Non-fungible tokens create unique tax situations. The CRA applies existing rules — here's how they apply to NFTs.
The CRA has not issued specific guidance exclusively for NFTs, but existing rules for cryptocurrency and intangible property apply. NFTs are treated as property, and any sale or disposition triggers a taxable event. Whether the gain is a capital gain or business income depends on the nature of your NFT activity.
If you purchase an NFT as an investment or collector's item and later sell it at a profit, the gain is likely a capital gain — taxed at 50% inclusion. The same ACB rules that apply to cryptocurrency apply to NFTs.
Your cost basis includes the purchase price of the NFT plus any gas fees or transaction costs paid in acquiring it. When you sell, your gain is calculated as: Sale proceeds − ACB − selling fees.
If you create and sell NFTs as part of a business or with the primary intent to earn profit, the income from minting and selling NFTs is business income — taxed at 100% inclusion as self-employment income.
This also means you can deduct business expenses such as:
Frequent NFT flipping with the intent to profit may be classified as business income by the CRA — the same test applied to frequent crypto traders. If you buy and sell dozens of NFTs per year with no personal use of the assets, the CRA may deny capital gains treatment.
| Activity | Likely Tax Treatment |
|---|---|
| Buy and hold NFT as collector/investor | Capital gains (50% inclusion) |
| Create and sell original NFTs | Business income (100% inclusion) |
| Frequently flip NFTs for profit | Business income (100% inclusion) |
| Receive NFT royalties | Business income (100% inclusion) |
| Gift or donate an NFT | Deemed disposition at FMV |
If you purchased an NFT using ETH or another cryptocurrency, you have two taxable events:
Many NFT smart contracts pay the original creator a royalty (typically 5–10%) every time the NFT is resold. These royalties are business income for the creator and must be reported as income in the year received, at the CAD fair market value on the date of receipt.
The GST/HST treatment of NFTs is uncertain. If you are an NFT creator operating as a business with over $30,000 in revenue, you may have GST/HST obligations. The CRA has not specifically clarified whether NFT sales are taxable supplies under the Excise Tax Act. Professional advice is strongly recommended for creators with significant revenue.
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Get KOHO Free — Use Code 45ET55JSYAIf you sell an NFT for less than you paid, you have a capital loss (if classified as capital property). This can offset capital gains from crypto or other investments. If your NFT activity is business income, a business loss can offset all other income, including employment income.
NFTs held on foreign platforms (most major NFT marketplaces are US-based) may need to be disclosed on a T1135 if your total foreign property cost exceeds $100,000 CAD at any time during the year. The "cost" is what you paid for the NFT, not its current value.
NFT taxation in Canada follows existing commodity and business income rules. Whether you're a collector, creator, or trader determines how your profits are taxed. In all cases, meticulous record-keeping of transaction dates, amounts, and CAD values at time of transaction is non-negotiable for CRA compliance.