What's Next in Crypto-Tax?
What's Next in Crypto-Tax?
Part 4 of the Smartblock Law "Crypto-Tax Primer" Blog Series
Chetan Phull · Feb 23, 2018
This blog post is part of our “Crypto-Tax Primer” series, which is comprised of the following parts:
The CRA has deferred to other government departments to determine when, or how, the consideration of cryptocurrency should change from a commodity to a currency (see June 5, 2014 Proceedings of the Standing Senate Committee on Banking, Trade and Commerce).
Meanwhile, the Standing Senate Committee on Banking, Trade and Commerce (the “Committee”) has recommended that:
The federal government, through the Canada Revenue Agency, provide concise information to Canadians about the tax obligations of digital currencies when received as income, held as an investment, or used to purchase goods or services.
(See Standing Senate Committee on Banking, Trade and Commerce, “Digital Currency: You Can’t Flip This Coin!” [June 2015] at 17 [“Committee’s 2015 Report”].)
This recommendation includes consideration of whether foreign currency tax rules should apply to cryptocurrencies (see the Committee’s 2015 Report at 16).
A review of the Committee’s 2015 Report is due later this year, according to the Committee’s own recommendation (see the Committee’s 2015 Report, Recommendation #8 at 17).
We look forward to considering the next Committee report, and would welcome an update from the Federal Government/CRA on draft legislation dealing with cryptocurrency tax mechanisms.
In the meantime, we will continue to monitor the legal status of cryptocurrencies as considered by other government entities, including the Bank of Canada and the Department of Finance.
If you require an opinion on the application of Canadian tax laws to cryptocurrency, we invite you to consider our service offering, "Crypto trading and related tax issues".
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