Canada Describes Bitcoin as ‘Special Foreign Property’

The Canadian Revenue Agency (CRA) has announced it views Bitcoin and digital currency as “specified foreign property” for tax purposes.

The clarification was given in a document, originally dated April 16, as part of a response to a request for additional information regarding Canada’s tax treatment of digital currency wealth.

The request outlined a situation in which a company invests over a certain amount “in a foreign partnership, which in turn invests in digital currency (e.g. bitcoins). The foreign partnership uses currency arbitrage/exchange and other trading methods to increase the net asset value of the fund in a foreign currency.”

The response stated that:

“digital currency would be funds or intangible property and would be specified foreign property of a person or partnership to the extent that it is situated, deposited or held outside of Canada and not used or held exclusively in the course of carrying on an active business.”


Conversely, “the partnership interest would not be specified foreign property if the partnership is a specified Canadian entity,” the CRA writes.

Canada has been the scene of much debate regarding the status of Bitcoin in the country as a whole, notably in contrast to the patchwork

Read more ... source: Cointelegraph