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On-line Tax Strategies: Canadian Sales Taxes and the Digital Economy

On May 17, 2019, the Finance Minister for Canada released draft legislation relating to the goods and services tax/harmonized sales tax (GST/HST) with respect to cryptocurrencies and other virtual payment instruments.

Digital currencies are based on a decentralized, peer-to-peer (P2P) network that is not supported by any government or central authority. Additionally, financial institutions generally do not manage or oversee digital currency.

For Canadian tax purposes, including the GST/HST, cryptocurrencies are intangible personal property that cannot be considered as money as they are not legal tender in Canada. In fact, only bank notes issued by the Bank of Canada under the Bank of Canada Act and coins issued under the Royal Canadian Mint Act are legal tender in Canada.

For more information, read our On-line Tax Strategies newsletter.

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