Crypto Tax Canada 2026: Complete Guide for Investors & Traders

Key Takeaways

• Tax Classification: Profits are taxed as capital gains or business income. For tax returns filed in 2026 (covering the 2025 tax year), the inclusion rate remains 50%. For gains realized on or after Jan 1, 2026, the inclusion rate increases to 66.67% on amounts exceeding $250,000.
• Reporting Update: The implementation of the Crypto-Asset Reporting Framework (CARF) has been delayed to January 1, 2027. While mandatory reporting is not yet active in 2026, Canadian exchanges are preparing their systems for future compliance.
• Taxable Events: Selling crypto, swapping one coin for another, and using crypto for purchases are all taxable events based on the Adjusted Cost Base (ACB).
• Deadlines: Personal tax returns are due April 30, 2026. Late filing can result in penalties and increased audit risk.

In 2026, the Canada Revenue Agency (CRA) classifies cryptocurrency as a commodity, not currency. This means profits are taxed either as capital gains for investors or business income for active traders.

While the new Crypto-Asset Reporting Framework (CARF) was originally scheduled for 2026, it has been delayed to 2027. However, the audit trail remains permanent, and voluntary compliance is critical. This guide outlines the current tax brackets, reporting requirements, and compliance steps for Canadian crypto users to ensure accurate filing.

Crypto Tax Basics in Canada 2026

According to CRA rules, crypto triggers tax liabilities either as capital gains or business income.

The CRA classifies crypto as a commodity, similar to gold. If you buy low and sell high as a casual investor, you pay tax on a portion of the profit.

• Standard Inclusion Rate (2025 Tax Year): 50% of the gain is taxable for all capital gains reported on your April 2026 return.
• New Inclusion Rate (2026 Tax Year): Effective January 1, 2026, the inclusion rate increases to 66.67% (2/3) for capital gains exceeding $250,000 in a single year. The first $250,000 remains at the 50% inclusion rate.

However, The CRA considers factors such as frequency, intent, and level of organization to determine if activity constitutes business income, the CRA considers this business income. This is taxed at your marginal rate, which can reach up to 53% (combined federal and provincial rates) in provinces like Ontario.

Note on Reporting: Although CARF implementation is delayed until 2027, the CRA already receives data from Canadian CIRO-registered crypto trading platforms and can issue requirements to pay for accounts with significant activity.

Example (Filing for 2025 Tax Year):

You bought 1 Bitcoin for $30,000 and sold it for $95,000 in 2025.

• Total Gain: $65,000.
• Taxable Amount: $32,500 (50% inclusion applies).
• Tax Owed: If your tax rate is 30%, you owe approximately $9,750.

Taxable Events for Crypto Investors in Canada

Selling crypto for cash, trading one coin for another, buying goods, or gifting crypto are all “dispositions.” These events trigger capital gains tax.

If you swap Ethereum (ETH) for Solana (SOL), this is a taxable event, even if you did not receive Canadian dollars. The CRA calculates the gain based on the Fair Market Value (FMV) in CAD at the exact time of the trade.

Common Investor Triggers:

• Crypto-to-crypto trades: Swapping BTC for ETH is a disposition. Example: You trade $10,000 worth of BTC (which you bought for $6,000) for ETH. You must report a $4,000 capital gain.
• Spending or gifting: If you buy a coffee with crypto or send coins to a friend, you must calculate the gain or loss (FMV minus your cost).
• Losses: You can use crypto losses to lower your taxes on gains from other investments, like stocks. You can also carry these losses forward to future years.
• Non-taxable event: Transferring crypto between your own wallets (e.g., from an exchange to a hardware wallet) is not taxable, as long as you do not sell the asset (network fees paid in crypto may trigger a minor disposition).

Canada Tax Rates and Brackets 2026

Canada utilizes a progressive tax system, meaning your total tax rate increases as your income rises. There is no flat “crypto tax rate.” Instead, the taxable portion of your crypto gains (or 100% of your business income) is added to your other income (employment, interest, etc.) to determine your final bill.

The 2026 Federal Income Tax Brackets (Indexed)

For the 2026 tax year, federal thresholds have been adjusted upward by 2.0% to account for inflation. Notably, the lowest federal tax rate has been reduced to 14%.

The Basic Personal Amount (BPA)

The BPA is the amount you can earn before you start paying any federal income tax.

• 2026 Base Amount: $16,452 (increased from $16,129 in 2025).
• Phase-out: This amount is gradually reduced for high earners. If your net income exceeds $181,440, your BPA begins to decrease, reaching a minimum of $14,829 once your income exceeds $258,482.

Provincial Tax Add-ons

In addition to the federal rates above, you must pay provincial or territorial tax. These rates vary by location:

• Ontario: Ranges from 5.05% to 13.16%.
• British Columbia: Ranges from 5.06% to 20.5%.
• Alberta: Uses a progressive system starting at 8% (for income up to $61,200).

Summary of Changes for Canada Crypto Tax  2026 Reporting

1. Lower Entry Rate: The drop from 15% to 14% on the first bracket provides modest relief for casual investors.
2. Inclusion Rate Threshold: Keep in mind that while your marginal rate follows the table above, the amount of crypto profit subject to that rate changes if your total capital gains exceed $250,000 (shifting from 50% to 66.67% inclusion).
3. CPP/EI Adjustments: If you are classified as a trader (business income), your self-employment contributions for CPP will be higher in 2026, with the first ceiling rising to $74,600.

Business Income for Crypto Traders

If you trade frequently or mine crypto, the CRA may classify your profits as business income. This is 100% taxable at your marginal rate.

If you day-trade 50 or more altcoins a week, the CRA looks at factors like frequency, volume, and intent to determine if you are running a business. Miners must report rewards as income based on the value when they received the coins.

Trader vs. Investor Factors:

• Frequency: High volume (e.g., 100+ trades/year) suggests business activity.
• Intent: Holding for a short time to make a quick profit vs. holding long-term.
• Reporting: Traders use form T2125. You can deduct expenses, such as software fees or internet costs (e.g., a $500 trading bot fee reduces your taxable income).
• Comparison: A trader with $50,000 in profit pays roughly $20,000 in tax (at a 40% rate). An investor with the same profit pays only $10,000 (assuming 50% inclusion).

Calculating Gains and Losses

Canada requires you to use the Adjusted Cost Base (ACB) method. You cannot use FIFO (First-In, First-Out).

ACB is the average cost of all identical units you own. Example: You bought 1 BTC at $20,000, then bought another 0.5 BTC at $40,000. Your total cost is $40,000. You own 1.5 BTC. Your ACB is $26,666.67 per BTC.

Steps to Calculate:

1. Track FMV: Record the value in CAD at the time of every buy and sell.
2. Calculate ACB: Total Cost / Total Units.
3. Calculate Gain: Proceeds from sale minus ACB.
4. Losses: If you sell for less than your ACB, you have a capital loss. You can use this to offset capital gains in the same year. You can also carry losses back 3 years or forward indefinitely.

Recommendation: Using automated crypto tax software is helpful because calculating ACB manually for hundreds of trades is difficult.

Reporting Crypto Taxes to CRA

You must file your 2025 taxes by April 30, 2026. If you are self-employed, the deadline is June 15, 2026, but any tax owed must still be paid by April 30.

• Capital Gains: Report on Schedule 3.
• Business Income: Report on Form T2125.
• Foreign Assets: If the cost of your crypto held outside Canada (e.g., on foreign exchanges or hardware wallets) exceeds $100,000 CAD, you must file Form T1135. (Note: Crypto held on CIRO-registered Canadian crypto trading platforms is generally exempt from T1135 reporting).

Audit Risk: The CRA audited over 500 crypto cases in recent years. With upcoming CARF implementation, the number of audits is expected to increase.

Tax Strategies for Crypto Investors 2026

Taxpayers may utilize established CRA provisions to manage their tax liabilities.

• Tax-Loss Harvesting: Sell assets that are down in value before the end of the year to offset your gains. To claim the loss, you must not rebuy the same asset within 30 days (this is the “superficial loss” rule).
• Donations: Unlike stocks, donating raw crypto is a “deemed disposition.” You MUST report the capital gain. However, you receive a donation tax credit for the Fair Market Value which can offset the tax owed. To avoid capital gains tax entirely, you must donate Publicly Traded Securities (such as Crypto ETFs), not the coins themselves.
• TFSA/RRSP: You cannot hold crypto directly in a TFSA. However, you can hold crypto ETFs (Exchange Traded Funds). This protects your gains from tax.

Strategy Comparison:

Conclusion

Navigating crypto taxes in Canada for 2026 requires strict attention to detail. While the mandatory data sharing under the Crypto-Asset Reporting Framework (CARF) has been delayed to 2027, accurate record-keeping remains your standard practice for maintaining compliance. Whether you are classified as an investor subject to capital gains tax (mindful of the new inclusion rate changes) or a trader earning business income, remember to calculate your Adjusted Cost Base correctly and file your return by the April 30 deadline.

Frequently Asked Questions

Does Canada tax crypto-to-crypto trades in 2026? 

Yes. Every swap (e.g., BTC to ETH) is a taxable disposition based on the Fair Market Value at that moment.

What is the capital gains inclusion rate for crypto? 

For the 2025 tax year, it is 50%. Starting January 1, 2026, it is 50% for the first $250,000 of capital gains and 66.67% for any gains above that amount.

Do I need to report small crypto transactions? 

Yes. All dispositions must be reported, regardless of size.

Can crypto losses offset stock gains? 

Yes. Capital losses from cryptocurrency can reduce capital gains from other investments like stocks. You can also carry them forward to future years.

Is crypto staking taxed in Canada? 

Yes. The CRA generally treats staking rewards as income (100% taxable) at the time of receipt. The CAD value at receipt then becomes the “cost basis” for that specific lot when you sell it later as a capital gain.

Disclaimer: This article is provided by MEXC for general informational and educational purposes only and does not constitute tax, legal, investment, or financial advice. Cryptocurrency tax treatment varies by jurisdiction and individual circumstances, and regulations may change over time. Readers should consult a qualified tax advisor or legal professional regarding their specific situation. MEXC does not guarantee the accuracy or completeness of the information and is not responsible for any decisions made based on this content. This article does not encourage tax avoidance or relocation for tax purposes.