The Canadian Revenue Agency treats cryptocurrencies as commodities for Canadian tax purposes.
This poses a problem for cryptocurrencies which must be valued at each trade. Unlike standard commodities, their price is volatile with markets differing around the planet.
Under the Income Tax Act, cryptocurrencies present new challenges in reporting. In addition, due to the nature of foreign currency exchanges, there are legal quagmires surrounding the purchase of crypto assets abroad. While cryptocurrencies are generally taxed as capital gains, businesses profiting from their trade may see gains taxed as business income. Demonstrating this distinction may require expertise, particularly in the case of masternode maintenance.
Cryptocurrencies and tax strategies
You are considered to be running a business if:
- You have a history of trades;
- Those are rapid purchases;
- You commit an important part of your time to the analysis of the market;
- You do the research;
- You finance your transactions.
We will highlight available tax strategies for you, such as incorporation.
The various requirements can be challenging to identify. For instance, taxpayers are required to file Form T1135 with CRA if they own specified foreign property that in the aggregate cost more than $100,000.
In the case of crypto assets, when these are held by third-parties in a foreign state, they may subject to that form. Failure to file results in a minimum automatic penalty of $2,500 for each annual failure to file.
Our tax experts and lawyers will help work through your obligations.
28 Mar 2018 | Written by :
Louis Roy is a partner at Raymond Chabot Grant Thornton. He is your expert in assurance for the...
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Quebec’s economy is faring better and the Quebec government has decided to open the floodgates.
In his fifth budget, the Quebec Finance Minister is focussing on investments in a wide range of economic sectors. However, the current scenario places Quebec in a deficit position for the next two years.
Quebec’s 2018-2019 Economic Plan is casting a wide net, encompassing health, education, public transit, road infrastructures and families. Businesses will also reap benefits. Could the election year have influenced the many investment choices?
Support was expected for SMEs and the budget did not disappoint. Tax relief measures totalling $2.2B will be introduced by 2022-2023 to boost their competitiveness.
Lower payroll taxes
Corporate contribution rates to the Health Services Fund will be reduced, providing SME with $1.2B in savings.
Income tax reduction
An additional positive measure is the gradual decrease of the income tax rate for SMEs in the services and construction industries to 4% by 20222023, with the objective of having these SME eventually benefit from the same rates as SMEs in the primary and manufacturing term. This measure results in a $1B tax reduction.
Additional innovation support
The budget includes support for businesses to foster innovation and help them carve a place for themselves on the international market.
Support of $60M by 2019-2020 has been announced to promote the development of supply chains optimized by artificial intelligence. Additionally, relief totalling $241M has been provided to accelerate business investment in the next five years. These enhancements are the result of increasing the additional capital cost allowance from 35% to 60% and extending it to March 31, 2020 to support the acquisition of cutting-edge technologies. This measure would benefit more than 30,000 businesses investing to improve their productivity.
National labour strategy
Over the next five years, more than $800M will be invested to better support the labour market. Among others, the budget introduces a new tax credit for SMEs if they set aside time for their employees to develop their professional skills. In the coming weeks, the government will be tabling its 20182023 National Workforce Strategy. This national strategy will set aside significant resources to better integrate immigrants in the job market.
Regional economic development
The numerous measures announced include new funds totalling $724M by 2022-2023 for initiatives to be determined that would support economic development in the regions, be it for the forestry sector, mining development, pursuing the maritime strategy or the Plan Nord.
Voluntary disclosure program
The government is announcing a consultation to review the voluntary disclosure program with the potential objective of tightening it up like the federal government did.
For more information on the tax measures announced in the 2018-2019 budget, download the document below.
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What is the Tax Cuts and Jobs Act?
It’s the most important tax reform since 1986 and was voted on by the U.S. House of Representatives and Senate in December 2017.
Do you do business in the United States? Are you wondering how this new reform will impact you?
Listen to our free webinar. Topics discussed include:
- Changes to U.S. tax rates and the tax system;
- Changes to interest deductibility, amortization and using operating losses;
- New restrictions on using hybrid instruments and entities;
- New rules for foreign corporations controlled by a U.S. corporation or citizen.
This information session is courtesy of Raymond Chabot Grant Thornton and is given in French.
You can download the presentation below.
Watch online here (in French)
Password: rcgt2603
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Complementary summaries of the Canadian provincial budgets are posted online, or will be in the coming weeks, thanks to an initiative in association with Grant Thornton Canada.
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New BrunswickOn January 30, 2018, New Brunswick Finance Minister, The Hon. Cathy Rogers, tabled the province’s 2018–19 budget. The province will continue to focus on the following three areas: health care, education and jobs. The province has revised the projected deficit for 2017–18 to $115.2 million and has projected a deficit of $188.7 million for 2018–19. The province, however, is projecting a surplus of $69 million by 2021–22. Yet the province’s debt will continue to increase and is projected to reach $14.5 billion by the end of 2018–19. There are no new tax measures or tax increases included in this budget. The budget contains relatively few taxation changes other than a decrease in corporate tax rates for small businesses.
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British ColumbiaFebruary 20, 2018, Finance Minister Carole James tabled British Columbia’s 2018–19 budget. This is the first full budget presented by the province’s new government; it outlines an overall plan to increase affordability for residents of BC, with a primary focus on the need for affordable housing solutions and the demand for more affordable, available childcare. Building on the legacy that was set by the previous government, the government has delivered the province’s sixth balanced budget in a row, and continues to project surpluses over the next three years. Debt levels, however, are expected to increase and are projected to reach $77 billion by the end of 2020–21.
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ManitobaOn March 12, 2018, Finance Minister Cameron Friesen tabled Manitoba’s 2018-19 budget (Budget 2018). This budget reduces taxes for small business corporations and individuals by increasing the corporate small business limit and basic personal amount. Budget 2018 also reconfirms the government’s commitment to reducing the province’s deficit and returning Manitoba to fiscal balance.
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Nova ScotiaOn March 20, 2018, Finance and Treasury Board Minister Karen Casey tabled Nova Scotia’s 2018-19 budget (Budget 2018). This budget represents the third balanced budget in a row that has been presented by Nova Scotia’s Liberal government and, while it provides no major tax changes at the personal or corporate levels, it outlines the province’s commitment to investing in health care, education, early years, communities and inclusive economic growth.
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AlbertaOn March 22, 2018, Finance Minister Joe Ceci tabled Alberta’s 2018-19 budget. This budget sees the province emerging from a time of economic recession with a focus on diversifying its resource-based economy to one that is resilient, stable and less vulnerable to future changes in the price of oil. To accomplish its goals, the province’s NDP government has outlined three main areas of focus: diversifying the economy, protecting vital public services and returning the province to fiscal balance. It has been announced that the province will focus on controlling spending, eliminating waste and finding efficiencies in order to balance the budget by 2023, and then begin to focus on reducing the net debt levels.
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Newfoundland and LabradorOn March 27, 2018, Minister of Finance Tom Osborne tabled Newfoundland and Labrador’s 2018-19 budget. This budget sees the province’s Liberal government focusing on reducing expenditures as part of an overall approach to address the province’s economic, social and fiscal challenges. The government has indicated that these challenges need to be addressed in a balanced manner, without massive job reductions or cuts to services, to avoid a compounding effect on an already challenged economy. The province plans to work towards fiscal balance over the next five years by reducing the government’s overall footprint, achieving operational efficiencies through the use of technology and shared services, and continuing to focus on expenditure control.
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OntarioOn March 28, 2018, Finance Minister Charles Sousa tabled Ontario’s 2018-19 budget. As a result of the province’s strong economic performance over the 2017-18 fiscal year, the government has announced through this budget that it has achieved its target of fiscal balance for the year. While previously it was projected that the province’s Liberal government would present balanced budgets over the next two fiscal years, recent policy changes have indicated that the government intends to make large strategic investments in infrastructure and social programs with the goal of creating conditions for a more robust economic expansion Notable investments include the expansion of the OHIP+ (free prescription) program so that it applies to people aged 65 and above commencing August 2019, as well as investing $2.2 billion over three years to provide free, licensed child care, beginning in 2020, to children aged 30 months and above.
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Saskatchewan
Available soon.
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Prince Edward Island
Available soon.
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