Planning a business trip as a Canadian entrepreneur or small business owner? Whether you’re heading to a conference in Toronto, a client meeting in Vancouver, or an industry summit in New York, it’s essential to understand how to make your business trip tax-deductible in Canada. Knowing the tax implications of your travel can help you save money and stay compliant with CRA requirements. Let’s break down the essentials so you can stay focused on your goals—while the tax details stay under control.
What Qualifies as a Business Trip?
Not every out-of-town venture qualifies for tax deductions. To be eligible, your travel must be:
- Primarily for business purposes (e.g. client meetings, training, conferences).
- Necessary for earning income, not a personal vacation disguised as work.
- Well-documented with proof of business intent (e.g. itinerary, meeting agendas, registration confirmations).
Pro tip: If your trip is partially personal and partially business, only the business-related expenses can be deducted—and you must prorate shared costs accordingly.
Remember that if you are audited it will be on you to provide the proof to allow CRA to assess in your favour. A little upfront documentation can help make that a smooth process. Especially as travel is one of the more common reviews we see from CRA as they are well aware that individuals are more aggressive in this area.
Deductible Travel Expenses
Here’s a list of common travel expenses that can be deducted on your business tax return:
1. Transportation
- Airfare, train, or bus tickets
- Vehicle expenses if driving (fuel, maintenance, mileage if personal vehicle is used)
- Taxi, ride-share, or car rental fees
- Parking and tolls
2. Accommodation
- Hotel stays during business days
- Airbnb or short-term rental if used solely for business
Note: CRA may scrutinize luxury or extended stays, especially if they’re close to tourist locations or include family members. If you go for a week and the conference was only one day you will then have to position the argument as to why the extra days were not personal.
3. Meals and Entertainment
- 50% of meal costs are deductible when incurred while away from your tax home and directly related to business
- Includes restaurant bills, tips, or meals with clients (keep detailed notes!)
4. Incidentals
- Wi-Fi charges, phone roaming fees, baggage fees
- Conference fees, business materials
What the CRA Expects: Documentation is Key
When it comes to deductions, the Canada Revenue Agency wants proof. Maintain:
- Receipts and invoices
- Credit card or bank statements
- A clear itinerary or travel log
- Notes on business purpose and contacts involved
Use apps like Expensify, Dext, or Hubdoc (integrated with platforms like Xero) to streamline recordkeeping and attach documents to transactions.
Mixed-Use Travel? Be Cautious
If you’re blending business with pleasure (say, a weekend in Montreal after a client meeting), you can only deduct the portion of the trip directly related to your business. For example:
- Airfare: Deductible if the primary reason for the trip is business.
- Hotel: Only the nights stayed for business purposes are deductible.
- Meals and transit: Prorate if they apply to both personal and business days.
Planning your itinerary thoughtfully—and separating personal time from work time—will help you defend your claims if reviewed.
However, tagging on a personal trip onto a business trip is also a recommended strategy. This allows you to perhaps deduct the airfare to and from the city (say Seattle for example) and the days of the conference. Then add a personal couple days to explore the city and make sure those nights are recorded as personal expenses. This is then a more clear cut strategy to tag on a personal portion onto a primarily business trip.
Traveling Within Canada vs. Internationally
Domestic travel is treated similarly to international travel, but CRA may scrutinize foreign trips more closely to ensure they aren’t personal getaways. If you’re attending a conference in another country, be ready to show:
- Proof of registration
- Detailed schedule
- Business outcomes or networking goals
Be cautious with trips to destinations known more for leisure than commerce—think Cabo, not Calgary.
Depending on the country of travel, cash may also be more commonly used and with no receipts to support. Our clients have commonly run into this dilemma and unfortunately it does mean that CRA if reviewing, would disallow those “cash expenses – taxi trips etc” if there was no receipts/proof. When possible, a per diem can be used in these cases. Check out CRA’s per diem amounts by country: https://www.canada.ca/en/revenue-agency/corporate/about-canada-revenue-agency-cra/travel-directive/appendix-c-daily-meal-rates-locations-abroad-jan-2022.html
Final Tips Before You Pack
- Get pre-approval: If you’re incorporated, make sure travel policies are set and pre-approved to qualify as an expense.
- Use a business credit card for all trip expenses to simplify tracking.
- Keep business travel separate from personal vacations whenever possible.
Summary
Business trips can be a strategic part of growing your company, but only if you navigate the tax rules with care. By staying organized, documenting your journey, and claiming only what’s allowed, you’ll avoid red flags which could trigger additional CRA scrutiny.
Have questions about an upcoming trip or need help structuring your travel expenses? At Virtual Heights Accounting, we specialize in helping Canadian small businesses make sense of tax regulations and stay audit-ready—without the stress.
Let’s make your next trip tax-smart.
Virtual Heights Accounting offers comprehensive accounting and tax services for incorporated small businesses and not-for-profits in Canada. We specialize in reducing administrative burdens and preventing unexpected tax bills through a client-centric approach. Note this is intended to be a general use advice and may not be appropriate for all situations. Ensure that you seek professional advice before attempting any such scenario.
