Canada’s Tax Agency Assessing Crypto Investors

Wilfred Michael 

Wilfred Michael

News reporter

07 March 2019,
12:29
Canada’s Tax Agency Assessing Crypto Investors

The Canada Revenue Agency (CRA) has adopted a new approach to learning more about the activities of its citizens who invest in cryptocurrencies.

According to a Forbes report, a crypto tax audit unit set up by the CRA in 2017 has recently sent a lengthy questionnaire to individuals who have high-risk tax files related to cryptocurrency investments.

The questionnaire is said to have 54 questions including sub-questions on 13 pages and seeks to find out important details such as how the individuals bought the cryptocurrencies and through which exchanges.

Specifically, the questionnaire wants to know whether any of the recipients had transacted cryptocurrencies through anonymous exchanges like Changelly and Shapeshift, even asking them to provide wallet addresses used for this purpose.

Recipients are also asked to provide information regarding whether they have used any crypto mixing or tumbler service — a process used to hide “tainted” or stolen crypto funds by mixing it with clean funds.

Still, another section asked people to state if they had engaged in any form of cryptocurrency mining or invested in an ICO during the period covered by the audit report.

Canadians Are Paying Crypto Taxes

Although the agency fell short of mentioning the criteria it used to select the sixty tax files that it is auditing, it stated that “a vast majority of middle-class Canadians pay their fair share” of crypto taxes.

For this reason, the agency employed “advanced analytics and business intelligence activities” to make sure that the process of selecting the high-risk tax files was fair enough to exclude people who abide by the law.

Meanwhile, the issue of accurate accounting and remittance of crypto-related taxes to the appropriate authorities has gained traction in recent times. In December, the National Tax Agency of Japan adopted new measures to reduce crypto tax evasion while earlier this week, Big-four auditing firm, Ernst and Young released a new accounting tool for crypto traders.

 

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