If you are holding any Crypto currency and you thought that no taxes would arise on your holdings when you sold them since they untracked and or underground and outside of government view, then you better be sitting down. The government can and or will be getting information on your activities as they start to go after the Crypto eco systems.
In a recent court decision (privacy issues versus the government being able to audit people's taxes), the court did a comprise being that any account over $20,000.00 in holdings since 2013 would need to be provided to the government for tax audit purposes.
So if in the past you have declared your Crypto currency trades as capital gains taxes 50% as long term holders or the day traders have included 100% as income annually then you would be fine. However, if you have not declared your income, you will need to do a Voluntary Disclosure if it's available to you and/or amend your tax returns before Canada Revenue Agency comes auditing or assessing you. Therefore, the VDP -Voluntary Disclosure Program should be done on a as soon as possible basis if you find yourself in this situation. See the items below from the National Post.
If you require any assistance in coming forward or are considering a VDP voluntary disclosure program, please feel free to contact me for assisting you with either amending your returns and/or applying and submitting under the Voluntary Disclosure rules (and they have lots of rules under this program).
From a recent National Post article by Christopher Nardi
One of Canada’s biggest cryptocurrency trading platforms has to fork over the identity and transaction data for tens of thousands of its clients to the Canada Revenue Agency.
In a ruling last week, a Federal Court judge ordered Toronto-based Coinsquare to provide the tax agency with a significant trove of information about all its clients who had deposited or at any point held a total of at least $20,000 in an account since Jan. 1, 2013.
In addition, the cryptocurrency exchange has to provide specific details about its 16,500 top active users, both in terms of number of transactions and total earnings, between 2014 and 2020.
The information the company must provide to CRA includes a list of all active or inactive customer accounts that meet the above criteria, as well as a detailed listing of all their transfers and trading activity (going as far as requiring the date, time, amount and fees paid on each transaction) and deposit addresses.
Coinsquare is a crypto marketplace that allows users to buy and sell (or “trade”) a range of digital currencies such as Bitcoin or Ethereum.
The CRA had originally requested to receive all information about every single Coinsquare client in the past seven years.
Date: March 25, 2021
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