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# The Golf Course Myth:
What a “Write-Off” Actually Is
- URL: https://www.thetaxgazebo.ca/articles/the-golf-course-myth-what-a-write-off-actually-is/
- Published: 2026-09-26T13:13:32.000Z
- Updated: 2026-09-26T13:13:32.000Z
- Author: Emily Mantle
- Tags: Compliance & the CRA

You have built the corporate bucket.  
If you own the company with someone else, you have signed the prenup.  
You have chosen which faucet to turn to pay yourself.

And now a thought occurs:

“Why should I take money out personally and pay tax on it? Can’t the company just buy the things I want instead?”

Welcome to a familiar piece of tax advice shared at backyard barbecues, networking events and golf courses across Canada:

“Just run it through the business. It’s a write-off.”

People say “write-off” like it is a magic spell. As though the government picks up the bill and the purchase somehow becomes free.

Let’s look at what actually happens.

## What a Write-Off Actually Is

A tax deduction reduces the income on which tax is calculated. The resulting tax saving depends on the amount you can deduct and the tax rate that applies.

Suppose your corporation spends $1,000 on deductible business advertising. Assume the deduction reduces income taxed at 11%.

In Ontario, the combined federal and provincial small business corporate tax rate on qualifying active business income is 11.2%, effective July 1, 2026\. Taxation years that straddle that date use a prorated rate. We will use a rounded 11% rate for illustration and leave GST/HST out of the calculations throughout this article.

Here is the math:

- The corporation spends **$1,000**.
- The deduction saves **$110** in income tax.
- The corporation’s after-tax cost is **$890**.

That advertising might be an excellent investment. If it attracts customers and helps grow the business, the $890 after-tax cost may be money well spent.

But if the only reason for buying it was to get a deduction, the corporation has spent $890 after tax to obtain something it otherwise would not have purchased.

The deduction makes the expense less costly. You still need to decide whether the expense is worthwhile.

## Three Completely Different Questions

Business owners often ask me: “Can I put this through the company?”

That sentence can mean three different things.

### 1\. Can the corporation physically pay for it?

Usually, yes. A corporate credit card will work at a restaurant, a resort or a golf course. A successful payment tells us very little about its tax treatment.

### 2\. Can the corporation deduct it?

Now we need to examine the expense.

- Was it incurred to earn business income?
- Is the amount reasonable?
- Is there a personal component?
- Does a specific tax rule restrict the deduction?
- Is it a current expense, or a capital purchase subject to different deduction rules?

An expense being business-related does not settle all of those questions.

### 3\. Does the payment create a taxable benefit to you personally?

If the corporation pays a personal expense for you in your capacity as a shareholder, a taxable shareholder benefit may arise. That requires its own analysis.

These are separate questions, and each needs an answer.

> The fact that the Visa transaction cleared does not mean the Income Tax Act approved it.

## Which Brings Us to the Golf Course

“But the client was there. We talked business for four hours.”

That may be entirely true. Relationships develop on golf courses, and a round with a client may serve a real business purpose.

The difficulty is that the Income Tax Act specifically prohibits deductions for certain recreational expenses. For an ordinary business entertaining clients, golf green fees are not deductible. The same restriction applies to membership fees and dues for clubs whose main purpose is providing dining, recreational or sporting facilities.

Calling the golf foursome a “strategy meeting” does not change that result.

This is why golf is such a useful example: a legitimate business purpose does not automatically produce a tax deduction.

There is another distinction here. The deduction being denied does not, by itself, mean the shareholder received a taxable personal benefit. We still need to consider whether a benefit was conferred on them in their capacity as a shareholder.

Deductibility and shareholder benefits are separate analyses.

## The Steak Dinner Is Not Free Either

Now suppose you take a client to a restaurant and spend $300 on a reasonable business dinner.

Subject to specific exceptions, the general rule limits the deduction for meals and entertainment to 50% of the lesser of the actual cost and a reasonable amount.

Using the same illustrative 11% tax rate:

- The dinner costs **$300**.
- The 50% rule means **$150** is deductible.
- That deduction saves **$16.50** in income tax.
- The corporation’s after-tax cost is **$283.50**.

**A 50% deduction is very different from a 50% refund.**

The dinner may still be worthwhile. You might have strengthened a client relationship or discussed an important project. But the corporation has still paid $283.50 after tax for the evening.

## The Bucket Was Supposed to Build Wealth

The temptation is understandable. Once money is sitting in the corporate bank account, spending it can feel different from spending money in your personal account.

And once you start looking for deductions, it becomes easy to work backwards from something you already want.

The vehicle. The trip. The cottage that could host a retreat someday.

You find yourself asking, “Can I deduct this?” before asking whether the purchase makes sense.

I would start with a different question:

**“Knowing the full after-tax cost, is this a good use of the company’s money?”**

Sometimes the answer is yes. Investing in equipment, people or client relationships can be sensible. Some business spending is worthwhile even when the tax rules deny a deduction.

Sometimes the answer is that you simply want something personally. That is a perfectly ordinary reason to buy something. It does not establish a business purpose for the corporation.

In our earlier Tax Gazebo articles, the bucket gave us a way to think about retaining surplus income in a corporation. That capital could help fund growth, build reserves and create more choices for the future.

Before spending that capital, be clear about what the business is getting in return. The tax saving should be part of the calculation, and the expected value of the purchase should justify the remaining cost.

## When a Bad Write-Off Gets Worse

An unnecessary business expense can be costly. Trying to claim a personal expense as a business deduction can create a more serious problem.

If the corporation pays for your personal consumption because you are a shareholder, the result may include both a denied corporate deduction and a taxable shareholder benefit on your personal return.

Simply adding the expense back when calculating the corporation’s taxable income does not necessarily resolve the personal tax issue.

Depending on the circumstances, interest and penalties may also apply.

This is why I would want to understand what the corporation is paying for, who benefits and how the transaction should be treated before the money is spent.

## Your Corporation Is Not Your Personal Piggy Bank

You may own all the shares, make every decision and have earned every dollar in the corporate bank account.

The corporation is still a separate legal entity. Moving value from the company to you personally can have tax consequences that need to be considered.

Once that becomes clear, another idea often follows:

“Fine. What if I just borrow the money?”

The corporation advances you $80,000\. You buy the boat. The amount goes into your shareholder-loan account, and you plan to deal with it later.

Recording an amount as a loan does not, by itself, keep it off your personal tax return. Depending on the circumstances and available exceptions, Canada’s shareholder-loan rules can require the borrowed amount to be included in your income.

The dollar leaves the bucket. Sometimes it comes back on your tax return.

**Next in Tax Gazebo: The Boomerang Dollar.**