Personal Finance

Can credit card annual fees be written off as a business expense?

  • Last Updated:
  • May 3rd, 2021 11:35 am
[OP]
Deal Addict
Mar 6, 2014
1040 posts
209 upvotes
Toronto

Can credit card annual fees be written off as a business expense?

Mods, move to CC forum if you think it is more appropriate....

Bits and pieces of this topic has been covered here before, but I want to have a discussion to list out the details for myself and others.

Can credit card annual fees be written off as a business expense for tax purposes?

What I have gathered is if you run a business, the credit card annual fees can be written off as an expense provided that the transactions on your credit card are related to your business activities.

My question is how stringent will the CRA be looking at this? If I decided to buy some gum at the gas station and swiped my business use credit card, am I no longer able to expense the annual fee? What if half of my transactions are related to my business?

Will the CRA consider what type of business you have before permitting this type of fees to be considered as a business expense?

I'm thinking of getting the AMEX Business Platinum Card which has a whopping $500 annual fee. I used to have a few colleagues over in the business development department that carries this card and I always wonder why they would bite the bullet on such high fees. These people earn commission income, so I'm not sure if they can expense it either, but they do use their own credit card for work purposes.
5 replies
Banned
Apr 30, 2021
26 posts
13 upvotes
If you use the card mostly for business purchases, I say go ahead and deduct the fees as a business expense. Generally, the rule is that any expense used to earn taxable income is deductible.

If you want peace of mind, just carry a personal and business credit card with you; use the personal card for personal expenses, the business card for business expenses. Makes your bookkeeping easier.
Deal Addict
Sep 14, 2012
1856 posts
1331 upvotes
Montreal, QC
Statistics101 wrote: Mods, move to CC forum if you think it is more appropriate....

Bits and pieces of this topic has been covered here before, but I want to have a discussion to list out the details for myself and others.

Can credit card annual fees be written off as a business expense for tax purposes?

What I have gathered is if you run a business, the credit card annual fees can be written off as an expense provided that the transactions on your credit card are related to your business activities.

My question is how stringent will the CRA be looking at this? If I decided to buy some gum at the gas station and swiped my business use credit card, am I no longer able to expense the annual fee? What if half of my transactions are related to my business?

Will the CRA consider what type of business you have before permitting this type of fees to be considered as a business expense?

I'm thinking of getting the AMEX Business Platinum Card which has a whopping $500 annual fee. I used to have a few colleagues over in the business development department that carries this card and I always wonder why they would bite the bullet on such high fees. These people earn commission income, so I'm not sure if they can expense it either, but they do use their own credit card for work purposes.
I'm not an accountant or a tax advisor (so take my comments for what its worth) but I believe that you would be able to claim it as long as it is considered a business type credit card and all charges on the card are related to business charges only.

Trying to get your consumer level annual fee credit card written off as a business expense would be problematic/dicey and you would also have to not use this credit card for any personal purchases.
[OP]
Deal Addict
Mar 6, 2014
1040 posts
209 upvotes
Toronto
Longshanks wrote: If you use the card mostly for business purchases, I say go ahead and deduct the fees as a business expense. Generally, the rule is that any expense used to earn taxable income is deductible.

If you want peace of mind, just carry a personal and business credit card with you; use the personal card for personal expenses, the business card for business expenses. Makes your bookkeeping easier.
lmcjipo wrote:
I'm not an accountant or a tax advisor (so take my comments for what its worth) but I believe that you would be able to claim it as long as it is considered a business type credit card and all charges on the card are related to business charges only.

Trying to get your consumer level annual fee credit card written off as a business expense would be problematic/dicey and you would also have to not use this credit card for any personal purchases.

Thank you both for the response.

Is it possible to turn this around and say the $500 fee I paid is for the airport lounge access and concierge services which I use as part of my business activity?

Technically if I earn reward points in a "Business credit card", can I use those reward for personal vacations? Isn't those points a part of my "business assets"?

But I think you guys are correct that if I mix personal expenses into the card, I won't be able to expense the fee. Just like a car or anything else.
Deal Guru
User avatar
Mar 23, 2008
12669 posts
9278 upvotes
Edmonton
Statistics101 wrote: Thank you both for the response.

Is it possible to turn this around and say the $500 fee I paid is for the airport lounge access and concierge services which I use as part of my business activity?

Technically if I earn reward points in a "Business credit card", can I use those reward for personal vacations? Isn't those points a part of my "business assets"?

But I think you guys are correct that if I mix personal expenses into the card, I won't be able to expense the fee. Just like a car or anything else.
You should talk to your accountant. My thought would be that if you use your rewards for personal use, then they would become a taxable benefit. If you use them for business travel, then it would be fine.

C

Top