Canada to Bitcoin Miners: "Pay Yer Taxes"
April 29, 2013 10:52 AM
comment(s) - last by
Cryptocurrency is not exempt from taxation, Canadian government argues
For miners or traders who
, 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 to around $250 USD/Bitcoin in April, 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 g
overnment'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.
The CRA will be hunting for Bitcoin tax dodgers for the first time.
[Sources: Bitcoin Forum (left); Nerd Merit Badges (right)]
Some Canadians are already claiming Bitcoin income on their taxes. Comments Regina currency trader Jeff Cliff in a
interview, "It's fairly anonymous system. I'm not so much into the privacy side of it, so that's why I claim it."
Others feel the government should keep their hands off Bitcoins. But Canadians who think the CRA is treating Bitcoin earnings or barter as an "honor system" may be in for a rude surprise. The CRA told the
that it will be watching for unreported Bitcoin revenue this year.
The CRA will reportedly crack down on unreported Bitcoin revenue. [Image Source: The CP]
Saskatoon realtor Paul Chavady who has taken the unusual step of allowing buyers to use Bitcoins, explains how this could work, commenting, "When you sell [the BitCoins], they will deposit that in your account. As soon as it turns into Canadian dollars, it's back in the eyes of the CRA and everybody else. If you get a big deposit of $10,000, or $100,000, [CRA is] going to say, 'Hey, where did that come from?'"
In other words don't count on cryptography to protect you if you cash out your Bitcoin wealth for real world purchases; the (Canadian) tax man knows better.
This article is over a month old, voting and posting comments is disabled
4/29/2013 6:52:11 PM
Nothing funny about it. Paying taxes is not analogous to paying money to a street gang.
Not to mention, since when does anyone hand over tax money "with hardly a grumble"? Taxes are one of the things most grumbled about by everyone everywhere.
"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997
Bitcoin Rollercoaster Ride Sees Currency Soaring to New High of $32/Coin
February 28, 2013, 3:39 PM
Cracking the Bitcoin: Digging Into a $131M USD Virtual Currency
June 12, 2011, 7:35 PM
Digital Black Friday: First Bitcoin "Depression" Hits
June 10, 2011, 7:05 PM
Amazon's Kindle Fire HDX 8.9 Drops to $299 (30 Percent Off) for a Day
December 22, 2014, 10:57 AM
Mississippi AG Drops Anti-Google Subpoena After Dirty MPAA Ties Are Revealed
December 22, 2014, 9:51 AM
Paramount Bans Team America Screenings, Cowers Submissively to North Korea
December 18, 2014, 10:26 PM
News Corp's Fox is Terrified of North Korea, Kills Upcoming Steve Carell Film
December 18, 2014, 4:09 PM
NPD: Online Shopping is up in 2014, But Brick & Mortar Retail is Booming Too
December 12, 2014, 9:09 AM
Amazon Joins 4K Arms Race, With Free 4K Streaming for Prime Members
December 10, 2014, 10:49 AM
Most Popular Articles
Miyamoto: Nintendo is Prepping Successor to Troubled Wii U
December 22, 2014, 6:28 PM
Microsoft, Google Back The Interview, North Korea Vows Attacks on America
December 24, 2014, 4:25 PM
Nokia's Sweet $250 Android Lollipop N1 Tablet is Rumored for Jan. 7 China Launch
December 24, 2014, 1:45 PM
Quick Note: Drone Loses Fight to the Death With Kangaroo
December 23, 2014, 3:28 PM
Airbus A350 XWB Passenger Jet Takes Off, First Unit Delivered to Qatar Airlines
December 22, 2014, 1:22 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information