Canada Taxing Bitcoin Transactions

[freedomno1]

It looks like the rules of taxation for bitcoin will soon be taking effect

Canada’s Revenue Agency says users of bitcoins are obligated to pay taxes on transactions using the alternative currency, The agency told the CBC that two tax rules apply to the digital currency, depending on how it’s used. Barter transaction rules apply to bitcoins used for goods or services, according to the report.  Bitcoins bought and sold for speculative purposes are subject to captial gains or income taxes, depending on the specifics of the case, the agency says

 http://blogs.marketwatch.com/thetell/2013/04/29/canada-to-tax-bitcoin-transactions/

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[syn999]

at least they dont shut all banks accounts

[Mike Christ]

I'm excited to see how they're going to pull it off.  I mean, if it's a measly "You should do it", I see many issues springing up in the future; they may not know who's avoiding taxes, but they'll see clear as day taxes are being avoided.  Then they have fire power to campaign against the use of Bitcoin.

[freedomno1]

I admit it will be interesting and challenging for them to find everyone's wallet number but they might just copy the Americans seems some legislation is passing through and apply it to provinces and territories instead and bam pulled off. Well sort of, if you keep reading covers your points

A bill that would let states tax your online transactions will be one step closer to becoming law. The proposal’s been subject to an unusual battle that’s united liberals and conservatives while dividing big Internet companies. Amazon, for instance, supports the measure —partly because an Internet sales tax would hurt its smaller rivals. But the Senate bill, known as the Marketplace Fairness Act, could also unintentionally wind up serving an upstart of a different kind: Bitcoin, the much-discussed digital currency that some see as a rival to traditional cash or credit cards and others have dismissed as an impractical mashup of technology and money.

http://www.nationaljournal.com/tech/what-an-internet-sales-tax-could-mean-for-your-bitcoin-stash-20130425

Personally I agree with part of robert mccoys comment on marketwatch if regulations are made it just makes it even more err legit as a real means of trade but unlike his point I think it is practical just the regulations need to be made to increase acceptance probably something like Canada was thinking ahead.

I agree with John Kallionen and Rusty Slade below. The CRA has given government recognition to the bitcoin as having some sort of intrinsic value. Canada could be stepping into a mirky bog here. It raises an open question whether you can pay taxes in bitcoins. What happens when another internet currency gains acceptance. A thousand or so computer wizards will be vying to invent the next bitcoin.
What the CRA doesn't realize is the very nature of the bitcoin is a direct challenge to a government's sovereign right to create and manage its own currency. It also means the authority of central banks is no longer sacrosanct. This may represent a global fatigue with currency manipulation by these institutions, and many people everywhere are voting with their feet. The CRA's initiative could well end up ten years from now with the famous adage, 'What were they thinking?'
Frankly, I don't think bitcoins are practical because you you cannot make change with them though I can see exchanges with one half of a bitcoin in the future. Perhaps bitcoin bytes of .01 are not far off.
As we Canadians are fond of saying, "Only in Canada, eh?"


None of this is to suggest that bitcoin-based transactions are or should be exempt from online sales taxes—just that collecting them presents a new challenge. On the one hand, this could play out badly for Bitcoin if the ambiguity discourages retailers from adopting the tender. On the other hand, it also creates the possibility of a loophole. “Oops,” the businesses will tell the states. “We can’t collect this tax for you because the customer paid in bitcoins and we don’t know where he or she lives.”
Such a loophole would be a good reason for retailers and consumers alike to start flocking to bitcoins. It’s not clear what Congress could do to close the loop. If it tried, it would probably have to mention virtual currencies explicitly in the legislation, perhaps by setting a single national sales tax for all bitcoin-based purchases. Ironically, either outcome would likely help bitcoin gain, er, currency. Much as the Treasury Department cleared up legal uncertainty surrounding Bitcoin when it made its policy statement on it last month, a similar move by Congress would clarify things even more. That’d be a good thing for Bitcoin. As one widely read analysis of the currency explains, legal uncertainty has been one of the bigger obstacles to wider adoption.

[kjj]

Frankly, I don't think bitcoins are practical because you you cannot make change with them though I can see exchanges with one half of a bitcoin in the future. Perhaps bitcoin bytes of .01 are not far off.

[Killdozer]

Well what did you expect? If you deal in any other currency than Canadian (dollars?) you must pay taxes, so why not so with Bitcoin?

[syn999]

man, i can see revolutions happening around the world in 100 years. completely new government, new currency and same banking system

[plutuswd]

I'm excited to see how they're going to pull it off.  I mean, if it's a measly "You should do it", I see many issues springing up in the future; they may not know who's avoiding taxes, but they'll see clear as day taxes are being avoided.  Then they have fire power to campaign against the use of Bitcoin.

That's not the way our government works. They cannot outlaw bitcoin. We have the right to private property and there is a long standing coupon called "Canadian Tire Money" that is widely used. If you look at the development of Canada's banking and money you will see many private coupons. These were all legal.

This should be seen as a huge victory for bit coin. The Government of Canada has just officially recognized bitcoins and has stated that they want a slice of the action.

Now we just need to deal with the criminal cabal of bankers that are going to do everything in their power to subvert and undermine the currency.

http://business.financialpost.com/2013/04/27/bitcoin-canada-banks/

"For whatever reason, many in Canada’s small but fast growing Bitcoin community are suddenly dealing with the same problem: The banks have decided they don’t like the cryptocurrency and they’re shutting down some of the accounts of businesses that deal in it."

[Eich]

Well what did you expect? If you deal in any other currency than Canadian (dollars?) you must pay taxes, so why not so with Bitcoin?

Why not bitcoin? Because taxation is theft. The only reason they want to tax it is because they cant help but extort money from their cattle. Any time they see someone trying to break free from their scheme, they put systems in place to prevent others from doing it. Its high tech slavery, where you let the slave pick and choose their job and place to live, making them more productive to the slave owner.

Once something like zerocoin comes out and the ledger is nothing but a big washing machine, how are they going to tax it? as long as you don't deal in their garbage fiat, how could they tax you?

[QuantPlus]

I'm excited to see how they're going to pull it off.  I mean, if it's a measly "You should do it", I see many issues springing up in the future; they may not know who's avoiding taxes, but they'll see clear as day taxes are being avoided.  Then they have fire power to campaign against the use of Bitcoin.

That's not the way our government works. They cannot outlaw bitcoin. We have the right to private property and there is a long standing coupon called "Canadian Tire Money" that is widely used. If you look at the development of Canada's banking and money you will see many private coupons. These were all legal.

"Canadian Tire Money" cannot be converted to Canadian $$$...
So it's not a currency... it's just a discount coupon.

[zeroday]

Consequently, exchanging World-Of-Warcraft Gold to Diablo III Gold is speculation, buying items in MMORPG for in-game virtual currency is barter.
Oh my god! Millions of online players are now tax evading criminals!

[Eich]

Consequently, exchanging World-Of-Warcraft Gold to Diablo III Gold is speculation, buying items in MMORPG for in-game virtual currency is barter.
Oh my god! Millions of online players are now tax evading criminals!

BAahahahahhaa!!

http://i370.photobucket.com/albums/oo142/richter343/gif%20files/hangover-1.gif PShhhhh!!

Man i love circumventing governments.

[plutuswd]

I'm excited to see how they're going to pull it off.  I mean, if it's a measly "You should do it", I see many issues springing up in the future; they may not know who's avoiding taxes, but they'll see clear as day taxes are being avoided.  Then they have fire power to campaign against the use of Bitcoin.

That's not the way our government works. They cannot outlaw bitcoin. We have the right to private property and there is a long standing coupon called "Canadian Tire Money" that is widely used. If you look at the development of Canada's banking and money you will see many private coupons. These were all legal.

"Canadian Tire Money" cannot be converted to Canadian $$$...
So it's not a currency... it's just a discount coupon.

Yes it can. I have traded people for canadian tire money in the past. I gas up there and got a discount by buying their cdn tire money.

[plutuswd]

I'm excited to see how they're going to pull it off.  I mean, if it's a measly "You should do it", I see many issues springing up in the future; they may not know who's avoiding taxes, but they'll see clear as day taxes are being avoided.  Then they have fire power to campaign against the use of Bitcoin.

That's not the way our government works. They cannot outlaw bitcoin. We have the right to private property and there is a long standing coupon called "Canadian Tire Money" that is widely used. If you look at the development of Canada's banking and money you will see many private coupons. These were all legal.

"Canadian Tire Money" cannot be converted to Canadian $$$...
So it's not a currency... it's just a discount coupon.

Go to the currency museum at the bank of Canada in Ottawa. You will be surprised by the number of companies and municipalities that issued their own scripts. This is not a new idea, it's just a new method of doing a very old idea.

[gogxmagog]

I'm excited to see how they're going to pull it off.  I mean, if it's a measly "You should do it", I see many issues springing up in the future; they may not know who's avoiding taxes, but they'll see clear as day taxes are being avoided.  Then they have fire power to campaign against the use of Bitcoin.

That's not the way our government works. They cannot outlaw bitcoin. We have the right to private property and there is a long standing coupon called "Canadian Tire Money" that is widely used. If you look at the development of Canada's banking and money you will see many private coupons. These were all legal.

"Canadian Tire Money" cannot be converted to Canadian $$$...
So it's not a currency... it's just a discount coupon.

I've used canadian tire money at 3 different places that accepted it on par. A bar and 2 cafes. The owners had work to do on their bricks and mortar business and gladly accepted the Canadian Tire bux. Also I have seen pawnshops that will buy them at a percentage of face value. The older denominations (half cent, third-of-a-cent, discontinued in the 70s) are highly collectible and worth quite a bit. Its one of my fav alt-currencies, although, I believe they discontinued it a few years back, didn't they?

I still have a 5 cent can tire note in my wallet, and when I'm traveling I like to troll new friends from foreign lands by showing it to them and telling them the guy pictured on the reverse is "The King of Canada; Angus McTavish" good for teh lulz!

[gogxmagog]

and, revenue canada will only be able to tax bitcoiners at the point of fiat-to-btc, or bitcoin-to-fiat exchange. Dont use the exchanges and you wont be visible to them.

gotta go change my avatar to the canadian tire money scottsman now ;-)

[Bitware]

http://www.gnucash.org/

[freedomno1]

http://blogs.wsj.com/digits/2013/04/30/could-paypal-be-on-horizon-for-bitcoin/
Paypal approval and tax rules sees it developing

[RenegadeMind]

Well what did you expect? If you deal in any other currency than Canadian (dollars?) you must pay taxes, so why not so with Bitcoin?

Why not bitcoin? Because taxation is theft. The only reason they want to tax it is because they cant help but extort money from their cattle. Any time they see someone trying to break free from their scheme, they put systems in place to prevent others from doing it. Its high tech slavery, where you let the slave pick and choose their job and place to live, making them more productive to the slave owner.

Once something like zerocoin comes out and the ledger is nothing but a big washing machine, how are they going to tax it? as long as you don't deal in their garbage fiat, how could they tax you?

Yes. That. +1

The other thing is that only CAD can be used to pay taxes in Canada. BTC isn't "legal tender" for taxes.

[QuantPlus]

http://blogs.wsj.com/digits/2013/04/30/could-paypal-be-on-horizon-for-bitcoin/
Paypal approval and tax rules sees it developing

This is huge and deserves it's own thread...
EBay/Paypal is saying, "This is inevitable... let's be early adopter".