Canada to Implement International Crypto-Asset Reporting Framework (CARF) for Taxation by 2026
Canada is preparing to join the ranks of nations adopting the International Crypto-Asset Reporting Framework (CARF) for taxation, marking a significant development outlined in a supplement to the country’s 2024 annual budget, as reported by the National Post on April 16.
The decision comes following the Organisation for Economic Co-operation and Development (OECD)’s approval of the framework in August 2022, with plans for implementation in 47 countries by 2027, as committed in November 2023.
The 2024 federal budget underscores the need to regulate crypto-assets effectively, citing concerns over their potential financial risks and the looming threat of tax evasion.
#Canada to begin implementing international #crypto tax reporting standard :
— TOBTC (@_TOBTC) April 18, 2024
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
Under the CARF, “crypto asset service providers” (CASPs) such as crypto exchanges, brokers, and ATM operators will face new reporting obligations. Stablecoins, tokenized derivatives, and non-fungible tokens (NFTs) are among the assets covered under this framework.
CASPs will be required to report various transactions to the Canada Revenue Agency (CRA), including crypto-to-fiat, crypto-to-crypto transactions, and crypto transfers exceeding $50,000 USD. These requirements extend to encompass payment processing activities.
Moreover, CASPs must collect customer information, including name, address, date of birth, jurisdiction(s) of residence, and taxpayer identification numbers.
These reporting requirements apply to transactions involving both Canadian residents and non-residents.
The federal budget allocates significant funding to support the implementation and administration of these initiatives by the CRA, underscoring the government’s commitment to ensuring compliance within the crypto sector.
Trudeau has made living in Canada unaffordable & anyone trying to opt out of rampant money printing with Bitcoin just got screwed over: now it's harder to finally afford a house or support one's business. It's not a tax problem, it's a reckless spending problem #TrudeauMustGo pic.twitter.com/mfZeNr0W54
— MAGS 🔑⛏️🚒 (@Crypto_Mags) April 16, 2024
In addition to the CARF implementation, the budget proposes increasing the capital gains tax inclusion rate from 50% to 66% for individuals with annual incomes exceeding $250,000.
This change has sparked concerns within the Canadian crypto community about its impact on individuals seeking alternatives to inflationary pressures and achieving financial goals.
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