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Do You Need To Pay Tax On Crypto In Canada

The rapid rise of cryptocurrency and its fame has opened up several business and income opportunities for a number of people. And in this scenario of income, you might be wondering if you need to pay tax on crypto in canada.

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Do You Need To Pay Tax On Crypto In Canada

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  1. Do You Need To Pay Tax On Crypto In Canada?

  2. The rapid rise of cryptocurrency and its fame has opened up several business and income opportunities for a number of people. Some people are interested in quickly creating wealth by directly trading in the popular, and sometimes high-yield, coins, while others are creating ways to accept them as payments at restaurants and online shops. And in this scenario of income, you might be wondering if you need to pay tax on crypto in canada.

  3. There are also some who may have gained cryptocurrency through mining. However, there is some confusion about how the government may tax these incomes or how an individual or institution should declare them. The move by authorities to first ban and then allow trading in virtual coins has only added to the confusion. Despite all that, you will have to pay taxes on these incomes. The confusion is whether to declare them as capital gains or in any other source. The government plans to compartmentalize virtual currencies and their tax based on their use, be it investments, payments, or utility.

  4. The government has already made it mandatory for companies dealing with virtual currencies to disclose profit or loss incurred on transactions. It also asked them to disclose the amount of cryptocurrency they hold in their balance sheets. But this has not yet brought the taxability laws to govern their transactions. Still, the income tax laws have always sought to tax income received irrespective of how it was received. So there are primarily four scenarios of income from cryptocurrency. 1.Mining Mined cryptocurrencies are self-generated capital assets. Subsequent sale of such bitcoins would usually give rise to capital gains.

  5. 2. Transferred in exchange for real currency The appreciation in the value of cryptocurrency held as an investment may classify as a long-term capital gain or a short-term capital gain depending on how long the asset has been held. 3.  Income from trading activity The income from trading crypto coins would constitute income from business and hence the profit can be taxed as applicable tax slabs. 4. Received on sale of goods and services These cryptocurrency gains can be treated on a par with receipt of money. So the recipient would be taxed under the head profits or gains from business or profession.

  6. There are different ways to invest in cryptocurrency. You can easily understand more about different kinds of cryptocurrency like Bitcoin, Bitcoin cash, XRP, QCAD or even ether. You can sign up at Netcoins to know more about how to buy XRP in canada?SOURCE CREDIT: https://netcoins.tumblr.com/post/666729859287040000/do-you-need-to-pay-tax-on-crypto-in-canada

  7. THANK YOU FOR WATCHING

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