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Crowdfunding and taxes

A priori, crowdfunding and taxes are two elements that go together in a campaign for a company.

In Quebec or for the rest of Canada, you must declare your income from your campaign. Since the rewards, you offer to the public become taxable.

In particular, the donations you receive to carry out your project also become taxable income.

So, it would be best if you always calculated a crowdfunding campaign with a higher goal than the project itself. Otherwise, your campaign will be in the red zone.

You also have to think about all the other campaign costs you have to pay.

Have you thought about it?Financement participatif et les impôts

What are the fees to pay

Let’s list the fees together. There are in particular:

  • Services
  • Transaction
  • Campaign deposit
  • Membership

Indeed, you do not have to pay all these costs simultaneously. However, you must check administration fees on the platform before choosing it. 

So crowdfunding and taxes aren’t the only costs to think about it.

What do these fees mean?

  • Service fees: This is simply the commission or administration fee to be paid to the platform.
  • The transaction fee: The payment provider’s fee, such as PayPal or Stripe.
  • Deposit fees: Some outlets will charge this fee to use their platform.
  • Membership fees:  Artists or creators’ platform charges a fee.

In other words, you will also have additional costs to your campaign, including budgets to consider:

  • Promote your campaign.
  • Campaign team that will help you prepare this one.
  • Create a business plan. Some platforms will ask you for it.

Crowdfunding and taxes

Before submitting a project on a platform, carefully calculate all the costs related to your campaign. Dream Makers is a platform that offers you the tools to perform these calculations.

Finally, watch the video below on crowdfunding and taxes, which are not the only costs to cover and could put your campaign to failure if you haven’t thought about it.

financement participatif et les impôts

Happy reading and listening!

Guylaine Beauchemin – Crowdfunding project manager

P.S. – If you liked this blog post, I invite you to read our blog post, which talks about the three main factors in crowdfunding for business.

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