Cryptocurrency Taxes in Canada

The Canada Revenue Agency (CRA) treats cryptocurrency as a commodity, which means you owe taxes when you sell, trade, or earn crypto. Profits from trading are subject to capital gains tax, while staking rewards and mining income count as regular income. Whether you're an active trader or a long-term holder, understanding these rules will help you stay compliant and avoid overpaying. Here's what you need to know for the 2025 tax year.

You create a taxable event when you:

• Sell cryptocurrency for CAD
• Trade one cryptocurrency for another
• Spend cryptocurrency on goods or services
• Gift cryptocurrency in certain situations

Tax Rule: 50% of your net capital gains are taxable at your personal income tax rate.

The CRA treats certain cryptocurrency earnings as regular income. This includes:

• Staking rewards
• Mining rewards
• Referral bonuses
• Most airdrops
• Cryptocurrency earned from work or services

Tax Rule: Report as business or personal income at your full tax rate.

Since every trade creates a tax obligation, you need to track:

• Cost basis (what you paid for the cryptocurrency)
• Acquisition date
• Value at disposal (sale/trade)
• Gains/losses per transaction

Manual tracking is tedious and error-prone. Most investors use tax software to handle this automatically.

• Koinly - Popular choice for Canadian cryptocurrency investors with automatic exchange syncing
• Coin Ledger - Comprehensive tax reporting with CRA compliant forms

Here are legal ways to reduce what you owe:

• Tax-loss harvesting: Sell losing investments to offset your gains
• Hold long-term: Capital gains (50% taxable) beat income tax rates on frequent trading
• Keep accurate records: Good documentation helps you claim every deduction and avoid overpaying
• Trade less: Every trade is taxable, so fewer trades means simpler taxes

• Tax year: January 1 – December 31
• Filing deadline: April 30 (or June 15 if self-employed)
• Payment deadline: April 30

Koinly and Coin Ledger automatically calculate your gains, losses, and income for Canadian tax filing. They make tax season significantly less painful.

For more information about cryptocurrency taxation in Canada, refer to these official CRA resources:

• CRA Guide to Cryptocurrency and Taxes
• Guide for Cryptocurrency Users and Tax Professionals

Want to avoid crypto taxes entirely? Hold cryptocurrency ETFs in a TFSA or RRSP. This gives you exposure to Bitcoin and Ethereum without triggering capital gains tax when you sell. It's one of the smartest tax strategies available to Canadians.

Here's how it works:

• TFSA: All gains are completely tax-free, and withdrawals are not taxed
• RRSP: Gains grow tax-deferred until withdrawal (when taxed as income)
• FHSA: First Home Savings Account also provides tax-free growth for eligible buyers

Several cryptocurrency ETFs are available on Canadian exchanges and eligible for registered accounts:

• Bitcoin ETFs: Purpose Bitcoin ETF (BTCC), CI Galaxy Bitcoin ETF (BTCX), Fidelity Advantage Bitcoin ETF (FBTC)
• Ethereum ETFs: Purpose Ether ETF (ETHH), CI Galaxy Ethereum ETF (ETHX), Fidelity Advantage Ether ETF (FETH)
• Multi-Asset Crypto ETFs: Purpose Bitcoin & Ether ETF (BTCE), CI Galaxy Multi-Crypto ETF (CRYPTO)

Why This Works:

• Zero capital gains tax in a TFSA; tax-deferred in an RRSP
• No transaction tracking required for taxes
• Professional security and custody
• Simple to buy through your brokerage account
• Fully regulated by Canadian authorities

Trade-offs:

• Annual management fees (typically 0.40% - 1.00%)
• You don't own the actual crypto (can't transfer to a wallet)
• Limited to major coins like Bitcoin and Ethereum
• Constrained by TFSA/RRSP contribution limits

ETFs in registered accounts work best for long-term investors who want simple, tax-advantaged crypto exposure. But if you want to actually own and control your crypto, transact with it, or invest in smaller altcoins, you'll need to buy directly and handle the tax tracking yourself.