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The Federal Government of Canada considers barter a viable form of commerce, which means belonging to a barter exchange is a legal way of doing business.
For more information about Revenue Canada and Barter, please refer to IT-490
Barter Transactions.
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KEY FACTS:
- The Canadian and United States Government passed the Barter Income Tax Act in 1982, which recognized barter exchanges as third-party record keepers - a status similar to banks and accountants.
- Barter income is treated the same as cash.
- $1 Trade Dollar is EQUAL to $1 Canadian Dollar.
- Business related expenses purchased on barter are tax deductible.
- Personal expenses purchased on barter are NOT tax deductible.
- Barter is NOT a way of getting around paying taxes.
"Since the value of one trade dollar is equal to one Canadian dollar, there should be no need to have separate revenue and expense accounts, or any accounts, for that matter, that distinguish between the portion of any transactions that are completed through the use of trade dollars instead of cash."
* Source: CA Magazine, published by the Canadian Institute of Chartered Accountant, Toronto,Canada
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