Understanding Crypto Taxes in Canada (2025)

Tax season is here! And if you hold crypto in Canada, you might find yourself wondering how to report your holdings.

You’re not alone. Crypto taxation has unique rules and challenges, and can feel complicated at first glance. But we’re here to help.

In this guide, we’ll break down:

• How crypto and taxes work in Canada
• What you need to know to stay compliant with the Canada Revenue Agency and provincial tax authorities
• What financial information you need to gather from Shakepay

Disclaimer: This post is for general informational purposes only and does not constitute legal, financial, or tax advice. Shakepay does not provide legal, financial or tax advice. Always consult qualified legal, financial or tax professionals for personalized guidance.

How is crypto taxed in Canada?

First things first: Yes, cryptocurrency is taxed in Canada.

The Canada Revenue Agency (CRA) treats cryptocurrency like a commodity and, therefore, it’s subject to taxation. Be sure to read the CRA’s information for crypto-asset users guide for more information.

Owning crypto itself isn’t subject to taxation, but (with the exception of Québec) you must report it in your tax return if you:

• Sell crypto and make a profit or a loss
• Use crypto to buy something 
• Trade one crypto for another
• Gift crypto

Basically, anytime your crypto changes form or ownership, you trigger a taxable event.

In Canada, your crypto transactions may be considered either business income (or loss) or capital in nature (capital gain or loss).

Business income vs. capital gain

Capital gain 

If you’re not actively trading crypto as a business and don’t have significant transaction volumes, then whenever you sell, trade, use crypto to buy something, or gift to someone, you’ll trigger a capital gain or loss.

This means: You’ll include 50% of the gain you made from a crypto transaction in your income and will pay tax on that amount at your marginal tax rate (determined by your tax brackets).

If you end up with a capital loss, you can only use it to offset capital gains. And if you don’t have any gains this year, you can carry the loss forward into future years, or even carry it back to offset gains from the previous three years.

Business income 

If you earn crypto through mining, staking, trading as a business, or as a payment for services you rendered, it can be considered business income. This means your crypto will be taxed as income and 100% of your net profit is taxable. 

Unsure if you’ll be taxed at the business income or capital gains level? The CRA judges whether you’re running a business on a case-by-case basis, but they also use the following parameters as common signs that you may have business income:

• Your trades are for commercial reasons
• You promote a product or service
• You show that you intend to make a profit from your trading
• Your crypto trading is repetitive or regular

If you’re still unsure if your crypto activities qualify as business income or capital gains, be sure to read the CRA’s information for crypto asset users.

How much tax do you pay on crypto in Canada?

The amount of tax you'll pay depends on the kind of transaction (business income or capital gain), and how much you earn. In Canada, we use a progressive tax system, which means that the tax increases as the amount of taxable income increases. So, how much tax you pay on crypto will depend on the tax bracket you fall into. 

There are different levels of federal and provincial or territorial tax brackets which have different rates of tax. Your provincial/territorial taxes are based on your place of residence as of December 31 of your filing year.

For Canada, the CRA is the only government organization that administers both federal and provincial/territorial taxes, except for the province of Québec, which administers its own taxes.

If you are a resident of Québec, take note: A brand new requirement for 2024 is that you’ll need to complete a Cryptoasset Return (form TP-21.4.39-V) and file it with your income tax return. 

Calculating your crypto taxes

Calculating your crypto taxes is easy, though it is a lengthy process, but we’re here to break things down for you. 

The CRA recommends calculating gains by comparing cost basis to fair market value. Here’s a general outline based on public CRA guidance: 

1. Determine cost basis: This is the original price you paid for the asset (including fees).
2. Adjusted cost basis: When the same type of crypto is purchased/earned at different points in time, the average cost basis method is used to calculate the adjusted cost basis. 
3. Identify the sale price: This is what your crypto was worth on the market at the transaction. It should be your proceeds of disposition.
4. Calculate capital gains or losses: To do this, simply subtract the cost basis from the sale price. Remember, only 50% of the capital gain is taxable in Canada, unless you meet the business income criteria.

How to report crypto taxes

To properly report your crypto taxes:

• In Canada: Use Schedule 3 of your T1 General Tax Return to report capital gains.
• In Québec: As mentioned above, if you’re a resident of Québec, you’ll need to complete Schedule G and form TP-21.4.39-V and file with your income tax return.
• For crypto income: Report business or self-employment earnings on T2125 (Statement of Business or Professional Activities) and Schedule L for Québec.
• GST/HST Considerations: If you run a crypto-related business, you may need to charge GST/HST and provincial sales tax on transactions – (in all cases you should consult an expert). 

Remember: 

• Business vs. investment: If your crypto activities are frequent and treated as a business, all profits are taxable as business income.
• Track income transactions: If you earned crypto through mining, staking, or payment, report its fair market value as income at the time of receipt (proceeds of sale).

Crypto tax software

Need help? Cryptocurrency tax software is available to simplify the reporting process, such as:

• Koinly
• Crypto Tax Calculator

Pro tip: Some crypto tax software allows you to sync your Shakepay account for automatic tracking.

These tools can help you calculate your taxable gains and losses, but we still recommend consulting a tax professional!

How to get your transactions in Shakepay 

For all Shakepay transactions, you must do your own filing. 

While Shakepay can provide you with your complete transaction history, we do not automatically file your transaction activity with the CRA or Revenu Québec

Here’s how you can get your complete transaction history in Shakepay:

• Go to your Settings in the Shakepay app
• Request transaction history
• Once you request your Transaction History, it will be sent to you via email!

That’s it! We’ll package everything up for you and send it over via email in a .CSV file.

You can also reach out to our Customer Support Team via the support chat and we can generate the Transaction History for you!

To find your monthly statements in Shakepay, do the following:

• Go to your Settings in the Shakepay app
• Select Monthly Statements
• Your monthly statements will be ready to go in a handy PDF form.

As always, you may want to consult a tax professional or accountant, as they have the expertise and knowledge to help you navigate tax laws and regulations.

Final thoughts

Handling crypto taxes doesn’t have to be overwhelming. By keeping good records, understanding taxable events, and using the right tools, you can ensure compliance while optimizing your tax liability. 

Remember: If you're unsure about specific tax situations, consult a tax professional specializing in cryptocurrency.

Staying informed and proactive will save you stress (and money) when tax season arrives! For more information, read up on our cryptocurrency and tax obligations guide.

FAQs about Canada cryptocurrency taxes

Disclaimer: The information provided in this article is for general informational purposes only and may not address every aspect of the topic. It is not intended to serve as tax, legal, investment, or other professional advice. Before making any decisions or taking action based on this content, we recommend consulting with a qualified tax professional to ensure your individual circumstances are properly considered and that you’re acting on the most up-to-date information.