Is bitcoin subject to taxes in Canada

So, is bitcoin taxed in Canada? I heard that you only get taxed when you sell it, and it’s all about how much profit you made. But what if I buy Monero or Pirate Chain with it? Can they track that transaction and hit me with taxes? Like, do they even know if I sold it peer-to-peer? If it is taxed, is it based on the bitcoin value when I bought it compared to when I sold it, and what’s the tax rate? Appreciate any insights!

Hi , if you move this over to the legal section of the forum , you’ll probably get some decent answers there. https://bitcointalk.org/index.php?board=74.0 Obviously every country’s tax laws are different , but hopefully someone will be able to give you some advice in that section.

Yes, the simplest thing is not to look for an answer on the forum, but simply contact a tax consultant or lawyer. Ideally, it would be just to check the tax payment process of a professional company once so that there are no questions from the inspection later. And when you understand what algorithm of actions you will be able to accurately repeat it yourself. Here, of course, we will find the answer, but no one will answer for it in front of you, unlike professionals in the real world. This is my opinion.

It is taxed when you sold it already because here goes the gain. And usually, gains are always taxed and if you want to know more about taxation, it's either you to talk to someone who's living in Canada do and have done filed his taxation with his gains through bitcoin. And the other option that you can do is to contact the tax agency and have a consultation with any taxation professional. Well, some information are searchable through google. Like this one: Is Bitcoin Taxable In Canada?

You can get idea on these links. Crypto Taxes in Canada https://www.mondaq.com/advicecentre/content/3540/Bitcoin-Cryptocurrency-Taxation-in-Canada https://taxpage.com/cra-bitcoin-income-capital-gains-tax/ Mentioned out: "Cryptocurrency is taxed in Canada as either capital gains or as income tax, depending on whether your activity with cryptocurrency is considered to be as a business or not. 100% of business income is taxable, whereas only 50% of capital gains are taxable. "

To answer your question about buying Monero with Bitcoin yes it is still taxable and yes if Canada's Taxing authority is strict they have the capabilities to question your earnings through an audit just like how IRS is doing it. Keep in mind that taxation doesn't happen on what kind of money are using (Fiat currency/Crypto) but taxation (capital gains) happens through the fair market value during the point in time you have bought it and its fair market value after you have sold it so using any kind of currency through that trade is irrelevant as this won't be some kind of loophole for you.

What if you directly sell it for a privacy coin like pirate chain? There is no money made doing this, and do they even know where the bitcoin went? I would be using a decentralized no kyc p2p exchange to do this.

If you bought 1,000$ worth of Bitcoin and then sold/exchange it at a higher price let say 1,500$ worth of Pirate Chain (or any other cryptocurrency) then you basically made 500$ of capital gains. It doesn't matter if its not a fiat currency as long as you are selling your cryptocurrency at a higher price than the fair market value of it when you have bought it you still have "earned". You are basically thinking of tax evasion here and I don't know how the laws work in Canada and how harsh the penalty is for tax evaders but hiding your earnings will be illegal in most countries.

Theb has answered your question. I'll just add, after that what's next? you're still going to exchange that pirate chain into fiat do you? then the gain will still be existing no matter what will be the coins that you'll be trading after bitcoin. You'll still be taxed no matter what you trade as long as it's a gain.