My business is small, I sell things on social media. I'm thinking about opening a business credit card to buy inventory. Are expenses I charge to that card tax-deductible the same way as cash purchases? Do I need invoices for everything?
Expenses charged to a company credit card are deducted the same way as cash expenses, but you need to keep receipts for ALL expenses without exception - that's what the DIAN (or your local tax authority) requires to let you deduct them. Without proof, no matter how much you paid with the card, you can't prove the expense to an auditor and they can reject the deduction.
Deductibility works the same way with a card as it does with cash, that's clear, but there's one thing people sometimes overlook: invoices aren't just an administrative requirement, they're your safe passage if the tax authorities audit you. Without invoices, technically those expenses don't exist fiscally, even if you actually paid for them.
The important thing is that the invoice is in your company's name, not your personal name. If you buy inventory and the invoice comes out under your ID, you'll have to justify later why a personal expense shows up in your business accounts. Also, keep everything well organized: the receipts, the card statements, the digital invoices. When you set up that business card, check with your tax advisor or accountant whether you need any special registration. In some places there are additional requirements for business cards, it depends on where you are.
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