Canada Seeks to Apply International Tax Framework to Cryptocurrency

Canada is expected to become one of the first countries to implement the International Cryptocurrency Asset Reporting Framework (CARF) in 2026.

Azcnews Breaking

Tax Reporting in Canada

Canada is set to become one of the first countries to adopt the International Cryptocurrency Asset Reporting Framework (CARF) in 2026, as outlined in an addition to its annual budget for 2024, according to a report by the National Post on April 16th.

The Organization for Economic Co-operation and Development (OECD) reached a consensus on this framework in August 2022 and is expected to be implemented in 47 countries by 2027, as committed in November 2023.

The federal budget states:

Just like cryptocurrencies pose financial risks to Canada’s middle-class citizens, the rapid growth of the cryptocurrency asset market poses significant tax evasion risks. “International tax information exchange regulations must keep pace with tax evasion threats to ensure a fair tax system.”

Impact on Cryptocurrency Service Providers in Canada

CARF imposes new reporting requirements on “cryptocurrency asset service providers” (CASPs) including cryptocurrency exchanges, brokers, and ATM operators.

Stablecoins, issued as cryptocurrency tokens, and NFTs are provided as examples of “cryptocurrency assets.”

Canada

Cryptocurrency asset service providers (CASPs), such as exchanges and ATM operators, will have to report various transactions to the CRA. This includes cryptocurrency-to-fiat and cryptocurrency-to-cryptocurrency transactions as well as any cryptocurrency transfers exceeding $50,000, including payment processing activities.

CASPs also have to collect information about their customers, including “name, address, date of birth, country of residence, and tax identification number for each country of residence.”

Transactions of both residents and non-residents of Canada need to be reported.

“The 2024 budget proposes to provide $51.6 million over 5 years, starting in 2024-25, and $7.3 million annually to the Canada Revenue Agency to implement and manage these initiatives,” the budget states.

Related: HSBC Joins the Race in the Crypto Sector

Proposed Increase in Canada’s Capital Gains Tax

The budget plan also includes a proposal to increase the capital gains tax rate from 50% to 66% for annual income exceeding $250,000. This change, applied to cryptocurrency sales, has raised concerns within the Canadian cryptocurrency community.

“Anyone trying to escape runaway money printing with Bitcoin just got played harder,” @Crypto_Mags tweeted on Tuesday, referring to the tax increase. “It’s now going to be harder to finally buy a house or support your business.”

4.9/5

(8 votes)
  1. Avatar of
    Anonymous

    This What we want see in Nigeria not banning

  2. Avatar of Adeyemi Samuel
    Adeyemi Samuel

    Nice one

  3. Avatar of
    Anonymous

    Hi my name is Aliyu Ashahabu naiya I came form Nigeria

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