Are you Serious? Canada to Bitcoin Miners: “Pay Yer Taxes”
Cryptocurrency is not exempt from taxation, Canadian government argues
For miners or traders who ride the volatile market for the cryptocurrency Bitcoins, the digital money can be a lucrative source of real-world income. Bitcoins in theory are unregulated by any government entity and difficult to trace. But the Canadian government is looking to change that.
With Bitcoin cash value increasing five-fold, the Canada Revenue Agency is salivating at the prospect of extra taxes from its domestic miners/traders. The CRA says that when using Bitcoins for transactions Barter Transaction rules — long an offline-focused rulebook — are in effect. These rules mandate taxes on bartered goods, and Bitcoins are no exception. The government’s rules state that the value of what is received is used to determine the value of what’s given up.
Paragraphs nine through 32 of the CRA’s section IT-479R, Transactions in Securities, explain that Bitcoins sold for real world money are either counted as income or capital gains.
Some Canadians are already claiming Bitcoin income on their taxes. Comments Regina currency trader Jeff Cliff in a CBC interview, “It’s fairly anonymous system. I’m not so much into the privacy side of it, so that’s why I claim it.”