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Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
Kickstarter Canada, Is Crowdfunding Taxable Income
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Kickstarter Canada, Is Crowdfunding Taxable Income

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Is crowdfunding taxable income? Kickstarter, indiegogo will not answer your question but we will. Crowdfunding, you are exchanging funds for a delivery of service or product in future. It is not a …

Is crowdfunding taxable income? Kickstarter, indiegogo will not answer your question but we will. Crowdfunding, you are exchanging funds for a delivery of service or product in future. It is not a donation. Its an exchange of product or service for money. Income Tax act defines these kind of transactions for businesses.

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  • 1. Crowd funding and TAX Kickstarter/Indiegogo taxsupport.ca Vancouver
  • 2. Kickstarter and Indiegogo has become a trusted source of seed money for Canadian Startups. taxsupport.ca Vancouver
  • 3. Is crowd funded money taxable business income? taxsupport.ca Vancouver
  • 4. A question is going to haunt Canadian startups and entrepreneurs going forward. taxsupport.ca Vancouver
  • 5. According to Canada Revenue Agency (CRA) crowd funded capital is ordinary business income as per Income Tax Act of Canada taxsupport.ca Vancouver
  • 6. It is like a pre sale of your service or product. taxsupport.ca Vancouver
  • 7. You collect funds (money) in advance promising a service or product in future to your customers. taxsupport.ca Vancouver
  • 8. Are your customers donating money to your project? taxsupport.ca Vancouver
  • 9. NO! They are not. They are expecting a service or product in exchange of funding your project on Kickstarter and Indiegogo. taxsupport.ca Vancouver
  • 10. Kickstarter and Indiegogo might give you the impression that you are raising capital, but in reality and as per the Income Tax Act., you are pre selling your product or service. taxsupport.ca Vancouver
  • 11. Funding from Kickstarter and Indiegogo are not Capital. These are business revenue and as such part of your taxable business income. taxsupport.ca Vancouver
  • 12. Expenses related to crowd funding and providing of service and product are part of business expense if they meet the criteria of business expense as stated in the Income Tax Act. taxsupport.ca Vancouver
  • 13. How much tax you could pay on your Crowd sourced income? taxsupport.ca Vancouver
  • 14. It depends, on your business entity. How you are sourcing the fund? taxsupport.ca Vancouver
  • 15. Are you sourcing fund as a sole proprietor, partnership or a corporation? taxsupport.ca Vancouver
  • 16. If you are a sole proprietor or partnership, you could pay a minimum of 22% to maximum of 43% of your net business income from Crowd Funding. taxsupport.ca Vancouver
  • 17. For Example, if you sourced $10,000 from crowd through Kickstarter and Indiegogo, your Business Income is $10,000 for the project as per Income Tax Act. taxsupport.ca Vancouver
  • 18. Your expenses to raise the fund and provide service or product to the crowd are $8,000. taxsupport.ca Vancouver
  • 19. Your net taxable business income from the project is $2,000 and you will pay tax 0n that amount. taxsupport.ca Vancouver
  • 20. If you are raising the fund as a corporation, your taxable income might be about 15%. taxsupport.ca Vancouver
  • 21. It is important to keep in mind the selling point for Kickstarter and Indiegogo may be donation, startup funding, crowd funding etc., but from legal definition as per Income Tax Act in Canada, it’s a pre-sale business income, in the ordinary course of business. taxsupport.ca Vancouver
  • 22. Canada Revenue Agency (CRA) has provided a detail technical interpretation of taxation of crowd funding in a technical bulletin. You can request a copy through our website. taxsupport.ca Vancouver
  • 23. It is important to consult your tax advisor before you decide to raise funds through Kickstarter, Indiegogo or any other crowd funder. taxsupport.ca Vancouver
  • 24. You can contact us, if you need expert business tax advice for your business or crowd funding projects. taxsupport.ca Vancouver
  • 25. New Edge Management Consulting, Inc. Vancouver, Canada 604-764-7864 www.taxsupport.ca taxsupport.ca Vancouver

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