[kwlug-disc] Accepting bitcoin (and other cryptos) as a Canadian business

[Bob Jonkman]

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Remi Gauvin wrote:
> Not a tax accountant by any means

Me neither.

> If I traded $100 worth of my service for 1 BTC, then 2 months
> later,
traded that 1 BTC for $150 cash (or equivalent goods/service), my
total taxable income would be $150

This needs a tax accountant.  When I generate an invoice for services
rendered I charge HST (13%) at the time of invoicing.  So if I perform
a service for 1 BTC then I would charge 1 BTC + .13 BTC HST = 1.13
BTC.  CRA gets whatever that .13 BTC is worth at the time the services
are billed. The .13 BTC are not mine, and I can't spend it or invest it.

If two months down the road my 1 BTC has increased in value 1.5x then
that's a capital gains, just like any other investment. The .5 BTC
would be taxed at whatever the capital gains is.

- --Bob.



On 2017-10-19 05:58 PM, Remi Gauvin wrote:
> On 17-10-19 04:37 PM, Andrew Stevanus (KWLUG) wrote:
>> The recent mention of the Humble Cryptocurrency Bundle and the
>> ensuing discussion reminded me of something that I've been
>> wondering about for a while. How would one go about accepting
>> bitcoin and other cryptocurrencies as a Canadian business?
>> Obviously, you'd still have to pay income tax, so would you
>> calculate the equivalent amount in CAD when you received a
>> payment and just use that? What exchange would you get the price
>> from? Does it matter? Do you use the price when the invoice is 
>> generated, when the customer sends the payment, or when it is
>> actually confirmed on the blockchain? Are there any additional
>> rules that would apply when accepting cryptocurrency versus CAD?
>> 
> 
> Not a tax accountant by any means, but if you'll allow to play one
> for a bit.
> 
> I don't really think it matters a great deal how you convert value
> at the time you receive the coins, (so long as it's consistent and 
> reasonable.  Basically, it would be the same as barter.).  However,
> that value would then further be converted to gain/loss when you
> dispose of said coins.
> 
> ie.  If I traded $100 worth of my service for 1 BTC, then 2 months 
> later, traded that 1 BTC for $150 cash (or equivalent
> goods/service), my total taxable income would be $150.
> 
> 
> 
> 
> 
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> 

- -- 
Bob Jonkman <bjonkman at sobac.com>          Phone: +1-519-635-9413
SOBAC Microcomputer Services             http://sobac.com/sobac/
Software   ---   Office & Business Automation   ---   Consulting
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