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Crowdfunding and taxation for businesses in Quebec

At first, glance, if you are reading this article, it means that you have a growing business, or it is in difficulty or, moreover, you are creating a business. However, you are indeed looking for funds to finance your projects. That’s why it’s essential to know the basics of crowdfunding and taxation before you even start a campaign.

First, it is a concept based on donation, so you should know there is no crowdfunding legislation.

On the other hand, the Financial Markets Authority, also known as the FMA, is particularly interested in equity crowdfunding.

Financement participatif et la fiscalité

What is the difference between crowdfunding and equity crowdfunding?

Crowdfunding means financing a project by donation or by, rewards or presale.

On the contrary, investors finance equity crowdfunding with shares or by services offered for the company by receiving a monetary return. That is why the FMA manages this part with legislation.

Another aspect of crowdfunding and taxation is taxes.

Is the donation taxable? The answer is YES for business projects.

If you have a business and finance a project through this form, you will have to pay taxes on the donations received or the sales you have made.

Your business is not a charity!

In short, the money you receive is income. So you will pay tax.

In addition, you will have to declare the amount received and the expenses incurred for your project to the government of Quebec and Canada.

Watch the video for more information.

Financement participatif et la fiscalité

Happy reading and listening.

Guylaine Beauchemin, Crowdfunding Project Manager

P.S. – Read our article about who can do a crowdfunding campaign.

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