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back to article Bitcoin is MONEY, says Canada

Canada's government has enacted what's believed to be the first legislation worldwide to define the status of crypto-currencies: they're money and have to be accounted and reported as such. The laws, under the gripping title An Act to Implement Certain Provisions of the Budget Tabled in Parliament on February 11, 2014 and Other …

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Here comes the taxman!

"Regular money" = taxation.

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Re: Here comes the taxman!

Yeah... but how much money do you owe them exactly ?

Since the value of Bitcoins can fluctuate wildly there has to be a

way to determine this "value" as a certain amount of "regular money"...

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Re: has to be a way to determine this "value

That's where the "they're money and have to be accounted and reported as such" comes into play.

The taxman is indeed elbowing his way in, and will be setting rules to ensure that the fluctuations are not exempt of tracking for tax reasons.

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Pirate

Re: Here comes the taxman!

"....but how much money do you owe them exactly ?...." The taxman will tell you how much they think you should pay, not what you think is actually reasonable. If you should choose to disagree, you can have your assets seized and go to prison or you can go to court and spend your more of your real money trying to convince the court the tax is unreasonable. Of course, should The Powers That Be decide they want to make Bitcoins unpopular by taxing them massively.....

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Re: has to be a way to determine this "value

I can't speak for Canadian tax authority but in the UK I don't see why there would be different rules for bitcoin than there already are for currency and commodity trading. The volatility issue happens with those too. Generally speaking you pay tax on any profits you make on your investment, subject to legitimate tax deductions, allowances and tax mitigation methods.

Generally you pay cap gains at 25% over the first 10k although there are income tax options too.

I for one am looking forward with amusement to the first bitcoin ISA. :)

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Anonymous Coward

Re: Here comes the taxman!

The Royal Bank of Canada sets exchange rates and valuations for currencies. Those rates are used to determine the value of foreign (Non-Canadian dollar) currencies and those values are used on tax returns. A loss of value could end up as a tax break, but admittedly I've been out of the country for some years and things may have changed.

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Re: Here comes the taxman!

"Yeah... but how much money do you owe them exactly ?

Since the value of Bitcoins can fluctuate wildly there has to be a

way to determine this "value" as a certain amount of "regular money"..."

Wouldn't be easier just to tax the bitcoins? You should pay (let's say) 15% of your bitcoins profits. If you profited 400 BTC, then you should pay 400BTC x 15% = 60BTC.

Since BTC is, now, real money in Canada... buying/selling BTC for Canadian Dollars wouldn't count as "profit", would it? It should be counted as changing money. Shouldn't it?

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Pirate

Re: Marcelo Rodrigues Re: Here comes the taxman!

"....Wouldn't be easier just to tax the bitcoins?...." Nice idea but the taxman is notoriously inflexible in their choice of payment means and terms. Accepting tax in Bitcoins would entail additional costs to the Canadian government in working out the rate and converting them into Chuck dollars, they are much more likely to want you to do the conversion for them and then pay in C$.

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Re: Here comes the taxman!

Since BTC is, now, real money in Canada... buying/selling BTC for Canadian Dollars wouldn't count as "profit", would it? It should be counted as changing money. Shouldn't it?

Nope, the taxman in many countries will apply some rules on exchange rates that will apply on any BTC transactions. The usual method is that if you receive X quantity of "foreign currency", the exchange rate for the day the transaction was made is the exchange rate used for taxation purposes. I'm guessing Canada's taxman will follow the same rule with BTC.

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The only thing worse than not getting what you want.

Isn't this what the Bitcoin fanciers wanted? Now Canada is recognizing your made-up, number-based currency as real money. You get to pay tax and be regulated just like everyone else! Yippee! Oh, you didn't want Bitcoin to be money?

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Re: The only thing worse than not getting what you want.

I don't think anyone has a contradictory viewpoint, other than the straw man you made up. Different people have different views - among those using Bitcoin, some may want it to be some underground tax-evading thing, but plenty of others want it to be legitimate, including being happy to pay taxes on it.

And there's nothing special about being "money" - for example in the UK, taxes like capital gains cover profits made from any investment whether or not it's classed as "money", so why would we think Bitcoin be exempt from that?

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Anonymous Coward

Not just Tax

This means a whole host of financial regulations will be required...I'm not sure if this is a good thing (people feeling more confident in using these currencies) or will just thwart business innovation.

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Anonymous Coward

Re: Not just Tax

The banking regulations in Canada did somewhat thwart the banks from being innovative like their American counterparts in the early 2000's. Of course when that "innovation" was shown to be nothing more than a house of cards and came crashing down in 2008, Canadian banks did not suffer direct blows in the least (some fallout of course from the world wide financial hangover).

Bitcoin regulation in Canada should be a positive for it. Lets see how it works in a highly regulated environment that generally keeps the financial sector running smoothly on cruise control rather than encouraging wild swings, for which Bitcoin is already known.

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Good for canada

If any of these crypto currencies have a real desire to become more than a vehicle for speculators this can only be a good thing.

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Big Brother

How about stocks and shares

If the world of bitcoin is considered a business, where bitcoins themselves are shares, should we expect rules about insider trading? But who are the directors and employees? Do we consider un-mined bitcoins as shares that are issued at zero value, or the current bitcoin value? Will there be rules about manipulating the market? Is it possible to regulate the market?

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"how much money do you owe them exactly ?"

Their answer to this would be, "what have you got?"

No taxman has ever had a hard time deciding you owe them money. No actual calculation is involved or required.

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if btc is money then wouldn't the tax office make the taxable calculation in btc and ask for a payment at the current rate (or maybe you can pay in btc).

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