Tax Considerations for Food Trucks and Catering Businesses: Mobile Business Challenges and Write-Offs — CPA Firm Near You, Montreal

Introduction

Food trucks and catering companies face unique tax and compliance challenges compared with traditional restaurants. Mobile operations involve fluctuating locations, multiple revenue streams, travel-related expenses, special permits, equipment depreciation, and complex GST/HST and QST reporting. Without proper accounting systems, food truck and catering owners risk losing valuable deductions or triggering audits due to inconsistent record-keeping. This guide explains the key tax rules that apply to mobile food businesses and how a CPA firm near you in Montreal can help you stay organized, compliant, and profitable.

Legal and Regulatory Framework

Under the Income Tax Act and Quebec’s Taxation Act, food trucks and catering businesses must report all business income, track expenses accurately, and maintain detailed records of supplies, fuel, permits, and equipment. GST/HST and QST apply to most prepared meals sold through mobile operations, whether at events, festivals, private catering, or street locations. Mobile businesses must also register for and charge sales tax once they exceed the annual small supplier threshold. Large equipment such as grills, generators, refrigeration units, and kitchen installations may qualify for Capital Cost Allowance under Class 8 or other applicable CCA classes. Revenu Québec requires mobile operators to maintain organized invoices, sales summaries, and location-based records to support tax filings.

Key Court Decisions

Courts have ruled that mobile food businesses must maintain the same level of documentation as fixed-location restaurants. In several cases, catering companies lost deductions because they failed to track ingredient purchases or document event-specific revenues. Other rulings emphasize that vehicle-related expenses must be supported by mileage logs and must relate strictly to commercial activity. Judges have also denied large equipment deductions where taxpayers failed to classify assets correctly or lacked documentation of installation and use. Proper record-keeping remains essential for mobile operations.

Why CRA and Revenu Québec Target Food Trucks and Catering

Food trucks often handle large amounts of cash or mixed electronic payments, creating a high-risk environment for under-reported income. Auditors compare ingredient purchases with expected production yields to detect inconsistencies. Catering companies face scrutiny if invoices, deposits, final payments, and event details are not clearly documented. Unreported tips, missing GST/QST entries, and incorrect capital versus expense classifications raise immediate red flags. Mobile businesses without structured record-keeping systems frequently face reassessments.

Mackisen Strategy

At Mackisen CPA Montreal, we help food truck and catering owners build a complete tax and accounting system tailored to mobile operations. We set up digital bookkeeping workflows, track ingredient purchases by event or location, categorize equipment for proper CCA treatment, and implement GST/HST and QST compliance procedures. Our team also helps clients maximize deductions for fuel, vehicle modifications, commissary kitchen rentals, street permits, and equipment repairs. If CRA or Revenu Québec opens an audit, we prepare your documentation, defend your calculations, and negotiate to minimize reassessments and penalties.

Real Client Experience

A Montreal food truck struggled with inconsistent cash sales reporting and incomplete supplier records. CRA initiated an audit using purchase-based reconstruction methods. We reorganized their entire bookkeeping system, reconciled supplier invoices, structured CCA for mobile equipment, and provided a clear audit trail. This significantly reduced the reassessment and gave the client a long-term compliance system that improved profitability and tax efficiency.

Common Questions

Are food truck sales taxable under GST/HST and QST?

Yes. Prepared meals sold through mobile operations are generally taxable, regardless of location or event type.

Can vehicle and fuel expenses be deducted?

Yes, if properly documented with mileage logs, fuel receipts, and proof of business use.

How do I handle catering deposits and final payments?

Both must be recorded as taxable revenue, and GST/QST must be remitted on the full amount.

Do food trucks qualify for Capital Cost Allowance?

Yes. Equipment such as grills, refrigeration units, generators, and mobile kitchen installations typically fall under Class 8.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses stay compliant while recovering the taxes they’re entitled to. Whether you’re filing your first GST/QST return or optimizing multi-year refunds, our expert team ensures precision, transparency, and protection from audit risk.