Canada is witnessing the implementation of strict measures to control tax evaders, following numerous cases of tax evasion.

The federal government has announced the initiation of new and strict procedures and measures to combat potential tax fraud; to track transactions and grant the tax agency more authority to punish taxpayers who refuse to disclose the requested information.

The new federal budget includes stringent measures to capture some tax officials who assist clients in tax evasion, in addition to shedding light on donations to certain foreign charities registered in Canada and ways to benefit from these funds.

In recent years, the Canadian tax agency has faced a range of criticisms regarding its record in apprehending and prosecuting tax evaders, with critics stating that it has not done enough to catch more cases of tax evasion.

On another front, governments around the world are taking steps to exchange information with other jurisdictions to catch those who transfer money between different countries or who use advanced techniques to avoid taxes.

Finance Minister Chrystia Freeland, during the new budget in Canada, revealed the implementation of new international rules requiring more transparency in cryptocurrency transactions. Accordingly, Canada will implement cryptocurrency asset reporting starting in 2026, requiring cryptocurrency service providers, or those doing business in Canada, to begin submitting annual reports to the tax agency.

Service providers will also be required to disclose information about each client and each cryptocurrency asset, according to the budget, including exchanges between cryptocurrency and government-issued currencies such as the Canadian dollar, other cryptocurrency exchanges, and cryptocurrency transfers.

It is worth noting that those presenting cryptocurrency in Canada will need to provide the tax agency with information regarding each of their clients.