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ARTICLE · 25 APRIL 2014

More Guidance From The CRA On Bitcoin Activities and Transactions

Dentons Canada LLP
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The CRA has issued further guidance on the Canadian tax issues arising in respect of the virtual currency.

CanadaTax
Timothy Fitzsimmons
Timothy Fitzsimmons
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Following the recent IRS publication on the U.S. tax treatment of bitcoin activities and transactions, the CRA has issued further guidance on the Canadian tax issues arising in respect of the virtual currency.

In CRA Document No. 2014-052511E5 "Virtual Currencies (Bitcoins)" (March 28, 2014), the CRA was asked several questions about bitcoin activities and transactions (not all of the underlying facts are described in the technical interpretation, but we can infer what the taxpayer asked from the responses provided by the CRA).

Bitcoin Mining Business?

In respect of bitcoin "mining", the CRA noted the difference between business and personal activities. In Stewart v. The Queen (2002 SCC 46) the Supreme Court of Canada stated that an activity may be commercial in nature if the taxpayer had a subjective intention to profit and there was evidence of business-like behaviour supporting such intention. Whether a particular activity is undertaken for profit is a

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