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- Crypto traders in Canada will have to disclose their gains from such transactions
- To identify violators of the country’s tax legislation, the Canadian tax authority secured a federal court order against Coinsquare
- The section’s audit covers a period from January 1, 2013, to March 19, 2021
- The audit information to determine whether the crypto trader has filed the required documentation
Crypto is indeed getting more mainstream nowadays. Following the scenario, the governments globally are bringing stringent rules. Moreover, such authorities are also asking the traders to disclose their gains. Simultaneously, Canada Revenue Agency (CRA) also targets cryptocurrency traders who are yet to disclose their gains from such transactions. This appears as part of a large-scale audit enforced by the authorities’ digital assets section. Notably, the Canadian crackdown was indicated by the head of tax litigation at Rogerson Law Group, a Toronto-based law firm.
CRA requires Coinsquare to disclose user data
Norman MacDonald, the head of tax litigation at Rogerson Law Group, has gestured a crackdown. It is known that to identify violators of the country’s tax legislation, the Canadian tax authority secured a federal court order against Coinsquare, a crypto assets exchange. Indeed, CRA requires the platform to provide the names and details of its users. Moreover, the agency wants information on both active and inactive clients of the firm.
CRA can audit crypto traders at any time
According to the litigator, the section’s audit covers a period from January 1, 2013, to March 19, 2021. Coinsquare will have to provide any customer information ahead of the period.
Notably, MacDonald also clarified that it doesn’t mean the crypto traders aren’t required to disclose gains before the period. It’s just that the exchange is not required to disclose the customer information before January 1, 2013.
It is also worth noting that as there is no time limit for the Canadian tax agency, it can assess someone for failing to report at any time.
Why is the audit required?
According to MacDonald, the CRA will be using the audit information to determine whether the crypto trader has filed the required documentation. Such filings include necessary income tax returns, payroll remittances, and GST/HST returns.
Since the CRA’s Cryptocurrency Section’s ongoing project, MacDonald anticipates that the authority will seek similar orders against other digital assets exchanges in the future.
eBay was once a similar target of CRA
According to MacDonald, several years ago, the Canadian tax agency performed a similar audit against eBay. At the time, CRA targeted all eBay’s high-revenue power sellers. Then also, the agency was able to secure a federal court order that obliged the eCommerce firm to disclose its client records to the agency.
