- The correspondence discusses the application of GST/HST to cryptoasset mining activities via mining pools.
- HST rates are 13 percent in Ontario and 15 percent in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island, with a proposed decrease in Nova Scotia to 14 percent in 2025.
- GST is 5 percent in the rest of Canada.
- The inquiry seeks clarification on whether Canadian computer service providers in the cryptoasset industry can claim input tax credits on GST/HST paid on expenses after February 4, 2022.
- Mining activities involve computer service providers contributing computing resources to a mining pool managed by an operator to validate transactions on the blockchain.
- A block reward is received when a mining pool adds a block to the blockchain, consisting of transaction fees and a block subsidy.
- The block reward is deposited into the wallet of the person or operator who computed the correct hash.
- Common payment methods for computing contributions include Pay-Per-Share and Full-Pay-Per-Share.
Source: taxinterpretations.com
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