Can You Write Off a Rolex Watch as a Business Expense?

General Rule: No, You Can’t Deduct a Rolex

A Rolex watch is considered a luxury personal item. Generally, the Canada Revenue Agency (CRA) does not allow it as a business expense. Wearing it to meetings or believing it enhances your professional image does not make it deductible.

Are There Any Exceptions?

While most Rolex purchases won’t qualify, there are rare cases where it might be deductible:

• Jewelry Store Inventory – If you own a jewelry store and a Rolex is part of your inventory, it could be considered a business asset.
• Promotional Giveaway – If your business gives away a Rolex as a prize, it could qualify as a marketing expense. For example, giving away a car as a prize for hitting a hole-in-one in a golf tournament has been considered a legitimate promotional expense.

But just buying a Rolex and claiming it as a business expense? It’s 99% likely not deductible.

The CRA’s Stance on Personal vs. Business Expenses

This isn’t the first time a taxpayer has tried to claim a personal expense as a business deduction.

For instance, in Fluet v. Minister of National Revenue (1978), a bank manager tried to deduct the cost of a guard dog after police recommended he get one for personal security. The court ruled against him, stating that personal security is not a deductible business expense. A Rolex falls under the same logic—it’s a personal purchase, even if you argue it benefits your business image.

Court Cases on Rolex and Taxation

Mindszenthy v R, 1993

In Mindszenthy v R, 1993 CarswellNat 1059 (TCC), a Rolex watch was included in the taxpayer’s employment income under paragraph 6(1)(a). The key question was whether the watch was a gift from the president of the employer as a personal friend or in his capacity as an employee.

At the time, the employee was unaware that the employer company had paid for the watch and deducted the cost. The court ultimately ruled that the value of the watch was taxable employment income, reinforcing the CRA’s broad interpretation of employment benefits under paragraph 6(1)(a).

The judge acknowledged the unfairness of the situation:

“Had he known that it carried a tax burden, he might have refused to accept it. Instead of being a clear benefit, it gave rise to a liability and, as an economic matter, it forced him to pay in taxes a great deal more than he would have paid for a watch in the first place.”

This case highlights that even if an employer provides a Rolex, it may be considered taxable employment income rather than a business expense.

Taxpayer’s Rolex Theft Claim Denied (1983)

A taxpayer employed as an industrial appraiser attempted to deduct the loss of a Rolex watch stolen from him, alongside automobile and office expenses (Income Tax Act, RSC 1952, c 148). The Minister disallowed the expenses, and the court agreed:

• The Rolex watch was deemed a personal asset, making the capital loss non-deductible.
• The taxpayer also failed to prove that his home office expenses were required under his employment contract.
• His automobile expenses were already reimbursed, so he could not claim them again.

This case reaffirms that personal-use items like a Rolex are not deductible, even if lost or stolen.

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References and sources:

Official Rolex Website - Swiss Luxury Watches

Final Thoughts

If you’re buying a Rolex, buy it because you want it—not because you think it’s a tax write-off. If you’re unsure whether something is deductible, talk to a CPA, not someone on Instagram.

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This is not legally binding tax advice. This is educational analysis. Say hello if you need help.

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