Tax rules, thresholds and administrative procedures can change. Confirm current official requirements and obtain advice for material transactions or unusual facts.
The deduction belongs to the business, not the payment card
A corporate expense does not become personal merely because the owner used a personal credit card. If the corporation received the goods or services and the cost is reasonable and deductible, the corporation can record the expense and an amount owing to the owner.
Example
An owner pays $4,500 for corporate software and $1,200 for business insurance personally. The corporation records the appropriate expenses and credits the shareholder-loan account by $5,700. A later repayment to the owner reduces that credit balance and is not a second expense.
Receipts and business purpose
The corporation should retain invoices in its legal name where possible, proof of payment and the business purpose. Mixed purchases should be split. Personal loyalty points or credit-card rewards may create separate practical considerations but do not replace proper expense records.
GST/HST input tax credits
The corporation may claim eligible input tax credits where documentation and commercial-use conditions are met. An invoice addressed only to the owner can create documentation concerns for larger amounts, so request corrected supplier invoices when appropriate.
Do not confuse a credit balance with income
Where the corporation owes the shareholder for valid expenses or funds contributed, repayment is generally different from salary or a dividend. The continuity schedule should distinguish expense reimbursements, capital contributions and loans.
Create a monthly expense report
Use a standard report listing date, supplier, purpose, amount, tax and receipt. Approve and post it monthly. This prevents lost deductions and keeps personal and corporate transactions separate.
This article provides general Canadian tax information and is not a substitute for tax, legal, financial or investment advice based on complete circumstances.