TL;DR: 30-Second Cheat Sheet
In Canada, cryptocurrency is treated as property under CRA rules, which means it can be taxed as capital gains (50% included in income) or business income (100% included), depending on your activity level. The filing deadline for individuals is April 30, 2025, with tax season opening on February 24, 2025. If you’re navigating complex reporting requirements, working with a cryptocurrency accountant in Toronto can help ensure accuracy, especially when tracking transactions using CRA-approved crypto accounting methods.
Quick Reference Table
| Category | Details |
| Tax Category | Property — taxed as capital gains or business income |
| Inclusion Rate | 50% of gains (100% for business income) |
| Filing Deadline | April 30, 2025 (season opens February 24, 2025) |
| Key Forms | Schedule 3 (capital gains), T2125 (business/contractor income), T1 General return |
| CRA Stance | Crypto is not legal tender; GST/HST may apply to certain transactions |
1. Is Crypto Taxable in Canada?
The CRA treats cryptocurrency as property, which means disposing of it, whether by selling Bitcoin, swapping alt coins, or using it for purchases, can trigger a taxable event. Understanding how crypto tax in Canada works is key, since the rules differ if your transactions are treated as capital gains versus business income. For personalized guidance, working with a cryptocurrency accountant in Toronto can help you stay on top of CRA reporting requirements and avoid surprises at tax time.
Property vs. Currency (CRA stance)
Because the CRA does not recognize cryptocurrency as legal tender, crypto tax in Canada is applied much like it is for other investments such as stocks or real estate. This means you must calculate gains using the Adjusted Cost Base (ACB) method, which adds transaction fees to your purchase price. For example, buying an NFT with Ethereum requires recording the ETH’s value at the time of purchase — something that falls under NFT and cryptocurrency tax rules in Canada. It also helps to understand how the CRA tracks crypto and exchange reporting so your records match their expectations.
Capital Gains vs. Business Income Tests
To decide how your cryptocurrency earnings are taxed, the CRA looks at factors such as trading frequency, the amount of time you spend managing assets, and whether you use borrowed funds. Someone holding Bitcoin for several years before selling may qualify for the 50% capital gains inclusion rate, while an active day trader could be taxed on 100% of their earnings as business income. If your returns include staking rewards, it’s important to understand the crypto staking tax rules, since these can affect both how your income is reported and the tax rate that applies. These rules are part of the CRA cryptocurrency tax updates for 2025, which also outline how NFTs, mining, and other digital asset activities are taxed.
GST/HST on Crypto Business Transactions
When cryptocurrency activity meets the CRA’s definition of a business, GST/HST registration can be required once taxable supplies exceed $30,000 in a 12-month period. This applies even if payment is received in digital assets, since the CRA treats such transactions as barter. Businesses need to know how GST/HST applies to cryptocurrency transactions including when registration is triggered and how to determine the fair market value of payments received. Understanding CRA cryptocurrency tax updates for 2025 also helps clarify how sales tax obligations align with income tax requirements.
2. Taxable Events List
When it comes to crypto tax in Canada, the CRA taxes more than just selling your cryptocurrency for cash. Several types of transactions are considered “taxable events” because they involve a disposition — meaning your ownership of the asset changes in a way that can trigger capital gains or business income. Knowing these events helps you report accurately and avoid missed entries on your return.
Common Taxable Events
| Event | Description |
| Sell | Converting crypto to Canadian dollars or another fiat currency. The difference between the selling price and your Adjusted Cost Base is taxable. |
| Swap | Exchanging one cryptocurrency for another (e.g., Bitcoin for Ethereum) is treated as if you sold the first coin and bought the second. |
| Spend | Using crypto to pay for goods or services — including freelance work or e-commerce purchases — can trigger a taxable gain or loss. |
| Earn | Receiving crypto as payment for services, staking rewards, or mining income is generally considered business or employment income. See CRA tax rules for cryptocurrency staking in Canada for more details. |
| Airdrop | Coins or tokens received for free (e.g., promotional airdrops) may be taxable when received and again when sold. |
| Hard Fork | New coins received as a result of a blockchain split can create taxable income when you dispose of them. |
| Gift | Gifting cryptocurrency may be treated as a disposition for tax purposes, requiring you to calculate fair market value at the time of the gift. |
| Barter | Trading crypto for another asset or service is taxed the same way as spending it — fair market value must be reported. |
Pro Tip: Whether you’re selling, swapping, or earning, accurate record-keeping is essential. Our blog explains how to track crypto for CRA reporting and links to other helpful guides for Canadian investors
3. 2025 Tax Rates & Provincial Surtax
Understanding the 2025 income tax rates in Canada is essential for cryptocurrency investors, miners, and business owners calculating their year-end liabilities. The federal government applies a tiered structure, while each province or territory adds its own tax rates and, in some cases, a provincial surtax that can significantly affect your final bill.
If you earn income through crypto-related business activities, whether that’s mining, staking, or providing blockchain services, consulting a cryptocurrency accountant in Toronto can help you understand your combined federal and provincial rates and ensure your crypto taxes are reported accurately.
Capital Gains Reminder
In Canada, only 50% of capital gains are taxable. This includes profits from selling cryptocurrency, NFTs, or other digital assets. Understanding the CRA’s approach to crypto asset tracking is critical if you’ve had multiple trades or use different wallets and exchanges.
Below is table showing 2025 federal and provincial tax rates side-by-side, so you can quickly see the combined marginal rate that applies to your income bracket.
Table: Federal + Provincial 2025 Tax Rates
| Province/Territory | Federal Rate Brackets (2025) | Provincial/Territorial Rate Brackets (2025) | Provincial Surtax (if applicable) | Combined Top Rate |
| Alberta | 14% – 33% | 8% – 15% | None | 48% |
| British Columbia | 14% – 33% | 5.06% – 20.5% | None | 53.5% |
| Manitoba | 14% – 33% | 10.8% – 17.4% | None | 50.4% |
| New Brunswick | 14% – 33% | 9.4% – 19.5% | None | 52.5% |
| Newfoundland & Labrador | 14% – 33% | 8.7% – 21.8% | None | 54.8% |
| Nova Scotia | 14% – 33% | 8.79% – 21% | Yes (10%–24%) | 54% |
| Ontario | 14% – 33% | 5.05% – 13.16% | Yes (20% & 56%) | 46.16% |
| Prince Edward Island | 14% – 33% | 9.5% – 19% | None | 52% |
| Quebec | 14% – 33% | 14% – 25.75% | None | 58.75% |
| Saskatchewan | 14% – 33% | 10.5% – 14.5% | None | 47.5% |
| North West Territories | 14% – 33% | 5.9% – 14.05% | None | 47.05% |
| Nunavut | 14% – 33% | 4% – 11.5% | None | 44.5% |
| Yukon | 14% – 33% | 6.4% – 15% | None | 48% |
4. Special Cases
Mining & Staking Income Rules
When you earn coins or tokens through mining or staking, that income is treated as ordinary business income at its fair market value on the day it enters your wallet. This value also sets your adjusted cost base (ACB) for future transactions.
If you want a deeper understanding, learn about how crypto staking is taxed. Any gains or losses from later sales, swaps, or use of those assets are calculated from that reset value, so keeping accurate, ongoing records is essential to ensure your reporting aligns with CRA requirements.
NFT Sales & Royalties
Under Canadian NFT tax rules, profits from selling non-fungible tokens can be treated as either capital gains or business income, depending on the frequency and intent of your transactions. Occasional, personal-use sales are typically reported on Schedule 3, while frequent or commercial activity — including earning royalties from NFTs — generally falls under T2125 Statement of Business Activities.
With the CRA’s enhanced ability to track blockchain transactions, it’s essential to maintain clear records. Insights from our guide on how the CRA tracks crypto can help determine which form to use and how to stay aligned with reporting requirements.
Crypto Earned as Salary or Contractor Pay
Under Canadian cryptocurrency payroll tax rules, the CRA treats digital assets received as salary or contractor compensation the same as cash. Employers must calculate withholdings for income tax, CPP, and, where applicable, EI based on the fair market value of the crypto on the payment date.
Contractors who are paid in cryptocurrency must include the amount as business income on their T2125 Statement of Business Activities and may need to remit their own CPP contributions. As the CRA expands its oversight under Canada’s evolving digital tax regulations, maintaining accurate valuations and payment records is critical.
5. Adjusted Cost Base (ACB) Tracking
Accurate ACB determines how much of your gain (or loss) is reported when you dispose of crypto. In Canada, most investors calculate ACB using the weighted-average method; consistency is easiest when records follow CRA-compliant accounting for digital assets across wallets and exchanges.
Weighted-average method vs. FIFO
Under Canadian rules, ACB is generally the weighted average of what you paid for all units of a particular asset (plus eligible costs) rather than FIFO. Each new acquisition adjusts the average cost per unit; disposals reduce units and ACB based on that average. This avoids cherry-picking lots and keeps treatment consistent year to year.
Including gas & trading fees
ACB should include direct costs of acquiring or disposing of the asset, such as exchange commissions and network (“gas”) fees. Omitting these expenses inflates gains. Record-keeping expectations are rising as oversight expands; with the CRA increasingly monitoring crypto activity through exchange reporting and blockchain analytics, fee entries and timestamps should be precise.
6. How to File Your Crypto Taxes
Required Forms & Schedules
For crypto tax in Canada, reporting usually combines standard income-tax forms with digital-asset details. Capital transactions, such as selling, swapping, or spending coins, flow to Schedule 3, while business-style activity—frequent trading, mining, staking, or NFT marketplace sales—is reported on T2125. Keeping ledgers consistent with CRA-compliant accounting for digital assets makes it easier to separate capital events from business income across wallets and exchanges. Disclosure of specified foreign property (cost exceeding $100,000 at any time in the year) may require T1135, depending on how offshore platforms or custodians hold assets. When staking or validator rewards are involved, aligning entries with Canadian rules on cryptocurrency staking income ensures the day-of-receipt value becomes the starting ACB for later disposals. For a step-by-step guide on managing your records and reporting accurately, read our blog on how to track your crypto.
Using Tax Software vs. Hiring a CPA
Many filers start by organizing transactions with tools that support ACB under Canada’s weighted-average method, then decide whether software alone is enough or a practitioner review is warranted. A clean export that follows best practices for tracking and reporting crypto transactions (wallet-by-wallet, fees included) reduces adjustments later, while complex cases—multi-chain DeFi, NFT royalties, staking operations—often benefit from a cryptocurrency accountant in Toronto familiar with CRA expectations.
Comparison snapshot
| Option | Best for | Strengths | Considerations |
| Koinly | Investors with multiple exchanges/wallets | ACB (weighted-average) support, CSV/API imports, capital gains reports | DeFi/NFT edge cases may need manual edits before filing |
| CoinLedger | Simple to moderate portfolios | Quick summaries, common exchange coverage, export to tax software | Limited automation on complex DeFi; check staking/NFT categorization |
| CPA (TMP) | Trading-as-business, miners/validators, NFT creators, mixed DeFi | Tailored categorization (business vs. capital), ACB corrections, form selection (Schedule 3 vs. T2125) | Higher cost than software, but more accurate and support with CRA. |
Tip: Regardless of the route, verify how staking, mining, and NFT revenue are categorized before exporting returns to prevent rework.
Filing Deadlines & Payment Options
For most individual filers, the personal return deadline falls at the end of April (moves to the next business day if it lands on a weekend/holiday); self-employed individuals can file by mid-June, though any balance is still due by the April deadline. Instalments (quarterly) may apply if prior-year balances were significant. Clear, timestamped records that match how the CRA tracks crypto help reconcile year-end totals, especially when multiple wallets or platforms are involved.
Payments can be made through online banking (payee “CRA”), My Account pre-authorized debit, or credit-card/payment processors; partial payments are accepted when arranging a plan. Where activity looks more like a business (frequent trades, mining, royalties), confirming the right form mix and sales-tax implications alongside Canada’s evolving digital-economy tax rules keeps income-tax and GST/HST reporting aligned.
7. Audit-Proofing Your Return
CRA red-flag checklist
With the CRA’s crypto-transaction monitoring expanding, certain patterns tend to attract follow-up. Use this quick scan before you file:
- Large GST/HST input tax credits (ITCs) versus reported revenue, or ITCs with thin documentation.
- Shareholder loans advanced from a corporation and not repaid on time, or with no clear business purpose.
- Missing slips or summaries (e.g., exchange CSVs, wallet summaries) where activity clearly occurred.
- Business vs. capital mismatch (frequent trading reported on Schedule 3 rather than T2125, or staking/mining treated as capital).
- ACB anomalies: negative/implausible ACB, FIFO used instead of weighted-average, or fees excluded.
- No GST/HST registration where crypto activity resembles a business and exceeds the small-supplier threshold.
- NFT royalties reported as capital instead of business, or totals that don’t reconcile to on-chain activity.
- T1135 gaps where foreign platforms/custodians push total cost over $100 k at any time in the year.
Keeping documentation consistent with CRA-compliant accounting for crypto reduces the chance of these items turning into audit queries.
Record-keeping tips: CSV exports, wallet screenshots
Audit-proofing starts with cryptocurrency accounting practices that capture transaction-level detail across every wallet and exchange:
- CSV exports from each platform (full date/time, asset, quantity, fees, TXIDs). Re-export after year-end to capture late corrections.
- Wallet screenshots + TXIDs to support significant trades, transfers, NFT mints/sales, and staking payouts.
- Fair-market-value evidence for each disposal (rate source + timestamp), and gas/trading fees logged directly into ACB.
- Staking/mining logs (validator dashboards, pool statements) with day-of-receipt CAD values for income entries.
- NFT royalty statements reconciled to on-chain activity and marketplace reports.
- Monthly ACB reconciliations (weighted-average method) and a year-end tie-out of in/out flows.
- Backups (cloud + offline) and a short data-dictionary explaining columns, wallets, tickers, and rounding rules.
Because enforcement is increasingly data-driven, aligning records with the CRA’s current crypto-tracking approach makes review requests faster to resolve.
8. Tax-Saving Strategies
Loss harvesting before Dec 31
Realized losses can offset realized gains in the same year, and unused net capital losses can carry back three years or forward indefinitely. In practice, year-end loss harvesting works best when records follow CRA-compliant accounting for digital assets so the ACB and fee details are clean across wallets. Watch the superficial loss rule (reacquiring substantially identical crypto within 30 days can deny the loss), and document prices at the time of sale. With how the CRA is tracking crypto in 2025 via exchange reporting and chain analytics, timestamps and fair-value sources matter.
Capital-gains reserve (up to 5 years)
When you dispose of a capital asset and won’t receive all proceeds until future years, a capital-gains reserve can spread recognition over as many as five years (the reserve must decrease annually, generally recognizing at least 20% per year). This can help smooth a large gain—useful where a buyer pays in tranches or an earn-out. For crypto deals structured this way, keep contracts, payment schedules, and valuation evidence alongside Canadian digital-asset tax rules, and ensure your ACB calculations remain consistent with accounting for crypto in Canada.
Incorporation pros/cons for active traders
If activity is business-like (high frequency, organized trading), incorporation can create rate deferral when profits stay in the company and are reinvested. That said, classification (capital vs. business income), compliance work, and cash-out taxes all affect the net benefit. A neutral way to frame it is: use the corporation when retained earnings fund ongoing trading or infrastructure; use personal filing when profits are withdrawn yearly. For policy changes that can affect this calculus—provincial rates, surtaxes, and digital-economy measures—keep an eye on Canada crypto-tax rule updates, and align bookkeeping with how the CRA is tracking crypto in 2025 so reclassification risk stays low.
9. FAQ
Below are concise answers to the crypto-tax questions Canadians ask most (wash sales vs. superficial loss, GST/HST, gifts, audits, etc.). A JSON-LD block is included so you can paste it into the page for FAQ rich results.
- Does Canada have a “wash sale” rule for crypto?
No. Canada uses the superficial loss rule: if you (or an affiliated person/entity) reacquire the same (or identical) crypto within 30 days before/after a sale and still hold it after the period, the loss is denied and added to ACB. - Are crypto-to-crypto swaps taxable?
Yes. Swapping one coin for another is a disposition at fair market value (FMV). You realize a gain/loss on the asset given up and start a new ACB for the asset received. - Do I charge or pay GST/HST on crypto transactions?
Buying/selling crypto itself is generally outside GST/HST; however, accepting crypto as payment for goods/services is taxed like a barter—GST/HST applies to the underlying supply using the crypto’s FMV at the time. - How are staking rewards taxed?
Typically as ordinary income when received, measured at FMV in CAD on that date. This amount becomes ACB for later disposals, which then create capital gains/losses. - How are airdrops taxed?
If an airdrop has a determinable FMV when received, it’s usually income on receipt and sets ACB. If not determinable, income may arise on disposition, with ACB often treated as nil. - How are hard forks taxed?
New units from a fork commonly have nil or low ACB at the outset; tax generally arises on disposition unless you’re running a business where receipts could be income. Keep transaction records and values. - Do I pay tax when I gift crypto?
Yes—gifting is a disposition at FMV for the donor (which can trigger a gain). The recipient’s ACB is typically that FMV. Canada doesn’t have a separate “gift tax.” - Do I need to file T1135 for crypto on foreign exchanges?
T1135 applies when specified foreign property cost exceeds CAD 100k at any time. Whether crypto positions or related accounts are reportable depends on facts (e.g., foreign custodial accounts, derivatives, funds). Document platform details and review annually. - How long can the CRA reassess crypto returns?
Generally three years from the notice of assessment for individuals (longer for many corporations). The period can be extended in cases of misrepresentation, negligence, or fraud. - What records should I keep—and for how long?
Keep CSV exports, wallet addresses/TXIDs, FMV sources, and fee details (gas/trading). Retain records for at least six years after the end of the tax year to which they relate.