The Canadian government and other governments and regulators have taken a keen interest in cryptocurrency. The Federal government has recently put out some more material on crypto that is general for taxpayers and not specific for non-profits and charities.
We have discussed crypto in our article Accepting cryptocurrency for donations or payments can be quite risky for Canadian charities unless you know what you are doing. In general, in Canada, it is better for a donor who has crypto that has appreciated in value to sell the crypto and donate cash. That is much easier for the charity, with a much lower likelihood of the charity being audited and a lower likelihood of the donor being audited. Unlike in the US, at the moment there are no special tax benefits for donating crypto in specie to charities.
Here is the note I received:
Crypto-asset and platform economy information is now available in multiple languages
The Canada Revenue Agency (CRA) is proud to share that information on crypto-assets and the platform economy is now available in four non-official languages. These languages were chosen based on a variety of sources and aim to help newcomers understand their tax obligations in Canada as well as to support them in filing their income tax and benefit return.
If you or someone you know reads Punjabi, Spanish, Simplified Chinese, or Arabic, you can now both learn in your preferred language!
What’s new
The following tax tips on crypto-assets and the platform economy have been translated:
- Reporting your crypto-asset income as an individual carrying on a business
- Reporting your capital gains (or losses) as a crypto-asset user
- How earning from online platforms can impact your taxes
- The top 10 tips for your platform economy tax obligations
What are crypto-assets
Crypto-assets are digital assets that exist on a cryptographically secured distributed ledger. There are many types of crypto-assets, the most common being cryptocurrencies, such as Bitcoin, Ethereum and Tether. Transactions related to crypto-assets often have tax implications and must be reported on the annual income tax return.
What’s the platform economy
The platform economy involves economic activities facilitated by digital platforms like websites or mobile applications.
There are four main areas in the platform economy:
- Sharing economy: Using and sharing assets like cars and spaces.
- Gig economy: Engaging in short-term contracts, freelance work, or other temporary jobs.
- Peer-to-peer (P2P): Selling goods, such as clothing, directly to others.
- Social media influencer economy: Individuals who have a significant presence or influence on social media.
Tax obligations for crypto-assets and the platform economy
Whether someone is working on a part-time or full-time basis, they need to report all sources of their income including crypto-assets and platform economy work.
Our newly translated tax tips can help crypto-asset users and platform economy participants determine how their involvement will impact their tax obligations and what they can do to fulfill them.
For more information on crypto-assets and the platform economy in English or French, please refer to the following: