- 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
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
