The Canadian tax authorities (the Canada Revenue Agency, or CRA) have reportedly embarked on a major investigation. The government body carries out audits at cryptocurrency investors who invested in crypto last year. The agency does this on the basis of a huge questionnaire in which 54 questions are asked about crypto-related activities.
Since 2013, Canadians have had to pay taxes on their crypto-income. In the years that followed, the agency said it wanted to “keep up with global technological developments” and set up a special cryptocurrency unit. The agency then said the following about it:
This unit has increased the ability of the CRA to monitor and enforce compliance in areas with new risks, including the cryptocurrency market. There are currently more than 60 active audits related to cryptocurrency.
Crypto traders are reportedly asking whether they have purchased crypto over the past year via ShapeShit or Changelly. These are cryptocurrency exchanges on which traders can buy cryptocurrency virtually anonymously. If a crypto-investor has not bought crypto on these platforms, the CRA will ask where they have purchased crypto.
Investors are also asked to provide all public cryptocurrency keys of the wallets in which they store cryptocurrency. They also have to give up mining income and participations in Initial Coin Offerings (ICOs).
The CRA hopes to be better informed about the latest developments by gaining more clarity about new business models and platforms. The CRA said in a statement:
The increased efforts of the CRA in this industry stem directly from the broader Underground Economy Strategy, in which we are instructed to follow platforms and new business models, with special attention to the sharing economy and digital currency.
So the CRA is doing everything it can to remind crypto investors that they also have to pay taxes. In many countries it is often still vague about which transactions exactly tax should be paid. Gradually, however, large accountancy companies are now using tax tools.