Canada is set to adopt the International Crypto-Asset Reporting Framework (CARF) for taxation by 2026, according to a supplement to the country’s 2024 annual budget. The OECD established the framework in August 2022, aiming for implementation in 47 countries by 2027.
#Canada to begin implementing international #crypto tax reporting standard :
Canada is aiming to have the #OECD standard for crypto asset #tax reporting in place by 2027, as agreed with 46 other countries.
According to a supplement to the 2024 annual budget, Canada expects to… pic.twitter.com/oGWXFMKtfM— TOBTC (@_TOBTC) April 18, 2024
“Just as crypto-assets pose financial risks to middle-class Canadians, the rapid growth of crypto-asset markets poses significant risks of tax evasion,” the 2024 federal budget states. “Regulation and the international exchange of tax information must keep pace with tax evasion threats to ensure a fair tax system.”
Crypto asset service providers (CASPs), including exchanges and ATM operators, will need to report transactions to the Canada Revenue Agency (CRA). These include crypto-to-fiat and crypto-to-crypto transactions, as well as crypto transfers over $50,000 USD, covering payment processing activities.
CASPs are also required to collect customer information, such as name, address, date of birth, jurisdiction(s) of residence, and taxpayer identification numbers. Reporting applies to both Canadian residents and non-residents.
The budget allocates $51.6 million over five years, starting in 2024-25, and $7.3 million annually thereafter for the CRA to implement and administer these measures.
Additionally, the budget proposes raising the capital gains tax inclusion rate from 50% to 66% for annual incomes exceeding $250,000. This change affects cryptocurrency sales and has raised concerns within the Canadian crypto community, as some feel it may hinder financial opportunities and the ability to afford housing or support businesses.
