Canada crypto tax guide: What you owe and how to file

If you were concerned that 2026 would be the year the CRA finally took a bigger bite out of your crypto profits, you can relax a bit. Although the federal government had proposed increasing the capital gains inclusion rate, the proposal was first deferred and was later canceled on March 21, 2025. As a result, the 50% inclusion rate remains in place for the 2025 tax year.

However, the CRA’s visibility into crypto activity continues to grow. New reporting rules and stronger exchange data-sharing requirements make this a critical year to keep your records accurate.

In this guide, you’ll learn how Canada crypto tax rules apply to investors, when profits are treated as capital gains versus business income, which transactions are taxable, and how to report your activities correctly. All dollar amounts are in Canadian dollars (CAD) unless otherwise stated.

Is crypto taxed in Canada?

Yes, crypto activity is taxed in Canada. The CRA classifies digital assets as commodities. Because crypto is treated as property rather than currency, every time you dispose of crypto, you may trigger a taxable event. A disposition may include selling, trading, spending, gifting, or transferring ownership of assets.

How your crypto is taxed in Canada depends on the nature of your activities. If you invest occasionally and hold crypto for growth, your profit is usually treated as capital gains. If you trade frequently, operate like a business, or mine crypto commercially, your profits may be considered business income.

The CRA evaluates several factors when determining whether your crypto trading is an investment or business activity. The agency looks at transaction frequency, time spent trading, intention to profit from short-term movements, and resemblance to a commercial enterprise.

How much tax do you pay on crypto in Canada?

There’s no flat crypto tax rate in Canada. If your crypto activity results in capital gains, the 50% inclusion rate applies, which means only half of your capital gains are included in your taxable income. That included portion is taxed at your marginal income tax rate. If your crypto is considered business income, 100% of the profit is taxable at your marginal tax rate.

For example, if you buy Ethereum (ETH) for $3,000, and you later sell it for $5,000 after a long-term investment, your $2,000 profit is treated as capital gains, and only $1,000 is taxable. But if you actively trade ETH every day and generate the same $2,000 profit as part of a trading strategy, the CRA may classify the entire amount as business income.

Here’s a quick overview of federal tax brackets for the 2025 tax year. Keep in mind that provincial taxes apply separately and can increase your total effective tax rate.

When and where do you pay crypto taxes?

You’ll report your cryptocurrency taxes annually on your T1 individual income tax return. The Canadian tax year follows the calendar year, running from January 1 to December 31.

For the 2025 tax year (filing in 2026):

• Most individuals must file taxes by April 30, 2026
• Self-employed individuals generally have until June 15, 2026 to file
• Any tax owed is due by April 30, 2026, even if you have until June 15, 2026 to file

Who collects crypto taxes?

The CRA is responsible for enforcing and collecting crypto taxes. Canada is moving toward broader crypto-asset reporting under the Crypto-Asset Reporting Framework. Under the Budget 2024 proposals, 2026 would be the first calendar year covered by CARF, with reporting and information sharing expected to begin in 2027. That said, even before CARF applies, the CRA can still request records during an audit and has increased its focus on crypto compliance.

How are crypto gains and losses taxed in Canada?

When you dispose of crypto, you may realize either a capital gain or a capital loss based on the difference between what you received and your average cost, calculated using adjusted cost base (ACB).

Which cost basis methods can you use?

The CRA requires you to use the adjusted cost base (ACB) method for identical crypto-assets, which means averaging the cost of all identical units you own. You can’t choose other cost basis methods like first-in, first-out or last-in, first-out.

ACB works by pooling all your purchases of the same crypto-asset to calculate a running average cost per unit. Each crypto-asset has its own separate ACB pool.

For example, if you buy one Bitcoin (BTC) for $92,000 and another BTC for $90,000, your ACB is $91,000, the average cost of each BTC. When you later sell one or both BTCs, you’ll use that average to determine your gains or losses.

What’s the formula to calculate capital gains?

Here’s how to calculate your capital gain:

Capital gain = proceeds of disposition – ACB – outlays and expenses

• Proceeds are what you received in Canadian dollars
• ACB is the average cost of identical units, including acquisition fees
• Outlays and expenses include transaction fees on dispositions

For example, if you bought 1 ETH for $2,000 and later bought another ETH for $3,000 and paid a $200 fee, your total ACB for your ETH holdings would be $5,200. Your ACB for each unit of ETH would be calculated as follows:

ACB per unit = 5,200 / 2 (number of units acquired) = $2,600

If you then sell one ETH for $4,000 and pay $100 in fees, here’s how you’d calculate the gain:

Capital gain = 4,000 (proceeds) – 2,600 (ACB) – 100 (expenses) = $1,300

What are the capital gains tax rates?

Canada doesn’t use a fixed capital gains tax rate. Instead, your gains are included in your income for the year. A 50% inclusion rate is applied to your net capital gains, which means only half of your net capital gains are included in income and taxed at your marginal rate. So in the above example, only $650 of the $1,300 capital gain would be included in your taxable income.

Can you report crypto losses?

You can report capital losses to reduce your tax burden. In addition, if your capital losses exceed your capital gains during a tax year, you can carry losses back up to three years or apply them forward indefinitely.

To prevent taxpayers from claiming artificial losses, the superficial loss rule can apply if you (or a person affiliated with you) sell a crypto asset at a loss and acquire identical property during the period that begins 30 days before the sale and ends 30 days after the sale.

In that scenario, the loss is denied for now, and the denied amount is added to the adjusted cost base of that asset. This defers the tax benefit until you later dispose of the property in a transaction that is not subject to the superficial loss rule.

Let’s say that on December 15, you sell one BTC at a $10,000 loss to offset your gains. On December 20, the price dips further, and you buy one BTC. Because you repurchased an identical property within 30 days, you can’t use the loss to lower your taxes this tax year – instead, you’ll add $10,000 to the adjusted cost base for your BTC holdings.

Is stolen or lost crypto taxed?

If your cryptocurrency is lost or stolen, you may be able to claim a capital loss depending on the facts. You’ll have to provide documentation showing your ownership and proof of loss, and also explain why recovery isn’t possible. The CRA expects you to keep detailed records to support any position you take on your return.

What crypto transactions are taxable?

Crypto transactions can be taxed either as capital gains or as income, depending on the nature of the activity. Knowing which treatment applies is essential because it affects both how much tax you pay and how you report it. With that in mind, here’s when you pay tax on crypto in Canada as a capital gain.

Selling crypto for fiat

The most common taxable event is exchanging BTC or altcoins for fiat currency, such as Canadian dollars. When you do this, you’ll calculate the gain or loss by comparing your selling price and your ACB at the time of sale.

Spending crypto on goods or services

The CRA views spending cryptocurrency as a barter transaction. For example, if you buy a laptop with BTC, you’re disposing of your crypto for the fair market value of that laptop.

Trading crypto for another token

Swapping one digital asset for another is a taxable disposition. If you exchange ETH for Solana (SOL), that is considered disposing of your ETH at its fair market value in Canadian dollars.

NFT sales

The CRA treats non-fungible tokens (NFTs) as property, so selling or exchanging an NFT for crypto or fiat is a taxable event.

Gifting crypto

Gifting crypto is considered a deemed disposition at fair market value. The transaction is treated as if you sold the crypto for its current Canadian-dollar value. So you must report any resulting gain, even though you didn’t receive cash. An exception may apply if you transfer crypto to your spouse or common-law partner.

What’s considered taxable income?

In some cases, receiving crypto is treated as taxable income instead of capital gains, depending on the frequency of your activity and the intent behind it.

Staking rewards and referral bonuses

Staking rewards and referral bonuses are generally considered income when received. You must report the fair market value of these rewards in Canadian dollars at the time you gain control over them.

Crypto mining

The tax treatment for crypto mining depends on the facts and the scale of your operation. The CRA determines on a case-by-case basis whether your mining activity is a personal activity or a business activity. If your mining activity is a business, your mining rewards must be included in your business income, and related expenses may be deductible, subject to the usual rules. If your mining activity is a personal activity rather than a business, you generally do not include the value of mining rewards in income when received. However, a later sale or other disposition can still trigger tax consequences.

DeFi activity

Participating in liquidity pools, yield farming, or other DeFi activity can be complex, and the tax treatment depends on the legal and economic substance of each transaction. A DeFi transaction may trigger income, a capital gain or loss, or another taxable event depending on what you actually did—for example, whether you disposed of one crypto-asset, received a reward, or transferred assets in a way that changed your beneficial ownership. Because the CRA provides limited guidance on decentralized finance (DeFi) activities, it’s important to keep meticulous records of every transaction to ensure compliance.

How is crypto income valued?

You have to report all crypto income in CAD, and use the fair market value of each asset at the time of receipt. If the fair market value is shown in a foreign currency such as USD rather than CAD, you can convert it to CAD using an exchange rate acceptable to the CRA, such as Bank of Canada rates. Keep records showing how you determined both the crypto-asset’s fair market value and any currency conversion, and use a consistent method.

What tax rates apply to crypto income?

Crypto earnings are added to your total annual income and taxed at your marginal rate. Federal tax rates range from 14.5% to 33%. When you add provincial taxes, your total rate could exceed 50%, depending on your bracket and location. If your crypto activity is carried on as a business, additional tax and compliance obligations may apply depending on your circumstances.

What other taxes should you know about?

Canada doesn’t have a wealth tax, and you aren’t taxed for owning a large amount of cryptocurrency. Additionally, goods and services tax (GST) and harmonized sales tax (HST) generally don’t apply to the purchase or sale of cryptocurrency itself. However, if you run a business that provides crypto-related services or accepts crypto as payment, you may have GST/HST obligations.

Canada also lacks a formal inheritance tax, but when a person dies, a deemed disposition may occur. This means the deceased person is considered to have sold their assets at fair market value immediately before death, which may trigger capital gains taxes on the final return or in the estate, depending on the circumstances.

Which crypto transactions are not taxable?

Several crypto activities allow you to manage your portfolio without immediate tax consequences.

Buying crypto with CAD

Purchasing cryptocurrency with Canadian dollars isn’t a taxable event. This transaction is still important because it establishes your initial ACB, which you’ll use to calculate gains in the future.

Transferring crypto between your own wallets

Moving your tokens from an exchange to a hardware wallet or between two crypto wallets you own is tax-neutral. Because ownership doesn’t change, there’s no disposition. But again, you should still track these transfers to make sure your cost basis remains accurate across platforms.

Holding crypto

Keeping your cryptocurrency in a wallet is not taxable; you only owe tax when you realize gains through a disposition. Even if there’s a bull run and your portfolio grows significantly in value, you don’t owe anything to the CRA until you sell, trade, gift, or spend your assets.

Where should you report crypto taxes?

The CRA expects detailed records of transactions, values, and dates. You’ll need to consolidate data from every exchange and crypto wallet you used during the year to ensure that your Canadian dollar values are accurate.

What tax forms should you use?

You’ll report your crypto activities on your T1 individual income tax return. Depending on your activity, you may also use the following forms:

• Schedule 3: This form is where you’ll report all capital gains and losses. You’ll report the relevant proceeds, adjusted cost base, and outlays or expenses for your taxable dispositions.
• Form T2125: If the CRA classifies your activity as business income (such as commercial mining or professional day trading), you’ll use this form to report that income.
• Cryptoasset Return: Some provinces have their own forms. Quebec residents may need to file this provincial form with Revenu Québec.

How do you file crypto taxes in Canada?

You have a couple of options for filing your returns:

• Certified tax software: Most individuals file using NETFILE-certified tax software
• Tax professional: If your portfolio includes complex DeFi strategies, high-volume trading, or business income, it’s a good idea to work with a certified professional accountant who specializes in crypto assets.

When is the crypto tax filing deadline?

For the 2025 tax year, the deadline for most individuals to file their T1 returns is April 30, 2026. If you’re self-employed, you have until June 15, 2026 to file, but you must still pay any taxes owed by the April 30 deadline to avoid interest charges.

Keep your crypto taxes simple and secure with CoinTracker

Canadian crypto tax rules rely on accurate ACB calculations and proper classification of gains and income. However, calculating what you owe for hundreds or thousands of transactions is nearly impossible to do manually. Even at smaller volumes, errors can lead to overpaying your taxes or triggering a CRA audit.

CoinTracker makes this process easier by connecting directly to your exchanges and wallets. Our platform automatically tracks ACB, identifies taxable dispositions, and calculates your capital gains and losses in line with CRA reporting requirements. In addition, CoinTracker generates a Schedule 3 for your federal return, so you can report eligible gains and losses more accurately.

Worried about reporting your crypto taxes? CoinTracker makes it simple. Join over three million users who trust us for hassle-free tax reporting. Start for free today.

Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.