Hi Cockerel:
Happy New Year to you and others here! Your question prompted me to Google "calgary barter" and I found two companies here that are in the business of providing barter services whereby you can input goods or services or buy them without using cash. I assume that the company takes a commission of some kind - I didn't read all of their information. Here are a few answers listed under their "FAQ" heading that will give you some insight into the tax treatment you could expect here in Canada. It appears to me that SabreTEC is trying to answer the tax question without being seen to give anyone tax advice. It appears that they keep detailed records that could be examined by Revenue Canada at its discretion. For those out of the country GST refers to a federal goods and services tax that is designed to capture tax on all transactions taking place in the country. The method of applying it is quite complex and keeps many swivel servants gainfully employed. Here are the quotes:
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What does Revenue Canada think about Barter?
Revenue Canada accepts barter as a legitimate method of payment. Revenue Canada recognizes SabreTEC as a third party record keeper for barter transactions. Revenue Canada requires that all barter transactions be reported on your business returns. SabreTEC will issue monthly statements to reflect these transactions. For accounting purposes, barter income should be treated like cash.
What about G.S.T.?
G.S.T. on all transactions is paid by the buyer in trade dollars. The seller will provide their G.S.T. number so that a tax-input credit can be claimed in the same manner as cash transactions.
Can I pay my employees with barter?
Employees welcome SabreTEC. SabreTEC is commonly used for bonuses and incentives.
An agency like SabreTEC would appear to be the simplest way for someone wanting to barter to find a counterparty with a product or service that that someone would want to have in return. I would assume that there are lots of bartering relationships that work "underground" where the two parties have an ongoing relationship and one attraction to it is the ability to evade tax.
