CRA means Canada Revenue Agency; with this agency having the mandate in ensuring full compliance on behalf of governments across Canada on the basis of tax administration, benefits, and related programs, for the purpose of making meaningful impact on the ongoing economic and social well-being of Canadians.
What’s CRA’s View on Cryptocurrency?
CRA views cryptocurrency as a commodity, of which capital gains tax must be paid on your profits. However, directions from CRA as of January, 2022 stated that all Money Services Businesses in Canada will have to notify the CRA of transactions greater than $10,000, meaning that if you send $10,000 to a cryptocurrency exchange, it will be reported by the exchange to the CRA.
Does KuCoin Report to the CRA?
With the legal requirement to report large transactions greater than $10,000 as been traded by Canadian users, KuCoin of course is in compliance with CRA’s view and does report to the CRA.
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Can CRA Track your Cryptocurrency Trading on Kucoin?
It might be possible and not too difficult for CRA to do this because once a cryptocurrency exchange is registered with FINTRAC in Canada, a copy of your government-issued ID and proof of address would be required with the ID been linked to your account and wallet addresses on the exchange.
However, since most blockchains are public, anyone can view wallet addresses and their activity, with CRA following your transactions through that means, linking your wallets to your name as well. Hence, the big catch is when you cash out to your bank account; this can help CRA to get additional traceable information.
On the other side, the opposite might be the case if you use a decentralized exchange or one that does not comply with FINTRAC regulations, as CRA may not be able to follow up on your trading activities. In this case, you can purchase crypto on an exchange and send it to another wallet to do whatever you want with it. But know that CRA will probably wants to know where your money is coming from if you eventually sell the crypto and transfer the money to your bank account.
How would you Report Taxes on your Kucoin Transactions?
As KuCoin offers a vast and many crypto investment options that ranges from buying and trading to futures and mining, it might yet be unable to provide tax forms and documents, but the company does provides two easy ways to export transaction and trade history. The two ways are either through API or CSV file, and KuCoin does this by pairing with Koinly through API or CSV file import to make reporting your crypto taxes easy. Once they get paired and connected, Koinly now becomes the ultimate KuCoin tax tool, as Koinly calculates your KuCoin taxes based on your location and generate your EOFY tax report, all within 20 minutes. Hence, all youll just need to do at tax time is to download your KuCoin tax statement from Koinly and file it with your local tax authority, and with this you’re done.
Calculate Your Crypto Tax:
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Final Thought
It is of course necessary to pay taxes on all KuCoin’s activities, in line with CRA whose view was to treat cryptocurrency as a commodity. It’s therefore recommended that you abide by Canadian tax laws; this of which the CRA won’t take lightly with issues of undeclared income or capital gains capable of putting anyone in serious trouble. KuCoin via Koinly has provided you with a means to export your taxes, it is therefore not reasonable to leave your tax returns until the last minute if you have many transactions that spans through a long period of time.