Your Guide to Canadian Crypto Taxes 2025
As cryptocurrency adoption continues to grow, the Canada Revenue Agency (CRA) has established guidelines on how crypto activity should be taxed. This guide is designed to help Canadian businesses navigate the complexities of cryptocurrency taxation in 2025. By the end of this article, you will have a thorough understanding of how crypto is taxed in Canada and how to report it accurately for your company.
TL;DR
Understand CRA Rules for Crypto Businesses: Discover how the CRA classifies crypto activities (business income vs. capital gains) and why it matters for your corporate taxes.
Know Your Taxable Events: Learn what constitutes a crypto “disposition” and how to report transactions like sales, trades, and using crypto for purchases.
Get Record Keeping Right: Find out how accurate ACB calculations and documentation can shield your business from costly audits.
Avoid Tax Pitfalls and Leverage Savings: Uncover strategies to minimize your tax liability, from harvesting losses to timing your trades.
Navigate Compliance with Confidence: Explore key deadlines, foreign reporting requirements (like Form T1135), and how tools like Integral.xyz streamline the entire process.
Is Cryptocurrency Taxable for Businesses in Canada?
Yes, cryptocurrency is taxable in Canada. The CRA classifies crypto as a commodity, and any business activity involving it may trigger tax obligations. Unlike fiat currency, crypto transactions are treated as barter transactions, which means each event must be evaluated to determine its tax implications. Depending on the nature of your business activity, earnings from cryptocurrency may be categorized as either:
Business Income: This applies if your crypto activities (e.g., trading, mining, staking, accepting crypto as payment) are part of your commercial operations. 100% of your earnings are taxable at your corporate tax rate.
Capital Gains: If your business holds cryptocurrency as a long-term investment, profits from the sale may be considered capital gains. Only 50% of your net capital gains are included in your taxable income.
The distinction between these two categories is critical, as it determines how much tax your company owes. The CRA assesses each case individually, examining factors such as the frequency of transactions, intention to profit, and how the crypto activities are integrated into your business operations. Frequent or speculative trading is more likely to be considered business income, while long-term, occasional investing may qualify as capital gains.
How is Cryptocurrency Taxed for Businesses in Canada?
To understand how crypto is taxed, it is important to recognize what constitutes a “disposition” of cryptocurrency. The CRA considers a disposition any action where you:
Sell crypto for fiat currency (e.g., CAD or USD).
Trade one cryptocurrency for another.
Use crypto to purchase goods or services.
Gift cryptocurrency to another entity.
Each disposition is a taxable event and must be reported. The nature of the tax (business income vs. capital gains) depends on your business’s overall crypto activities.
GST/HST (and PST/QST) Considerations
If your business is GST/HST-registered, you generally must charge and remit GST/HST (or PST/QST, if applicable) when accepting cryptocurrency as payment for goods or services, based on the fair market value (FMV) of the crypto on the date of the transaction. This mirrors your obligations when accepting fiat currency.
Taxable Income from Crypto
If your business earns cryptocurrency (e.g., through mining, staking, or receiving payment in crypto), it is generally treated as business income on receipt. You must report the fair market value (FMV) of the crypto in CAD on the day it was received. Any subsequent disposal of that crypto is also a taxable event. If the crypto was originally acquired as part of your business operations, the profit on disposal may be treated as additional business income rather than a capital gain.
Calculating Business Income and Capital Gains
For businesses, taxable income from crypto is calculated as follows:
Business Income:
Report the FMV of crypto received as revenue. Deduct allowable business expenses related to crypto transactions, such as mining equipment costs, transaction fees, and operational expenses.
Capital Gains:
When disposing of crypto held as an investment, the capital gain or loss is calculated as:
Capital Gain (or Loss)=Proceeds of Disposition−Adjusted Cost Basis (ACB) \text{Capital Gain (or Loss)} = \text{Proceeds of Disposition} - \text{Adjusted Cost Basis (ACB)}
Adjusted Cost Basis Explained
The ACB is the total cost of acquiring your crypto assets, including:
Purchase price
Transaction fees (e.g., gas fees, exchange fees)
Any other costs directly related to acquiring the asset
Canada uses the average cost method for ACB. This means the total cost of all identical assets (e.g., all Bitcoin holdings) is averaged out. You cannot use First-In-First-Out (FIFO) or Last-In-First-Out (LIFO) for tax purposes.
Business Example:
A company purchases 10 ETH for $30,000 and another 10 ETH for $40,000. The total ACB is $70,000, with an average cost of $3,500 per ETH. If the company sells 5 ETH for $25,000, the capital gain is calculated as:
Capital Gain = $25,000 (sale price) – $17,500 (ACB) = $7,500
Taxable Portion (50%) = $7,500 × 50% = $3,750
Non-Taxable Crypto Transactions for Businesses
Certain crypto activities are not taxable, including:
Purchasing crypto with fiat currency
Transferring crypto between your company’s own wallets
Holding crypto without selling or trading
While these activities are not taxable, maintaining accurate records is crucial for ACB calculations.
Key Dates and Deadlines
The Canadian tax year runs from January 1 to December 31. Key dates for the 2025 tax season include:
Corporate Tax Filing Deadline: Six months after the end of your fiscal year
Payment Deadline: Within two or three months after your fiscal year-end, depending on your corporation type
Failure to meet these deadlines can result in penalties and interest charges.
RELATED STORIES
How to Report Crypto Taxes to the CRA for Businesses
To comply with CRA requirements, your business needs to:
File Your Corporate Tax Return (T2):
Report crypto-related business income and capital gains.
Include Foreign Crypto Holdings (if applicable):
You may need to complete Form T1135 for crypto held on foreign exchanges if the total cost exceeds $100,000. However, there is ongoing uncertainty as to whether all crypto on foreign exchanges counts as “specified foreign property.” Factors such as custodial arrangements and who controls the private keys could affect reporting obligations. Consult the latest CRA guidance or a professional advisor to determine if T1135 filing is required.
Keep Comprehensive Records:
Maintain detailed records for all crypto transactions, including:
Date of transaction
FMV in CAD at the time of transaction
Wallet and exchange details
Transaction fees
Strategies to Minimize Your Business’s Crypto Tax Liability
Harvest Losses:
Strategically sell underperforming assets to offset gains.
Time Your Dispositions:
Plan sales in low-profit fiscal years to reduce overall tax burden.Leverage Tax Credits:
Deduct business expenses related to crypto operations.
Donate Crypto:
Donations of cryptocurrency to a qualified donee (e.g., a registered charity) can offer a tax deduction or credit. Keep in mind that donating crypto still triggers a disposition at fair market value, which may result in a capital gain or loss unless specific exemptions apply.
The CRA Can Track Your Crypto!
Crypto transactions are not anonymous. The CRA collaborates with exchanges and blockchain analytics firms to track crypto activity. Under FINTRAC rules, Canadian-registered exchanges typically must report certain large or suspicious transactions of $10,000 or more in fiat, which can be made available to tax authorities upon request. Though not always reported directly to the CRA, these records can be accessed during audits or investigations.
Final Thoughts
Crypto taxes in Canada can be complex, but with the right knowledge and tools, your business can navigate them confidently. By understanding how the CRA taxes cryptocurrency and leveraging strategies to reduce your tax liability, you can ensure compliance and optimize your company’s financial performance.
For a seamless crypto tax filing experience, trust Integral. Let us handle the complexities while you focus on growing your business.
