Canada is taking proactive steps to align its cryptocurrency taxation policies with international standards. According to a supplement to the country’s 2024 annual budget, Canada aims to implement the Organisation for Economic Co-operation and Development’s (OECD) Crypto-Asset Reporting Framework (CARF) by 2026, joining 46 other nations committed to adopting the new standard by 2027.
The CARF introduces stringent reporting requirements for crypto asset service providers (CASPs), such as cryptocurrency exchanges, brokers, dealers, and automated teller machine operators. These entities will be obligated to report transactions involving the exchange of crypto assets for fiat currencies or other crypto assets to the Canada Revenue Agency (CRA). Additionally, any crypto asset transfers facilitated by CASPs, including payment processing, exceeding $50,000 USD in value will also need to be reported.
Moreover, CASPs will be required to obtain and disclose comprehensive customer information, including names, addresses, dates of birth, jurisdictions of residence, and taxpayer identification numbers for each jurisdiction of residence. These reporting obligations will apply to CASPs residing in Canada or conducting business within the country, encompassing transactions involving both Canadian residents and non-residents, whether individuals or entities.
The implementation of the CARF in Canada is part of a broader global initiative spearheaded by the OECD to enhance transparency and information sharing among international tax authorities. While digital representations of fiat currencies, such as stablecoins, will be exempt from reporting under the CARF, the collected data will be shared internationally, aligning with the OECD’s Common Reporting Standard (CRS).
