Non-fungible tokens (NFTs) exploded in popularity from 2021 to 2022 and remain a significant part of the crypto ecosystem. For Canadians who bought, sold, or created NFTs, understanding the tax implications is essential. The CRA has not issued specific NFT guidance, but the general principles of Canadian tax law apply clearly. This guide covers everything Canadians need to know about NFT taxes in 2025.
NFTs are unique digital tokens on a blockchain representing ownership of a digital (or sometimes physical) asset. Despite their novelty, the CRA does not need special rules for them — existing rules for property dispositions apply.
The CRA treats NFTs similarly to other cryptocurrencies and digital property: they are capital property if held as investments, or inventory if created/traded as a business.
Purchasing an NFT is generally not a taxable event itself. However, the purchase is typically made with cryptocurrency (most NFTs trade in ETH). Using cryptocurrency to buy an NFT is a disposal of that cryptocurrency, which may trigger a capital gain or loss on the crypto used.
For example, you buy an NFT for 1 ETH when ETH is worth $2,000 CAD. If your ACB for that 1 ETH was $1,500, you have a $500 capital gain on the ETH disposal, plus $2,000 as your ACB for the NFT.
If you bought an NFT as a long-term investment or collectible — similar to buying art — and later sell it at a profit, the CRA is likely to treat the gain as a capital gain. Only 50% of the gain is included in your taxable income.
Factors suggesting capital treatment:
If you regularly buy and sell NFTs with the intent to profit — flipping NFTs as a primary or significant income activity — the CRA will likely treat all profits as business income. 100% of profits are taxable, but expenses like marketplace fees, gas costs, and research tools are deductible.
Factors suggesting business treatment:
If you are an artist, creator, or developer who mints and sells NFTs:
Creator NFT income is reported on T2125 (Statement of Business Activities) or through your corporate tax return if applicable.
Many NFT smart contracts pay the original creator a royalty (typically 2.5%–10%) each time the NFT is resold on secondary markets. These royalties are taxable income when received. They are generally treated as business income for the creator.
Gas fees paid in ETH to mint, buy, or sell NFTs are part of your transaction costs and should be added to your ACB (for purchases) or deducted from proceeds (for sales). They are not separately deductible as expenses unless you are operating as a business.
If you receive an NFT as a gift from someone other than a spouse, or win one as a prize, the fair market value at the time of receipt may be taxable as income. Consult a tax professional for the specific facts of your situation.
If you hold NFTs on foreign platforms (e.g., OpenSea, which is U.S.-based) and the cost of your foreign-held digital property exceeds $100,000 CAD, you may need to file Form T1135. The applicability of T1135 to NFTs is debated but erring on the side of caution is advisable for large holdings.
Keep records of:
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