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Crypto tax in Canada
Learn how to file crypto taxes in Canada and keep the CRA happy at tax time.
If you’ve bought, sold or earned 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.
Important note: This guide summarizes some of the CRA’s most important rules on cryptocurrency taxation. We’re not tax experts, and this information should not be taken as professional advice for your own circumstances. Crypto tax is an evolving space, and regulations may change over time. Consult a crypto tax professional to make sure you’re managing your taxes correctly.
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 stocks or other investments.
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 crypto buyer or if 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”.
- Transfer ownership. If you gift your crypto or donate it, the CRA treats it as a disposition at fair market value, which may result in a capital gain or loss.
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.
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.
- Capital gains: Occur when you earn money from selling or exchanging crypto that has increased in value.
- Capital loss: Occurs when you lose money from selling or exchanging crypto that has gone down in value. Capital losses can be used to offset capital gains, reducing the amount of tax you owe. They cannot generally be used to offset regular employment or business income.
- Business income: If your crypto activity is considered business income, then 100% of your net profit is taxable and capital gains inclusion rates don’t apply.
How crypto gains tax in Canada works
In Canada, you’re only taxed on the portion of capital gains included in your income, which is determined by the capital gains inclusion rate.
As of January 1, 2026, the capital gains inclusion rates for individuals are:
- 50% of annual realized capital gains up to $250,000 would be included in taxable income.
- 66.67% of annual realized capital gains above $250,000 would be included in taxable income.
For corporations and trusts:
- 66.67% of all realized capital gains would be included in taxable income, regardless of the amount.
This means that half or two-thirds of the money you earn from selling an asset is taxed, and the rest 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.
How to calculate your capital gain or loss
To calculate your capital gain or loss, follow these steps:
- Determine the adjusted cost base (ACB) of your crypto assets. This is what you paid to buy your cryptocurrency, plus related costs such as transaction fees and commissions.
- Subtract your ACB from the amount you disposed it for. Use the fair market value in Canadian dollars at the time you sold, traded or spent the crypto.
- Apply the inclusion rate. Which is 50% for gains up to $250,000 and 66.67% for gains above $250,000 for individuals or 66.67% for corporations.
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.
Example: Calculating capital gains
Let’s say you buy $25,000 worth of Bitcoin and pay a transaction fee of $20. To get your adjusted cost base, you would add those expenses together. This is how it breaks down:
Step 1. $25,000 (original purchase price) + $20 (fees) = $25,020 (adjusted cost base)
Let’s assume the value of Bitcoin goes up, and you sell your BTC for $36,000. Your total capital gain is the selling price minus the adjusted cost base of your Bitcoin. Your taxable capital gain is half that amount. This is what it looks like:
Step 2. $36,000 (selling price) – $25,020 (adjusted cost base) = $10,980 (total capital gain)
Step 3. $10,980 (total capital gain) ÷ 2 = $5,490 (taxable capital gain)
Your taxable profit on the sale is $5,490, which would be added to the rest of your income and taxed accordingly by the CRA. The other half of your capital gain — also $5,490 — can be pocketed tax-free!
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.
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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%–67.67%) 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 2026, and check this page for the latest provincial and territorial income tax rates.
| Tax rate | 2025 Taxable income | 2026 Taxable income |
|---|---|---|
| 14% | N/A | $58,523, plus |
| 14.5% | $57,375, plus | N/A |
| 20.5% | $57,375 – $114,750, plus | $58,523–$117,045, plus |
| 26% | $114,750 – $177,882, plus | $117,045–$181,440, plus |
| 29% | $177,882 – $253,414, plus | $181,440–$258,482, plus |
| 33% | $253,414+ | $258,482+ |
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.
If you sell crypto at a loss and then buy the same or identical crypto within 30 days before or after the sale, the capital loss cannot be claimed immediately. However, the denied loss is added to the adjusted cost base of the repurchased crypto, so the loss is deferred until it’s sold.
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 classifies 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.
- Take on debt to finance your crypto purchases.
- 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 your crypto activities are classified as business income, you must report the income and related expenses on T2125 Statement of Business or Professional Activities. This includes the proceeds from your crypto transactions and any legitimate business expenses, such as transaction fees, software, internet costs, electricity for mining or interest on funds borrowed to purchase crypto.
Business income is fully taxable, meaning 100% of your net profit is included in your income, and the capital gains inclusion rates (50% or 66.67%) don’t apply.
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, capital gains tax applies.
But if the CRA classifies your mining as a business activity, your mining rewards will be fully taxable as business income at their fair market value 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. If staking is business-related, the rewards are fully taxable as income on their fair market value at the time they’re credited to your wallet, even if you don’t sell them immediately.
But if the CRA classifies 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 2023 launch of PulseChain (forked from Ethereum) — don’t 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.
The cost of coins received from a fork is usually treated as zero, which can make your taxable gain higher when you sell them.
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 capital losses back up to three years or forward indefinitely to reduce your capital gains in other tax years.
- Open a Registered Retirement Savings Plan (RRSP). Contributions to an RRSP are tax-deductible, but you pay tax on withdrawals. You can’t hold crypto in an RRSP, but you can hold related assets like crypto ETFs or publicly traded crypto companies.
- Open a Tax-Free Savings Account (TFSA). Assets held in a TFSA can grow tax-free. Unlike RRSPs, TFSA contributions aren’t tax-deductible. Like RRSPs, you can’t hold crypto in a TFSA, but you can hold related assets like crypto ETFs or crypto mining stocks.
- 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 four-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. If your crypto activity is business-related, you may be able to deduct expenses such as transaction fees, commissions or professional accounting and tax advice. For personal crypto, only transaction costs can adjust the adjusted cost base of your assets.
- 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.
- Stay up-to-date. Tax rules for crypto can change, so make sure you check the CRA website or consult a tax professional regularly.
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
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