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

[Joel Nahrgang]

Since I have not read any taxes cases on Bitcoin I decided to research over
my lunch - here is what the Canada site has -
https://www.canada.ca/en/financial-consumer-agency/services/payment/digital-currency.html

I still think you can argue that the use of bitcoin as a currency if you
are using it to collect sales and purchase goods for the business. I do not
believe anyone has tried to challenge any ruling from CRA yet.



On Fri, Oct 20, 2017 at 12:16 PM, Scott Frederick <sfrederick0 at gmail.com>
wrote:

> I believe that CRA considers Bitcoin to be a commodity, not a currency, so
> you would be subject to capital gains tax. The question now is, is that
> gain taxable annually, or only when the gain is realised.
>
> On 20 Oct 2017 6:32 AM, "Joel Nahrgang" <joelsn at gmail.com> wrote:
>
>> > Not a tax accountant by any means
>>
>> I'm not a CPA, but worked in public accounting for over 20 years,
>> including tax.
>>
>> Your thinking is on the right track but I wouldn't record it that way.
>>
>> You make a sale for $100 CDN and charge $13 CDN for hst (13%). You would
>> owe cra $13 for HST if that is all you did in the filing period. Regardless
>> of what currency it is in, you just owe $13 CDN.
>>
>> If you happen to get paid in bitcoin, using Bob's example and received 1
>> BTC, that is what would show on your balance sheet until the end of the
>> year/quarter/month when you need to adjust all currencies to reflect the
>> CDN$ value.
>>
>> If those currencies are higher than the CDN$ equivalent, then the
>> difference is recorded as income and can be taxed on it, This would just go
>> into the overall income and your expenses would reduce the income.
>>
>> On Thu, Oct 19, 2017 at 9:52 PM, Bob Jonkman <bjonkman at sobac.com> wrote:
>>
>>> -----BEGIN PGP SIGNED MESSAGE-----
>>> Hash: SHA1
>>>
>>> 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.
>>> >
>>> >
>>> >
>>> >
>>> >
>>> > _______________________________________________ kwlug-disc mailing
>>> > list kwlug-disc at kwlug.org
>>> > http://kwlug.org/mailman/listinfo/kwlug-disc_kwlug.org
>>> >
>>>
>>> - --
>>> Bob Jonkman <bjonkman at sobac.com>          Phone: +1-519-635-9413
>>> SOBAC Microcomputer Services             http://sobac.com/sobac/
>>> Software   ---   Office & Business Automation   ---   Consulting
>>> GnuPG Fngrprnt:04F7 742B 8F54 C40A E115 26C2 B912 89B0 D2CC E5EA
>>>
>>> -----BEGIN PGP SIGNATURE-----
>>> Version: GnuPG v2
>>> Comment: Ensure confidentiality, authenticity, non-repudiability
>>>
>>> iEYEARECAAYFAlnpVuAACgkQuRKJsNLM5eq3WQCfToM4QxOhxFBVdc8oJQaFetcL
>>> RFQAnjojaKEWdcTrsAK5RfhLcv2DUenQ
>>> =cRrC
>>> -----END PGP SIGNATURE-----
>>>
>>> _______________________________________________
>>> kwlug-disc mailing list
>>> kwlug-disc at kwlug.org
>>> http://kwlug.org/mailman/listinfo/kwlug-disc_kwlug.org
>>>
>>
>>
>> _______________________________________________
>> kwlug-disc mailing list
>> kwlug-disc at kwlug.org
>> http://kwlug.org/mailman/listinfo/kwlug-disc_kwlug.org
>>
>>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://kwlug.org/pipermail/kwlug-disc_kwlug.org/attachments/20171020/8560bbd4/attachment.htm>