Prime Minister Justin Trudeau proposed a hike in capital gains tax of up to 66% earlier in 2024 to alleviate the financial pressure the housing market is putting on Canada’s citizens.
This hike would include capital gains on stock trades and cryptocurrency sales, with an aim to bring in as much tax revenue as possible. However, citizens and companies alike are protesting the increase, and they are facing backlash.
Even gains that weren’t previously taxed, such as approximately CAD 54 million ($39 million) in cryptocurrency taxes, might be targeted under the proposed hike.
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Undisclosed gains from crypto amount to $40 million
The Canada Revenue Agency (CRA) is chasing after CAD 54 million (approximately $39.5 million) tied to undisclosed cryptocurrency transactions and profits.
Sahil Behal, director general of the CRA’s compliance branch, disclosed that approximately 400 audits and investigations related to crypto assets are underway, as reported by the National Post on May 6.
Behal noted that these inquiries stem from the tax period of 2023-2024, highlighting the agency’s ongoing efforts to address tax obligations related to cryptocurrency.
However, Behal also acknowledged significant challenges in educating the public about their tax responsibilities regarding crypto assets.
Following suit from American counterparts
The CRA is closely tracking the U.S. Internal Revenue Service (IRS), though slightly behind its American counterpart.
The IRS recently issued a draft of tax Form 1099-DA, designed to detail proceeds from brokered crypto asset transactions and noted for its comprehensive audit requirements.
Traders blame CRA for the lack of guidelines over the past year and deem this move unfair as it targets gains retrospectively. The lack of information has caused many traders to refrain from disclosing their gains from crypto trades.
