Canada’s Tax Authority Targets Crypto Tax Dodgers, Investigating Multimillion-Dollar Cases

Canada crypto tax
Last updated:
Crypto Reporter
Crypto Reporter
Shalini Nagarajan
About Author

Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

The Canada Revenue Agency (CRA) is cracking down on crypto, going after C$54m ($39.5m) in suspected unpaid taxes. It is also launching investigations into hundreds of crypto investors.

The National Post reported Monday that Sahil Behal, a director general at the CRA’s compliance branch, revealed the agency is currently conducting around 400 audits on crypto-related activities. Still, he acknowledged a major need for public education regarding crypto tax obligations.

Meanwhile, veteran tax lawyer, David Rotfleisch, criticized the CRA’s efforts as a “drop in the bucket.” He argued the agency needs to significantly increase education on crypto tax obligations for owners and traders.

He also highlighted the issue by mentioning his own experience dealing with “multiple clients with multimillion dollar (crypto) issues,” emphasizing that he’s just one lawyer and likely sees only a fraction of the total cases.

Canada Authority Under Fire for Lax Approach to Tax Evasion

The CRA has previously faced criticism for how it handled tax cheats in the last couple of years. While the agency secures convictions in smaller cases, critics argue it falls short in tackling larger tax evasion instances and aggressive avoidance schemes.

In June 2021, it clarified cryptocurrency is generally considered a commodity for tax purposes. This means any income earned through crypto transactions is taxed as either business income or a capital gain, depending on specific circumstances. Likewise, any losses incurred are treated as business losses or capital losses.

Not all cryptocurrency buying and selling qualifies as business activity for tax purposes. Taxpayers need to determine whether their crypto activities generate income or capital gains. This significantly impacts how they report it on their tax return.

The CRA also offers online resources explaining how cryptocurrency transactions are taxed.

Meanwhile, governments worldwide are stepping up efforts to catch tax evaders. This includes increased information sharing between countries to track individuals who move money internationally or use new technologies to dodge taxes.

Canada to Crack Down on Crypto with Mandatory Reporting

Canada is implementing the Crypto-Asset Reporting Framework (CARF) starting in 2026. This framework requires local crypto-asset service providers or doing business there to submit annual reports to the CRA.

The reported information will include the value of transactions involving cryptoassets and fiat currencies. It will also include exchanges between different cryptoassets and cryptoasset transfers. Additionally, client information such as full names, residential addresses, dates of birth, and taxpayer identification numbers will also be reported.

More Articles

Bitcoin News
GameStop Plans to Invest in Bitcoin, Shares Surge 20% in Extended Trading
Sujha Sundararajan
Sujha Sundararajan
2025-02-14 05:50:46
Altcoin News
SEC Acknowledges Grayscale’s Filings to List XRP, Dogecoin ETFs
Shalini Nagarajan
Shalini Nagarajan
2025-02-14 05:38:36
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors