Category: CRA

Cryptocurrency and Taxes

While merely holding bitcoin, dash, or other cryptocurrency does not give rise to tax, the sale will result in a capital gain or full income inclusion. The use of bitcoin in a transaction will also be considered a disposition for Canadian income tax purposes and will result in income that has to be reported.  If you sell digital currency in 2017 your profits will have to be declared when you file your 2017 tax return by April 30, 2018.



Limits on CRA Collections – GST/HST

Canada’s Excise Tax Act gives sweeping powers to the Canada Revenue Agency (“CRA”), and by extension its tax collection officers, to collect the tax debts of taxpayers. In many cases, taxpayers are taken by surprise when their bank accounts are frozen, assets liened or seized and wages garnisheed. However there are certain limitations on when the CRA can legally take action to collect GST/HST tax debt, which are both situational and based upon strict timeframes. Unlike most debts under the Income Tax Act, there is no initial 90 day period where collection action is barred after a GST/HST assessment. There is however a 10 year limitation period that applies to GST/HST tax debts. This limitation period is ‘restarted’ whenever the CRA takes action to collect the debt or the taxpayer acknowledges the tax debt, which can mean that a GST/HST debt more than 10 years old is still collectible. If you need help dealing with CRA tax collectors, one of our expert Canadian GST/HST tax lawyers can help.

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Gifts from other registered charities

A registered charity should not issue official donation receipts for gifts (cash or gifts in kind) it receives from other registered charities nor should other registered charities insist on receiving official donation receipts. Official donation receipts that bear a charity’s registration number and other information are required for tax deduction or credit purposes only; registered charities do not pay income tax and, therefore, do not need a donation receipt.

A charity can acknowledge gifts received from other registered charities by way of a letter or ordinary receipt – one that does not state that it is an official receipt for income tax purposes.

The charity should still provide its registration number to donor charities for their reporting requirements.

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