

We look at the working arrangement and flag the risk before the return is filed.

At: Deliver across borders

Meal expenses for long-haul drivers

Long-haul drivers who claim the usual 50% of meals claim less than they are allowed. They can deduct 80% of meal costs for eligible trips of at least 24 hours that take them beyond 160 km from home, and employed drivers claim on Form TL2, with a part completed by the employer.

How we help

We check which trips qualify and claim the higher rate on the return.

At: Fuel and road taxes

IFTA fuel tax

Fuel tax is filed every quarter for every jurisdiction you drive in, and it rests on records kept trip by trip. An Ontario-based carrier running qualified motor vehicles in Ontario and at least one other jurisdiction holds one IFTA licence for the fleet, renewed every calendar year, and each quarter the IFTA return reports fuel bought and distance driven in each jurisdiction.

How we help

We keep the fuel and distance records in your books so each return is supported.

Services that apply

All services

Bookkeeping & Accounting
Fuel, distance and driver payments must be recorded trip by trip to support IFTA and payroll.
Tax Returns & Planning
Owner-operators and carriers need the corporate or personal return, with driver expenses claimed correctly.
Tax Representation
Driver status and payroll questions from the CRA need a documented answer.
Cross-Border Tax
Carriers with regular US lanes may need US registrations and a US entity.

Questions

Still have a question?

Which trucks need IFTA?

In Ontario, a vehicle with two axles and a gross or registered gross weight over 11,797 kg (26,000 lb), or certain other configurations, that travels in Ontario and at least one other IFTA jurisdiction.

I drive for one carrier through my own corporation. Is that a problem?

It can be. If you would be an employee without the corporation, the CRA may treat it as a personal services business. The facts of the working relationship decide.

Can I claim 80% of my meals?

Only for eligible long-haul trips: at least 24 continuous hours away, driving a long-haul truck to or from a point at least 160 km from home.