Why Canada’s Tax Plan for Bitcoin Will Benefit the Country?

The decision is expected to bring positive transformation and prosperity to the country. The Canadian Government has decided to treat Bitcoins as commodities for taxation purposes. 

What is Canada’s Tax Plan for Bitcoin?

According to a recent statement by Canada’s tax authority, starting from this year, transactions using Bitcoins will be taxed under barter transaction rules of the Income Tax Act. In addition, the Commodities Futures Act will also apply to the digital currency, the CRA further added.

The announcement has come as a pleasant surprise for the industry and public at large, considering that there were apprehensions about Bitcoins being treated directly as currency or, even worse, with no tax treatment at all. In addition, it would have meant higher costs of transactions and also increased difficulty in conducting transactions involving Bitcoins.

Such transactions are taxable under the Income Tax Act. Therefore, traders need to keep track of the values of goods or services received and provided during a barter transaction for taxation.

As per CRA, transactions using Bitcoins will be treated as barter transactions regarding taxation. “Barter transaction rules apply where digital currency is used to purchase goods or services,” CRA said.

“Generally, the rules for barter transactions apply where two parties agree to a transaction that involves an exchange of goods or services and is governed by the agreement to transfer a particular good or service, at a price expressed in a monetary form,” it added.

The tax authority also said that only those companies dealing with BItcoins would worry about GST/HST implications. “For GST/HST purposes, the reference to digital currency in GST/HST legislation includes Bitcoin,” CRA said.

The Government’s decision is a very progressive step and sends a strong message that it is ready to welcome new technologies and innovations with open arms instead of shunning them. Bitcoin is receiving flak in many parts of the world for its use by criminals, terrorists, and fraudsters. Canada’s positive support is to be welcomed by all those associated with Bitcoins or those planning to operate at https://crypto-nation-pro.com/

Will Canada’s Tax Plan for Bitcoin impact other countries of the world?

The Canadian Government’s progressive opinion about Bitcoins will be studied for many other countries. If Canada succeeds in its effort, it can serve as a model for most nations of the world. However, the success of this plan will depend on how effectively and efficiently it can implement at the domestic level. As things stand, it seems that this plan will be a win-win situation for all, especially Canada.

Come to think of it, the Government’s tax plan will also result in increased investment flow and inflow of foreign capital into Canada, something which is much needed at the moment. Also, if Bitcoin price starts rising due to easing tension with the Government, it will encourage more people to invest in Bitcoins. 

As far as India is concerned, not much news about its stand on Bitcoins has been coming out recently. However, considering that your country has already established itself in IT development, there cannot be any reason why Bitcoins should not receive favorable treatment here.

It is also felt that the Government may consider allowing Bitcoins to purchase through certainly recognized payment gateways similar to what it has done with gold recently. That would certainly help end all illegal activities involving Bitcoin transactions in India.

You are still at the initial stage of development, where acceptance levels are low. However, Bitcoins have already established their credentials to be an attractive investment option and are likely to gain more popularity in days to come.

Canada’s tax plan for Bitcoin will benefit the country in increased foreign capital inflow and much-needed development funds. Because of this, Canada is likely to lead the world in the Bitcoin currency market soon.

As for India, there are high chances that your Government may allow the purchase of Bitcoins through recognized payment gateways similar to what it has done with gold recently. Because of this, a rise in demand for Bitcoins can be expected.