Canada Crypto Tax: How Much You Have to Pay in 2025

Canada treats cryptocurrency as a commodity, not legal tender. You have to pay either capital gains tax or income tax based on the nature and frequency of your crypto transactions. Your crypto income is fully taxable, while only half of your capital gains are.

While 2020 and 2022 were tumultuous periods for the cryptocurrency industry, Canada has become a crypto-friendly country for investors and businesses. It offers a stable economy, AI-driven financial solutions, and a popular destination for blockchain startups.

In this article, we provide a detailed review of Canada crypto tax, what has changed, and whether any crypto transactions are exempt from taxes.

Read more about:

• Is cryptocurrency taxed in Canada?
• How much do you pay for Canada crypto tax?
• Why is Canada best for crypto investors?

Yes, you must pay taxes in Canada for cryptocurrency. Unlike the Canadian dollar, crypto assets are not legal tender – they are a commodity, like property or stocks. The profit you earn from crypto will be taxed either as business income or capital gains. Canada taxes 100 percent of business income and 50 percent of capital gains.

In Canada, the Canada Revenue Agency (CRA) treats cryptocurrency as a commodity, not as legal tender. This means that cryptocurrency transactions are subject to either capital gains tax or business income tax, depending on how you’re using it.

Capital gains tax

When you buy and sell crypto as an investment or a hobby, you are subject to capital gains tax. This includes selling crypto, trading one cryptocurrency for another, spending crypto on goods or services, or gifting crypto. Canada taxes 50 percent of your capital gains. That means if you make a profit, you only pay tax on half of that profit at your marginal income tax rate.

Business income tax

Fully taxable activities are frequent and high-volume transactions, such as making ongoing profit, getting paid in crypto, mining rewards, etc. The Canada Revenue Agency (CRA) considers 100 percent of your business income from crypto transactions taxable. The business income is added to your total income and taxed at your marginal income tax rate.

How much you pay for Canada crypto tax varies based on your tax bracket category. Your income tax rates apply to your taxable income, which is your income after all eligible tax deductibles, credits, and exemptions. Here is an overview of the tax rates for the 2025 tax year.

Source: Canada.ca

Calculate your annual taxable income by taking all your regular earnings and adding 50% of your capital gains for the tax year. Taxes across Canadian provinces and territories (except Quebec) are calculated based on federal income tax.

Many Americans are moving to Canada to gain permanent residence due to economic opportunities, high living standards, and high quality of life. The universal healthcare system is a driving factor for this migration.

There are some tax breaks you can use to reduce expenses when paying taxes. These include:

• Tax-free income: Canadian citizens are eligible for a non-refundable tax credit known as the Basic Personal Amount (BPA). This tax break, valued at $15,705 in 2024, means you won’t pay tax if your income is at or below this level.
• Capital gain inclusion rate: Just half of your capital gains are subject to taxation.
• Spousal tax credit: If your spouse doesn’t fully use their personal tax allowance, you can claim their unused portion. For example, if your partner has no income for the year, you can claim their full $15,705

Cryptocurrency tax laws in Canada treat digital assets like property under the regulations of the Income Tax Act (ITA). The profit or income you earn from crypto activities is subject to income tax and divided into capital gain or business income tax. However, crypto losses can affect your taxable capital gains.

• Capital gains: If you buy and sell crypto for profit, those crypto capital gains are taxable income and must be reported on your annual income tax return. Crypto investors pay capital gains tax on 50 percent of their taxable capital gains, which are added to the tax return at the marginal tax rate.
• Business income: Frequent trades and large volumes of transactions that indicate business activity are considered business income. Any business crypto transactions that generate long-term profit are subject to business income tax. The profit’s full amount (100 percent) is taxed at the marginal tax rate based on your income and province.
• Crypto losses: You can use crypto losses to offset taxable capital gains. Because Canada treats crypto like property, crypto capital losses are treated like capital losses from other property types, like stocks and bonds. So, you can use the capital losses from your crypto investment to reduce the capital gains you’ve made from different capital assets.

Canada treats digital assets as a commodity, not currency, and uses the Adjusted Cost Base (ACB) method to calculate gains and crypto losses based on the fair market value. The Canada cost basis method accounts for the average cost of all identical crypto units you own.

A capital gain or crypto loss happens when you dispose of digital assets, like using crypto to buy goods or services, trading crypto for one digital currency to another, etc. You subtract your cost base from the proceeds of every trade. If it’s negative, then this is a capital loss.

If your net capital losses are more than your capital gains in a year, you can use those extra losses to reduce capital gains in past or future years. This is called “carrying back” or “carrying forward” your losses.

Countless foreign nationals choose to invest in Canada and open a blockchain business. While Canada doesn’t have a direct citizenship by investment program, it provides numerous business immigration pathways, which can lead to permanent residency.

According to our Global Intelligence Unit Report at Global Citizen Solutions, 76 percent of countries consider crypto assets legal, compared to 23 percent that have imposed some form of ban on crypto transactions, either partial or total. Canada supports blockchain innovation, making it a popular destination for crypto investors and businesses.

Thinking of investing in Canada? Check out the ultimate guide to Canada’s Start-up Visa.

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Before you file crypto taxes, make sure to:

• Collect all records of crypto transactions from last year.
• Determine which activity falls under capital gains tax versus business income tax.
• Use the Canada cost basis method to calculate your Capital gains, losses, and income.
• To report your capital gains (or crypto losses), file the Schedule 3 Capital Gains form.
• To report business crypto transactions, file the Form T2125.
• Create a detailed crypto tax report from all exchanges (e.g., date and time of transaction, type of transaction, fair market value, wallet address, crypto exchanges, documents for any airdrops, forks, or other crypto income).
• File crypto taxes with the Canada Revenue Agency (CRA).

Global Citizen Solutions is a boutique migration consultancy firm with years of experience delivering bespoke residence and citizenship by investment solutions for international families. With offices worldwide and an experienced, hands-on team, we have helped hundreds of clients worldwide acquire citizenship, residence visas, or homes while diversifying their portfolios with robust investments. 

We guide you from start to finish, taking you beyond your citizenship or residency by investment application. 

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