This case could apply to Bitcoin business in Canada

front-ebay-1PLEASE PAY ATTENTION, this case from the Canadian Federal Court of Appeal could apply against Bitcoin trade exchange business in Canada.

eBay Canada Ltd. v. M.N.R., 2008 FCA 348, [2010] 1 FCR 145

Ebay was forced to give names and information regarding Canadian PowerSellers, to the Canada Revenue Agency (CRA), even if data was held on servers “outside of Canada”.

This led to a massive tax audit against many Canadian PowerSellers, who did not even know that they were “doing business” by buying and selling stuff on Ebay.  Most of them did not keep records of what they paid for inventory.

In the final decision, CRA taxed them on the total amount of sales, without taking into account what could have been paid for such inventory.

This is to say that I will not be surprised to see, in a very near future, CRA asking for tons of information and sensitive data from the Canadian Bitcoin exchange website business, even if the information is being held outside of Canada.

What are they going to do with this information? Well, they are going to do what they do best: TAX !

How, exactly? We must watch them and make sure that any audit will be performed in a fair and comprehensive manner to avoid past “Ebay” abuses. This would be a nice start.

Louis Sirois LL.B