Crypto tax in Canada

If you’ve bought or sold crypto in the last year, you might have to pay taxes. In this guide to crypto tax in Canada, we’ll explore the key info you need to know about how the CRA treats cryptocurrency.

Find out how crypto is taxed in Canada, how to figure out what you owe, which crypto-related expenses are tax deductible and how to cash out crypto without paying taxes in Canada.

Is cryptocurrency taxable in Canada?

Yes, crypto is taxed in Canada. The CRA treats crypto as a commodity for tax purposes, so it’s taxed similarly to other investments such as stocks.

This means crypto can be treated as income or as a capital gain, but your tax obligations vary depending on whether you’re a casual Bitcoin buyer or whether the profits you make from crypto are classified as business income.

You don’t need to pay tax if you simply hold crypto or buy cryptocurrency with Canadian dollars. Instead, cryptocurrency becomes taxable when you dispose of it. This happens when you:

• Sell or gift cryptocurrency. If you buy 1 Bitcoin for $100,000, then sell it later for $125,000, you’ve made a taxable gain of $25,000.
• Trade or exchange cryptocurrency for another cryptocurrency. You expect the price of Bitcoin to fall, so you use your Bitcoin holdings to purchase Ethereum. Even though no government-recognized currency like CAD or USD is used in the exchange, the amount you earn is still subject to tax law.
• Convert cryptocurrency to a government-issued currency like Canadian dollars. If you cash in your Bitcoin holdings for $100,000 and transfer the funds to your bank account, the dollar value of your crypto at the time you trade it is subject to tax law.
• Buy goods or services with cryptocurrency. Because cryptocurrency isn’t recognized as legal tender, the CRA views a transaction like this as “bartering”.

How is crypto taxed in Canada?

The type of tax you’ll pay depends on whether your crypto earnings are classified as business income or capital gains.

For most investors, capital gains tax usually applies. If your crypto earnings don’t fall within the scope of “business income”, then you must treat these earnings as capital gains on your personal income tax return. Here’s how it works:

• A capital gain occurs when you earn money from selling or exchanging crypto that has increased in value. In Canada, you’re only taxed on 50% of realized capital gains. (Capital gains are “realized” when you dispose of an asset and “unrealized” when you hold onto it.)
• A capital loss occurs when you lose money from selling or exchanging crypto that has gone down in value. Capital losses are tax deductible and can be used to reduce the income tax you owe the CRA.

How crypto gains tax in Canada works

In Canada, you only pay tax on 50% of any realized capital gains. This means that half of the money you earn from selling an asset is taxed, and the other half is yours to keep tax-free.

For example, if you buy or otherwise obtain 1 BTC worth $100,000, then sell or spend it when it’s valued at $110,000, you’ve realized a capital gain of $10,000. You would only have to pay income tax on 50% of this, or $5,000.

To calculate your capital gain or loss, follow these steps:

1. Determine the adjusted cost base of your crypto assets. This is what you paid to buy your cryptocurrency plus related costs such as transaction fees and commissions.
2. Subtract the adjusted cost base from the Canadian-dollar value for which you exchanged or sold your crypto.
3. Divide the resulting figure in half.

This amount counts as part of your income and will be taxed accordingly. Remember that you’re only taxed on crypto assets you dispose of. So, when calculating capital gains, don’t factor in the buying or selling costs of any cryptocurrency you’re holding onto.

How to report cryptocurrency on taxes

You’ll need to report crypto capital gains or losses on your income tax return. This can be done in the “Bonds, debentures, promissory notes, crypto-assets, and other similar properties” section on T1 Schedule 3 – Capital Gains (or Losses).

Get help from crypto tax software

Tax law can be complicated and confusing, and cryptocurrency taxation rules are still evolving. We highly recommend getting help from a trained tax professional to make sure you stay up-to-date and compliant with all the CRA’s rules. Be aware that not all tax professionals are familiar with handling crypto, so you should narrow your search to those with experience in digital assets.

Research and compare the best crypto tax software to help you keep on top of your transactions in the lead up to tax time. Check out the table below for crypto tax software options.

4 of 4 results

Pricing by tier (per year)	Supported exchanges
Koinly Crypto Tax Reporting	Free - Track 10,000 transactions with no tax report CAD$69 - 100 transactions + tax reports CAD$149 - 1,000 transactions + tax reports CAD$299 - 3,000 transactions + tax reports CAD$399 - 10,000+ transactions + tax reports	Supports all major exchanges	Koinly can produce detailed cryptocurrency tax reports in under 20 minutes. The basic plan only allows tracking and cannot generate tax reports.	Go to siteMore info	loading
CryptoTaxCalculator Cryptocurrency Tax Reporting	Free - 100,000 transactions but no tax reports CA$49 - 100 transactions + tax report CA$99 - 1,000 transactions + tax report CA$249 - 10,000 transactions + tax report CA$499 - 100,000 transactions + tax report	Supports all major exchanges	This Australian-made software helps you file a CRA-compliant crypto tax return and generates tax reports on all financial years.	More info	loading
CoinLedger Crypto Tax Reporting	Free ⁠— Unlimited US$49 ⁠— up to 100 trades US$99 ⁠— up to 1,000 trades Pro: $199.99 — 3,000 transactions Pro: $299.99 — 10,000 transactions Unlimited: $499.99 — 1,000,000 transactions	Supports all major exchanges	Connect your exchanges, import trades and download your crypto tax report within minutes.	Go to siteMore info	loading
CoinTracking Crypto Tax Reporting	Subscription Plans: Free - 200 transactions Pro: US$9.99 - 3,500 transactions Expert: US$15.99 - available for 20,000; 50,000 or 100,000 Unlimited: US$54.99 - unlimited transactions Lifetime Pricing Options: Pro: US$449 Expert 1: US$1099 - 20,000 transactions Expert 2: US$1499 - 50,000 transactions Expert 3: US$2299 - 100,000 transactions Unlimited: US$6699	Supports all major exchanges	Get 10% off upgrades to Pro or Unlimited accounts Track trades and generate real-time reports on profit and loss, the value of your coins and more. Two year and lifetime plans also available.	Go to siteMore info	loading

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Showing 4 of 4 results

What is the Canada crypto tax rate?

The tax bracket you fall into is based on the amount you earn, the province or territory in which you live and how many tax deductions you can claim.

You’ll need to add the taxable portion (50%) of any capital gains to your taxable income for the financial year. This will then determine your tax bracket and the marginal tax rate that will apply.

Check the table below for the federal income tax rates for 2025, and check this page for the latest provincial and territorial income tax rates.

Can I temporarily dispose of crypto to avoid capital gains tax?

No. The CRA has created the Superficial Loss Rule (Section 54 of the Income Tax Act), which makes it illegal to claim capital losses for an asset within 30 days of when it was sold. This is designed to prevent people from buying an asset, selling it to claim a capital loss and then rebuying it shortly afterwards.

Here’s how the Superficial Loss Rule breaks down for crypto:

If you buy crypto and resell it within…	And then buy back the same crypto within another…	Can you claim a capital loss?
0-30 days	0-30 days
0-30 days	31+ days
31+ days	0-30 days
31+ days	31+ days

Crypto business income tax

If the CRA classes your crypto earnings as business income, different tax rules apply. According to the CRA, you’re considered to be carrying on a business “if your course of conduct indicates that you are disposing of crypto-assets in a way capable of producing gains, with that object in view, and the transactions are carried out in a manner similar to a trader or dealer in securities”.

The CRA looks for signs that you may be carrying on a business to determine if your crypto profits were earned from business activity. Your crypto transactions may be classified as business activity if you:

• Extensively buy and sell cryptocurrencies.
• Only hold cryptos for a short period of time before selling.
• Have knowledge of, or experience in, crypto markets and spend a significant amount of time studying those markets.
• You take on debt to finance your crypto purchases.
• You advertise the fact that you buy crypto.

The line between personal and business activities is fuzzy in some places. For example, both individual investors and crypto businesses can engage in many of the same activities like mining, trading and lending. We recommend getting professional advice from a crypto tax specialist to find out how your situation should be classified.

How to report cryptocurrency business income on taxes

If you’re deemed to be carrying on a business, you’ll need to report business income from your crypto transactions. You can use the T2125 Statement of Business or Professional Activities to report your business income and expenses — get more details on what you need to do in the CRA’s guide T4002, Self-employed Business, Professional, Commission, Farming, and Fishing Income.

Mining and crypto tax in Canada

If you mine cryptocurrency, how you’re taxed varies depending on whether your mining activities are classed as a personal hobby or a business activity.

If mining is a hobby, you won’t need to pay income tax on the rewards you earn. But when you dispose of your coins, for example if you sell them for CAD, you will incur a capital gain.

But if the CRA classes your mining as a business activity, your mining rewards will be taxed as business income and you’ll also pay tax on capital gains when you dispose of your mining rewards. Your mining electricity and equipment costs can be claimed as tax deductions.

Staking and crypto tax in Canada

Just like mining rewards, staking rewards will also be taxed. You can typically expect to pay income tax on any staking rewards you receive. And when you dispose of those rewards, capital gains tax applies.

But if the CRA classes your staking as a hobby rather than a business activity, income tax won’t apply when you receive staking rewards, but capital gains tax will still apply when you dispose of them.

What about chain splits and hard forks?

In Canada, chain splits and hard forks — such as the Bitcoin Cash (BCH) hard fork in 2017 — do not automatically trigger tax. You don’t have to pay tax simply for owning crypto, even if your assets increase after a hard fork or similar event. You only pay tax when you dispose of crypto by sale, trade, exchange or some other method.

If you run a business that uses crypto, bear in mind that any changes to the value of your crypto count as changes to your inventory. You’ll need to make sure these changes are factored into the inventory value you report on your next business tax return.

How to cash out crypto without paying taxes in Canada

You don’t have to pay tax on crypto you’re holding onto. But the moment you dispose of it — either by selling it, trading it, exchanging it or some other way — you have to factor any gains or losses into your taxes. Here are five ways to avoid crypto taxes in Canada:

• Offset capital gains with capital losses. If you lose more than you gain, you can carry forward losses to offset gains in future years.
• Open a Registered Retirement Savings Plan (RRSP). Contributions to a RRSP are tax deductible, but you pay tax on withdrawals. You can’t hold crypto in a RRSP, but you can hold related assets like crypto ETFs.
• Open a Tax-Free Savings Account (TFSA). Assets held in a TFSA can grow tax free. Unlike RRSPs, TFSA contributions are not tax deductible. Like RRSPs, you can’t hold crypto in a TFSA, but you can hold related assets like crypto ETFs.
• Donate crypto. Crypto donated to a registered charity is tax deductible.

What if my cryptocurrency is lost or stolen?

You may be able to claim a capital loss or business loss if your crypto is permanently lost or stolen in some way. This includes losing evidence of ownership or losing an unreplaceable private key. However, if an item is replaceable, it likely won’t qualify as a loss for tax purposes.

Details you may need to provide to claim a tax loss

• The dates you acquired and lost the private key.
• The public wallet address linked to the private key.
• The total cost of acquiring the crypto that was later lost or stolen.
• The balance of your crypto wallet when you lost the private key.
• Proof that you actually owned the wallet (for example, statements of transactions linked to your identity).
• Possession of the hardware where the wallet is stored.
• Transfers to the wallet from a digital currency exchange where you hold a verified account, or where your account is linked to your identity in some other way.

What crypto tax records do I need to keep?

To calculate earnings and losses for both personal and business tax returns (and audits), you need to keep detailed records of all your crypto transactions. You can use software to track your trades and automatically generate reports on profits and losses. Some programs integrate with popular crypto exchanges to make your job even easier.

You’ll need to keep track of:

• The dates of the transactions.
• Receipts of the purchase or transfer of cryptocurrency.
• The value of the cryptocurrency in Canadian dollars at the time of the transaction.
• Digital wallet records and cryptocurrency addresses.
• The nature of each transaction.
• Crypto exchange records for any transactions you perform.
• Any accounting and legal costs associated with managing your taxes.
• Software costs related to managing your taxes.

If you’re a miner, you should keep the following records:

• Receipts for the purchase of cryptocurrency mining hardware.
• Receipts to support your expenses and other records associated with the mining operation, such as power, mining pool fees, maintenance costs, etc.
• Mining pool details and records.

Check out the CRA’s guide on keeping records for more information.

What if I fail to report my crypto earnings?

If you repeatedly fail to report $500 or more of your income to the CRA, you may end up being slapped with a penalty of 10% on the unreported amount. This applies to individuals, businesses, corporations and trusts. A “repeated failure” means a failure to report all your income more than once in a 4-year period.

If you haven’t reported all your income to the CRA — whether intentionally or by accident — you can avoid prosecution and maybe even some of the penalties and interest fees you owe by reporting through the CRA’s Voluntary Disclosures Program. Learn more here.

How to file crypto taxes in Canada: Top tips

There are several simple things you can do to make sure you stay compliant with the CRA’s regulations:

• Do your own research. Take a look at the CRA’s guide for cryptocurrency users and tax professionals to make sure you don’t miss any rules or guidelines that apply to your situation.
• Keep detailed records. Keep track of all your crypto transactions. This will make it easier to search for any information you need to find come tax time or in the event you get audited. Use crypto tracking software, or see if the exchanges you’ve used allow you to export your transaction information.
• Look for deductions. Are you eligible to claim any deductions for expenses related to your crypto transactions, such as transaction fees, commissions, brokerage fees or the costs of getting advice from a crypto tax professional?
• Disclose, disclose, disclose. Don’t assume that transactions made with Bitcoin and other cryptocurrencies are untraceable — they’re not. And don’t even consider “forgetting” to disclose the details of your crypto transactions. The government is getting increasingly watchful over the crypto industry, and you may be audited to check if you’ve been compliant.

Bottom line

Yes, you do have to pay crypto tax in Canada, but your tax obligations vary depending on whether your transactions are classed as capital gains or business income. Keeping detailed transaction records will make it a lot easier to manage your reporting requirements at tax time. And if you’re unsure about any aspect of crypto tax in Canada as it applies to you, speak to a tax expert.

Frequently asked questions about crypto tax in Canada

• Do you have to pay taxes on crypto?

  Yes, cryptocurrency is taxed in Canada. However, you don't need to pay tax when you buy crypto with Canadian dollars or simply hold a crypto asset like Bitcoin. Instead, you're taxed when you dispose of any crypto, such as if you sell it, change it to another crypto or use it to buy goods or services.

• Is Bitcoin taxable in Canada?

  Yes, all cryptocurrencies are considered digital assets by the CRA. As an asset, cryptocurrency is taxed like an investment. What matters are your profits and losses from buying and selling bitcoin, not how much the bitcoin you're holding is worth.

• Do I have to pay GST/HST on products or services that I purchase with cryptocurrency?

  Yes. According to the CRA, when taxable items or services are exchanged for cryptocurrency, the amount of GST/HST charged on the transaction is based on the fair market value of the crypto at the time it's exchanged. So, if you live in Ontario and a retailer agrees to let you buy a new sound system for $1,000 worth of Bitcoin, you'll be charged $130 sales tax (13% of $1,000). Even if the sound system is actually worth a different amount, sales tax is still calculated based on the value of the crypto received.

• What should I do if I have multiple types of cryptocurrency?

  If you have more than one type of cryptocurrency, you'll need to treat each type of cryptocurrency as a separate digital asset for tax purposes. This means all types of coins must be valued separately (for example, Bitcoin needs to be valued separately from Ethereum).

• I've traded on crypto exchanges outside Canada. Will I need to pay foreign taxes?

  Possibly. You may have to pay income tax in other countries as well as in Canada. However, many countries have tax treaties with Canada to prevent double taxation. Speak to a cryptocurrency tax specialist to find out exactly what rules and exemptions apply to your situation.

• How to claim crypto losses on taxes in Canada?

  Capital losses can be used to offset any capital gains you make from crypto transactions, reducing the total amount of tax you have to pay. Any losses or gains from your crypto transactions can be reported in the "Bonds, debentures, promissory notes, crypto-assets, and other similar properties" section on T1 Schedule 3 – Capital Gains (or Losses).

  Please note that if you're classified as carrying on a business, you'll need to report business income and expenses from your crypto transactions in the T2125 Statement of Business or Professional Activities.

• How long do I have to keep my crypto tax records?

  The CRA recommends keeping all tax records for at least 6 years after filing in case you get audited.

• Do you get taxed on crypto in Canada if you don't sell?

  Typically, no. If you buy crypto with Canadian dollars, you won't be taxed until you dispose of any crypto, such as by selling it or using it to buy goods or services. But there are some cases when you might be taxed without disposing of cryptocurrency, such as if you receive income from mining or staking rewards.

Written by

Tim Falk

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Tim Falk is a freelance writer for Finder. Over the course of his 15-year writing career, he has reported on a wide range of personal finance topics. Whether you're investing in stocks and ETFs, comparing savings accounts or choosing a credit card, Tim wants to make it easier for you to understand. When he’s not staring at his computer, you can usually find him exploring the great outdoors. See full bio

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