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?

Is cryptocurrency taxed in Canada?

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.

How is cryptocurrency taxed in Canada?

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 do you pay for Canada crypto tax?

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.

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Cryptocurrency Tax Breaks in Canada

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 credit on your tax return, directly reducing your taxable income.

Cryptocurrency Tax Laws in Canada

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.

How to calculate capital gains and losses in Canada?

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.

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Why is Canada best for crypto investors?

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.

Clear tax regulations

Canada has well-defined tax obligations for crypto assets, unlike other countries with vague regulations. Digital assets are property or commodities, divided into crypto capital gains and business income. These regulations make planning and fulfilling tax obligations easy for crypto investors.

Available services in cryptocurrency

Canada’s financial regulations have evolved to accommodate citizens with crypto income. Many restaurants, cafes, and shops accept digital assets. According to the 2024 Statista report, Vancouver (British Columbia) and Toronto (Ontario) have the highest number of crypto-accepting businesses in the country. These cities are major destinations for business crypto transactions.

Bitcoin ATMs in Canada

Bitcoin ATMs are available in major Canadian cities, such as Vancouver, Toronto, Calgary, Winnipeg, and Edmonton. They allow complete crypto transactions, such as buying cryptocurrency with cash or selling it for cash withdrawals.

Favorable tax obligations

Canada doesn’t impose different tax rates based on how long you hold your crypto. Buying (with fiat currency) and holding crypto is tax-free. Since cryptocurrency is a commodity, when you dispose of it by spending, swapping, selling, or gifting it, you only owe a capital gains tax on the profit you make.

How to report your Canada crypto tax?

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).

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Frequently Asked Questions About Canada Crypto Tax

Do you pay tax on crypto in Canada?

Yes, you are supposed to pay taxes on crypto because digital assets in Canada are commodities (like gold or oil). You pay capital gains tax or business income tax based on your investments. For example, if you dispose of your digital assets, then capital gains may apply. But if you do crypto exchange frequently and earn steady profit, you must pay business income tax.

Is Canada friendly to crypto?

Canada is friendly to cryptocurrency in some aspects. But it has strict policies and tax regulations. Many crypto trading platforms are authorized to do business with Canadian citizens, which creates a favorable business environment. With its strong focus on tech and innovation, Canada remains a top destination for blockchain startups.

How is crypto taxed in Canada?

Canada taxes crypto as a commodity. You pay capital gains tax or business income tax based on how you handle your cryptocurrency. If your taxable income falls into the capital gains tax, 50 percent of your profit is taxable. However, if your crypto activity brings you regular business income, 100 percent of that profit is taxed in Canada. Holding crypto or buying fiat currency is not a taxable event.

What is the crypto tax rate in Canada?

Canada crypto tax rate is divided into two categories: capital gains and business income. You pay 50 percent of capital gains and 100 percent of business income taxes. Capital gains mean you hold crypto as an investment, not part of a business. Business income tax applies to activities deemed as a business, which can provide employment income for anyone living in Canada.

What percentage of crypto gains are taxed in Canada?

Canada’s crypto tax percentage on capital gains is 50 percent of all profits. For example, if you buy Bitcoin for $10,000 and sell it for $12,000, your capital gain is $2,000. Half the gain is added to your income, and you pay tax based on your personal income tax rate. When you report crypto taxes, you are only taxed on your profits.

How are NFTS taxed in Canada? 

NFTs (Non-Fungible Tokens) are taxed when you sell them. In Canada, you either pay income or capital gains tax for all digital assets, including NFTs. If you are a casual investor, you pay 50 percent tax on capital gains. But if you are an artist, developer, or creator who mints and sells your own NFTs, the proceeds are almost always considered business income.

How is DeFi taxed in Canada?

You must report your DeFi (Decentralized Finance) activities as you would report any annual income from digital assets. This means most DeFi interactions will often trigger either income tax or capital gains tax, depending on the nature of the transaction and your intent.

How are crypto tax gifts taxed in Canada?

Crypto gifts are taxable for the person gifting, not taxable for the recipient, unless that recipient disposes of the digital assets. If the crypto increased in value between the time you obtained it and gave it away, from a tax standpoint, you disposed of that crypto at fair market value, then you must pay capital gains tax on the profit you earn.

How is mining crypto taxed in Canada?

Mining crypto is taxed as a commodity, and you pay taxes depending on whether you use it as a business or a hobby. If you mine crypto as a business, you pay business income tax. If you hold that mined crypto and later sell it for a profit, then the digital assets are subject to capital gains tax.

What happens if you don't pay taxes on crypto in Canada?

Canada has strict tax implications for tax evasion. You may face financial penalties if you go long enough without paying or owe a lot from crypto capital gains. If convicted of tax evasion, fines can range from 50 to 200 percent of the taxes owed. If you didn’t file your crypto taxes last tax season or previous years, you can apply for the Voluntary Disclosures Program (VDP).