CRA indicates that crypto miners generally had the change-in-use rules apply to their capital properties on May 18, 2019

CRA indicated that as a result of the legislative change, made in 2021 but effective May 18, 2019, to make “virtual payment instruments,” such as Bitcoin, financial instruments, the change-in-use rules generally would apply on that date to the capital properties of miners, given that prior to that date they would be regarded by CRA as being engaged in commercial activity. Thus, as a substantive matter, they were required to remit GST/HST equal to the properties’ basic tax content (essentially, the GST/HST previously paid on the properties’ purchase).

CRA made this point in a very brief, almost sheepish, manner – so that it may recognize that it may now have legal and practical difficulties in purporting to require those who have already filed their return for the relevant 2019 reporting period, to now refile so as to report an application of the change-in-use rule.

Neal Armstrong. Summaries of GST/HST Notice No. 324, Proposed Amendment Addressing Mining Activities in respect of Cryptoassets, February 2023 under ETA s. 188.2(1) - virtual payment instrument, mining activity, cryptoasset, s. 188.2(2), (4), (5), s. 1123(1) – recipient, s. 141.04(4) and s. 200(2).