Canada is set to become one of the first nations to adopt the International Crypto-Asset Reporting Framework (CARF) for taxation by 2026, according to a supplement to the country’s 2024 annual budget reported by the National Post on April 16. The CARF, agreed upon by the Organisation for Economic Co-operation and Development (OECD) in August 2022, aims to be implemented in 47 countries by 2027, as pledged in November 2023.
The framework places new reporting requirements on crypto asset service providers (CASPs), including exchanges, brokers, and ATM operators. These providers will be obligated to report various transactions to the Canada Revenue Agency (CRA), including crypto-to-fiat and crypto-to-crypto transactions exceeding $50,000 USD, and collect information on their customers, both residents and non-residents.
Additionally, the budget plan proposes to raise the capital gains tax inclusion rate from 50% to 66% for annual incomes exceeding $250,000, sparking concerns within the Canadian crypto community about the impact on cryptocurrency sales and investments.
In conclusion, Canada’s adoption of the CARF reflects a growing trend among countries to regulate and tax crypto assets, aiming to address financial risks and combat tax evasion. However, the proposed tax hike on capital gains has raised concerns about its potential impact on individuals and businesses involved in the crypto industry.
