The Canada Revenue Agency treats cryptocurrency as a commodity, not currency. Here's what that means for your tax bill.
The Canada Revenue Agency (CRA) has been clear since 2013: cryptocurrency is a commodity, not legal currency. This distinction has enormous tax implications. When you sell, trade, or otherwise dispose of crypto, you may trigger a taxable event — just as you would selling shares of stock or real estate.
This applies to Bitcoin, Ethereum, and every other cryptocurrency. The CRA does not make exceptions for how popular or widespread a coin becomes. All crypto disposals must be reported on your Canadian tax return.
One of the most important distinctions in Canadian crypto tax is whether your gains are classified as capital gains or business income. This matters because they're taxed very differently:
| Tax Type | Inclusion Rate | Typical Scenario |
|---|---|---|
| Capital Gains | 50% of gain included | Occasional buying/selling as investor |
| Business Income | 100% included | Frequent trading, mining, staking |
If you buy Bitcoin and hold it for a year before selling, the CRA typically treats that as capital gains — only half your profit is added to your taxable income. But if you trade dozens of times a month with the intent to profit, the CRA may classify you as a crypto trader, making your gains 100% taxable as business income.
Many Canadians don't realize how many crypto activities trigger taxes. The CRA considers the following taxable disposals:
Not every crypto activity creates a tax bill. These are generally not taxable:
Your capital gain (or loss) is calculated as:
Proceeds of Disposition − Adjusted Cost Base (ACB) − Selling Expenses = Capital Gain or Loss
The Adjusted Cost Base is your average cost for all units of a particular cryptocurrency, including transaction fees paid at purchase. Canada uses the adjusted cost base method, meaning you track the average cost across all purchases — not first-in-first-out (FIFO) as in the US.
You buy 1 BTC for $40,000. Later you buy another 1 BTC for $50,000. Your ACB is $45,000 per BTC. You then sell 1 BTC for $60,000. Your capital gain is $15,000. Only 50% ($7,500) is added to your income. At a 33% marginal rate, you'd owe about $2,475 in tax.
The 2024 federal budget proposed raising the capital gains inclusion rate from 50% to 66.67% for gains over $250,000 annually for individuals. However, as of early 2025, the implementation of this change has been politically contested and may be reversed depending on the outcome of federal elections. Consult a tax professional for the most current rules before filing your 2024 return.
Canadian crypto investors typically use Schedule 3 (Capital Gains or Losses) on their T1 personal income tax return. If your gains are classified as business income, you report on the T2125 (Statement of Business or Professional Activities).
You must also file a T1135 Foreign Income Verification Statement if the total cost of your foreign assets (including crypto held on foreign exchanges) exceeded $100,000 CAD at any point during the year.
The CRA requires you to keep records for at least six years. For crypto, this includes:
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However, unlike in the US, Canada does not have a "wash sale" rule for crypto — you can sell at a loss and immediately rebuy without penalty.
If you received cryptocurrency as payment for goods or services, that amount is included in your income at the fair market value on the date you received it. Your cost basis for that crypto becomes the value you declared as income, and any future gain is calculated from there.
If you only bought and held crypto without selling, trading, or using it, there's no taxable event to report. However, you should still keep records of your purchases.
You cannot hold cryptocurrency directly in a TFSA. However, you can hold Bitcoin ETFs that trade on the TSX inside a TFSA — gains from those ETFs would be sheltered from tax.
The CRA's Voluntary Disclosures Program (VDP) allows you to come forward and correct past omissions, often with reduced penalties. Speak with a tax professional before taking action.
Crypto taxes in Canada are complex but manageable with good record-keeping. The CRA's position is clear: crypto is a commodity, disposals are taxable, and you must report your gains and losses every year. Whether you're a casual holder or an active trader, understanding these rules protects you from unexpected tax bills and CRA audits.