From RT

Canadian ToonieCanadians using bitcoins, the decentralized crypto-currency that recently went mainstream, must report their incomes and pay taxes as with other earnings, Canada’s Revenue Agency (CRA) confirmed following a media request.

The issue was clarified in response to a letter by the Canadian Broadcasting Corporation (CBC) ahead of the country’s tax season.

Two separate tax rules are applicable to the electronic currency, CRA spokesperson Philippe Brideau told CBC in an email.

When bitcoins are used as money to buy goods and services, the transaction is treated as barter and is taxable as such. When they are traded at a market for profit, they may be taxed as capital gains.

“When bitcoins are bought or sold like a commodity, any resulting gains or losses could be income or capital for the taxpayer depending on the specific facts,” the CRA ruled.

The Bitcoin community is well aware that governments may soon tax their operations: A Bitcoin wiki page on the issue says taxation depends on jurisdiction, and suggests consulting a professional lawyer or accountant.

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