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
No problems here...
4/30/2013 2:58:37 PM
Hey I'm Canadian and to be honest I have no issues at all with paying for taxes. I've had the benefit of using free healthcare and various other benefits that being a Canadian entails. Maybe the government could use tax money more efficiently but otherwise it isn't a bad idea.
I imagine revenue Canada is concerned about the huge windfall people may have made speculating with bitcoins. After all if you suddenly magically gain thousands of dollars the government will want to tax that as income. This has always been the case. Another way to see this is if you invest money in something and you get this massive return when you convert it back into CDN, that's a profit. Granted you could theoretically hide the money under your mattress which isn't safe and if you ever got busted you'd be in trouble. (Any large unexplained purchase would flag a warning too.)
Personally if I had made thousands or even millions in bitcoins by essentially speculating. (Which means some poor saps on the other end got completely screwed over.) I think my conscience might be a little clearer giving some away as taxes which would hopefully benefit others.
As for purely bitcoin to bitcoin transactions, well the government can't track those easily. I doubt you can make a huge amount of money anyhow in legal trade unless you're in the drug trade in which case you don't want to get discovered anyhow. I doubt the CRA is concerned about actual bitcoin transactions unless they involve huge amounts.
“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads
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
Monica Lewinsky Speaks Out, Calls Herself "Patient-Zero" for Internet Cyberbullying
October 21, 2014, 2:25 PM
Google Fiber Finally Heading to Austin, Texas in December
October 16, 2014, 11:48 AM
Dropbox Flexes Security Muscle, Appears to Have Squashed Password Breach
October 15, 2014, 12:12 PM
U2’s Bono Apologizes for Forced “Songs of Innocence” Album Downloads
October 15, 2014, 7:55 AM
Google Launches "Same-day Delivery" Subscription Service for $95/year
October 14, 2014, 10:37 AM
Netflix 4K Content to Cost Subscribers Extra $3/Month
October 13, 2014, 8:01 AM
Most Popular Articles
Update: Motorola Droid Turbo Coming Oct 28, 48-hour Battery Life Confirmed
October 19, 2014, 9:19 PM
Google Announces Android 5.0 “Lollipop”, Nexus 9 Tablet, and Nexus 6 “Phablet”
October 15, 2014, 12:41 PM
Cool Science Video of the Day: Carnivorous Leech Eats Giant Jungle Worm
October 16, 2014, 6:44 PM
HBO, CBS Lead Charge to Ditch Cable
October 16, 2014, 4:40 PM
PS4 "Masamune" Update 2.0 Will Bring New Music and Customization Features
October 17, 2014, 1:05 PM
Latest Blog Posts
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
Space Terrorism is a Looming Threat For the United States
Apr 23, 2014, 7:47 PM
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information