📰 Table Of Contents
Canada’s Adoption of International Crypto-Asset Reporting Framework (CARF)
Canada is set to become one of the first nations to adopt the International Crypto-Asset Reporting Framework (CARF) for taxation by 2026. This framework was agreed upon by the Organisation for Economic Co-operation and Development (OECD) in August 2022 and is scheduled to be implemented in 47 countries by 2027.
Regulation for Crypto Tax Reporting in Canada
In a supplement to the country’s 2024 annual budget, it was revealed that Canada aims to implement the CARF framework. The 2024 federal budget highlighted the importance of regulating crypto-assets to prevent tax evasion and ensure a fair tax system.
Impact on Canada Crypto Service Providers
The CARF introduces new reporting requirements for “crypto asset service providers” (CASPs) such as crypto exchanges, brokers, and ATM operators. These providers will need to report various transactions to the Canada Revenue Agency (CRA), including crypto-to-fiat and crypto-to-crypto transactions exceeding $50,000 USD.
- Stablecoins, derivatives issued as crypto tokens, and non-fungible tokens (NFTs) are considered as examples of “crypto assets” under the CARF.
- CASPs must collect customer information like name, address, date of birth, and taxpayer identification numbers for each jurisdiction of residence.
- Transactions of both Canadian residents and non-residents will require reporting.
Financial Allocation for Implementation
The budget proposes to allocate $51.6 million over five years, starting in 2024-25, and $7.3 million per year ongoing to the Canada Revenue Agency for the implementation and administration of these initiatives.
Canada’s Capital Gains Tax Update
As part of the budget plan, there is a proposal to increase the capital gains tax inclusion rate from 50% to 66% for individuals with annual incomes exceeding $250,000. This change, applicable to cryptocurrency sales, has raised concerns within the Canadian crypto community.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
