Canada tightens crypto reporting measures in 2024 budget

Announced on April 16, the budget plans to enforce the Crypto-Asset Reporting Framework (CARF), a system approved by the Organisation for Economic Co-operation and Development (OECD) in August 2022.

The move came in response to the G20’s mandate in 2021, which required the OECD to develop a framework supporting the automatic exchange of tax information involving crypto assets.

Cryptoasset service providers, including exchanges, brokers, dealers, and ATM operators, will have to comply with the new reporting requirements and disclose complete transaction details to the government every year.

The reporting criteria require service providers to report transactions between different cryptocurrencies, between cryptocurrencies and fiat currencies, and transfers of cryptocurrencies. However, transactions initiated using central bank digital currencies (CBDCs) are exempt from these requirements.

On top of these, cryptocurrency service providers will also be reporting client-specific information such as full names, residential addresses, dates of birth, jurisdictions of residence, and taxpayer identification numbers. Further, these requirements will apply to both Canadian residents and non-residents.

As the implementation of the CARF will require significant funding, the budget suggested allocating CA$51.6 million ($37.3 million) to the Canada Revenue Agency (CRA) over five years starting from 2024-25. Further, an annual budget of CA$7.3 million ($5.2 million) has been allocated to sustain the ongoing administration and operational costs.