376. Accepting Bitcoin or Crypto Payments: Accounting and Tax Tips for Businesses — CPA Firm Near You, Montreal

Introduction

More Quebec businesses — from e-commerce stores and consultants to restaurants, freelancers, and service providers — now accept cryptocurrency payments. But crypto is not treated like cash for tax purposes. CRA and Revenu Québec classify crypto payments as barter transactions, meaning businesses must record revenue differently, apply GST/QST correctly, and track the fair market value (FMV) at the time of payment. Incorrectly handling crypto payments can lead to reassessments, penalties, and lost deductions. This guide explains how businesses should account for crypto payments and how a CPA firm near you in Montreal can help ensure full compliance.

Legal and Regulatory Framework

Under the Income Tax Act and the Taxation Act of Quebec, when a business accepts cryptocurrency as payment:

1. Crypto Receipts Are Business Revenue

Revenue must be recorded at the fair market value (FMV) of the crypto at the moment it is received.
• Bitcoin payment for a $1,000 service = $1,000 income
• Even if the crypto rises or falls later, income is still based on FMV at receipt.

2. Crypto Is a Commodity

Cryptocurrency is treated as property, not cash.
• Disposing of crypto (selling or converting) triggers a capital gain or business income depending on the activity.

3. GST/QST Applies Normally

Businesses must charge GST/QST on taxable goods and services, even if crypto is used as payment.
Tax is calculated on the value of the underlying transaction — not on the crypto itself.

4. Record-Keeping Requirements

Businesses must keep:
• Wallet transaction records
• Exchange FMV screenshots
• Invoices for the underlying sale
• Time-stamped blockchain transactions
• Crypto disposal records

GST/QST input tax credits (ITCs/ITRs) may be available for crypto-related expenses if properly documented.

Key Court Decisions

Courts have applied the same principles used for barter and commodity transactions:
• Businesses must value crypto at FMV at the exact time of receipt
• Failing to track FMV results in revenue being reconstructed by CRA
• Crypto used to pay expenses must also be valued at FMV at the time of payment
• Businesses must maintain detailed transaction records
• Missing documentation leads to denied deductions or reassessments

Judges emphasize the need for timestamped evidence and accurate valuation.

Why CRA and Revenu Québec Target Crypto Payments

Crypto-payment audits are rising because many businesses:
• Fail to record FMV at time of receipt
• Treat crypto like cash rather than property
• Forget to remit GST/QST on crypto sales
• Mix business wallets with personal wallets
• Lack proof of transactions or conversion history
• Underreport gains when liquidating crypto
• Accept stablecoins or altcoins without tracking timestamps

CRA receives data from exchanges, blockchain analytics, and payment processors.

Mackisen Strategy

At Mackisen CPA Montreal, we help businesses adopt crypto safely and correctly. We:
• Set up FMV-based accounting for crypto revenue
• Implement GST/QST-compliant invoicing
• Track crypto-to-fiat conversions and gains
• Separate personal and business wallet activity
• Reconstruct missing transaction histories
• Integrate crypto payments into QuickBooks or Xero
• Prepare complete crypto income disclosures for CRA and Revenu Québec
• Build audit-ready documentation files

Real Client Experience

A Montreal e-commerce business accepted Bitcoin but recorded revenue only when converting crypto to cash. CRA reassessed income for two years. We reconstructed FMV at receipt using exchange history and blockchain timestamps, reducing penalties. Another client accepted stablecoins without tracking FMV; we rebuilt transaction logs and corrected GST/QST filings.

Common Questions

Are crypto payments taxable?

Yes. Income is based on FMV at the time crypto is received.

Do I need to charge GST/QST?

Yes. Crypto is just a payment method — taxes apply normally.

What happens when I convert crypto to cash?

You may trigger capital gains or business income, depending on activity.

Can I accept crypto without an exchange account?

Yes, but you must maintain detailed wallet records.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses accept cryptocurrency payments while maintaining tax and accounting compliance. Whether you’re a freelancer, retailer, or growing tech business, our expert team ensures precision, transparency, and audit-ready reporting.