Best Crypto Tax Calculator Canada in 2023
Crypto trading and investing in digital assets have become very popular in recent years. However, navigating a brand new landscape and asset class isn’t always easy, especially when reporting incoming and capital gains on crypto investments. When trading cryptocurrencies in Canada, you need to be aware of all rules and regulations, and each crypto trader is required to adhere to the regulation laid down by the Canada Revenue Agency.
In Canada, cryptocurrencies are not treated as legal tender but as commodities. Like most investments, you might be accountable for several types of taxes: income, business income and capital gains. Preparing tax statements for your crypto trading or capital gains can be cumbersome. However, several crypto apps can help you save time and stress filing your crypto earnings report.
Best Crypto Tax Calculator Canada: Our Opinion
We have looked in depth into the best crypto tax calculators for Canadians and prepared this concise guide about which products are the best for organising and reporting your crypto earnings to make your life a lot easier and we have concluded that you would be better off using Koinly.
Koinly is one of Canada’s most popular crypto tax calculators. Koinly calculates your crypto taxes and helps you reduce your tax bill, no matter if you need to report business income or a capital gain from your crypto transactions.
The Koinly application is easy-to use, allows you to add your crypto exchange accounts via API or CSV files and connect your private blockchain wallets using public addresses.
Supported are over 300 cryptocurrency platforms, exchanges and wallets. Each transaction can further be categorized and catalogued within the platform.
One excellent Koinly feature is tracking your overall holdings and portfolio performance over time across various wallets and accounts along with your tax liabilities.
This feature can help you track your ROI over time, understand your business income or capital gain liabilities, track fair market value of crypto assets or if you incurred a capital loss within the financial year.
You can sign up with Koinly for free. However, generating tax reports is a paid service. The pricing is separate for each fiscal year and based on the total number of transactions during that year.
Accointing is the most popular crypto accounting software worldwide and one of the best to file tax in Canada. Jam-packed with features and advanced tools helps HODLers and professional crypto traders keep track of their portfolios performance, capital gains taxes, or business income.
Accointing is free to use for every Canadian who made only up to 25 crypto transactions per year. If you made more than 25 transactions in a year but less than 501, you can take advantage of their “Hobbyist” plan for only $79.
Traders, who made up to 5,000 transactions in a year, can file their crypto taxes for $199 under their “Trader” plan, and frequent traders who made more than 5,000 transactions can use the “Pro” plan for $299/year.
Available on mobile and desktop, Accointing automatically identifies tax savings opportunities, offers a comprehensive crypto portfolio tracking and insights tool and many other advanced crypto tax features.
The popular CryptoTax Calculator software is designed to support the unique CRA reporting requirements (how crypto is taxed in Canada), including Canadian specific rules regarding mining, staking, and airdrops. The app also support the CRA ACB & Superficial Loss wash sale rules.
CryptoTax Calculator covers various transactions and scenarios that may trigger income or capital gains tax events, including DeFi, DEX trades, NFTs, staking, or airdrops.
There is no free version available but the overall pricing is fair, starting from $49 with their “Rookie” account option, which only covers up to 100 transactions per year.
Up to 1,000 transactions are covered under the “Hobbyist” plan, which costs $99 a year.
With an “Investor” account users are covered for up to 10,000 transactions/year for a cost of $189, while a “Trader” account accommodates for everything above 10,000 trades for $299.
All account option come with same features such as unlimited integrations, reports for all financial years, portfolio tracking, tax breakdown analysis and wallet sync.
TokenTax is another top-notch crypto tax service which syncs with most wallets and platforms, largely eliminating manual data entry.
It allows you to visualize and analyse all of your crypto data in one place. It can further find and fix errors or missing data so you don’t make any mistakes filing your tax in Canada.
TokenTax is a one-top-shop for novice crypto investors, passionate traders, and enterprises alike offering various pricing options depending on your unique needs.
TokenTax allows you to track, organise and preview your tax liability and even offers VIP support including two personal consultations with a tax expert or enterprise level accounting services.
Their pricing varies from $65 per year for a “Basic” account, which is only suitable for Coinbase and Coinbase Pro users, up to $3,499 for VIP clients.
Most customers will require a “Premium” account for $199 per year, which covers for up to 5,000 transactions. Investors with high trade volumes across exchanges and platforms can take advantage of a “Pro” account, which covers up to 20,000 transactions and costs $799 per tax year.
CoinTracker is another affordable yet professional cryptocurrency tracker and tax reporting app.
CoinTracker is already trusted by over 1 million users and is very popular in the United States and Canada.
With CoinTracker, you can view your crypto market value, investment performance, and portfolio allocation in real-time and for tax purposes. Your transaction history is unified across every crypto service, making it searchable and filterable.
Over 300 exchanges, digital wallets, DeFi applications, lending platforms, DEXs and 10,000+ cryptocurrencies are supported.
The application automatically optimizes cost basis accounting methods and allows you to tax-loss harvest your crypto portfolio to rake in many savings.
CoinTracker is available on desktop and mobile devices which support iOS and Android.
What is a Crypto Tax Calculator?
A crypto tax calculator is an application that helps you keep a detailed record of all your crypto transactions and prepare your annual tax return. It lets you import data from crypto exchanges, DeFi, DEX trades, buys, sells, swaps, staking rewards, airdrops, NFTs, etc.
It further helps categorise transactions and calculate realised profit to prepare your income tax return. Appropriate reports can then be generated and sent to your accountant, tax professional or tax authorities directly via a tax software.
Beware, that any crypto tax calculator can not help you determine if your crypto tax report concerns business income or capital gains tax.
Make sure to discuss the tax treatment and tax obligations of your individual situation with a tax professional before filing your tax return.
How to choose the right Crypto Tax Calculator?
Depending on the software you choose, make sure it is designed to support the unique Canada Revenue Agency crypto taxes reporting requirements. These include Canadian specific rules around mining or staking cryptos and airdrops. Also watch out that the CRA ACB & Superficial Loss wash sale rules are covered.
Every crypto tax calculator mentioned in this article will enable you as a Canadian citizen to organize your crypto transactions to include in your income tax return for each tax year.
How to use a Crypto Tax App
First, sign up with the crypto tax calculator of choice, and select your country and currency.
Next, select your accounting method. The best tax apps for Canada support the adjusted cost basis method with the superficial loss rule for Canadian users, which is the only cost basis method the CRA allows.
After that, you’re all set. You can now connect to the crypto tax calculator app and start importing your crypto exchange records, digital wallet records, cryptocurrency transactions, DEX trading data, etc.
Do I need to pay taxes on my cryptocurrency?
Yes, if you transact with digital assets and cryptocurrencies, disperse them, earn interest on them, etc., you will need to pay taxes in Canada. If you only buy and hold your crypto, there is no tax implication until you dispose of your digital assets.
Cryptocurrency is considered an investment asset similar to stocks, bonds, and mutual funds. Thus, any profits you realise on your crypto trades are subject to capital gains tax or even business income tax, depending on your personal circumstances.
Taxes are also incurred when you exchange one crypto asset for another. When you buy goods or services, use them to generate passive income, for example, through staking, lending, airdrops, or selling coins and tokens back into fiat currency like the Canadian dollar.
If you day-trade cryptocurrencies, it is highly likely that your activities are considered business income.
Since it is your responsibility to keep track of your crypto activity and report it to the Canada Revenue Agency (CRA), it makes absolute sense to consider one of the best cryptocurrency tracker and tax calculator apps to make your life easier.
How do you calculate crypto tax in Canada?
Cryptocurrencies are viewed as commodities by the CRA. This means that your cryptocurrency transactions are either subject to income tax or capital gains tax. Additionally, your crypto gains may even be considered business income.
Most often, capital gains tax is applied to individuals in Canada as crypto tax. There are various ways of calculating crypto capital gain, but the simplest way is to find the trading price of your cryptocurrency at the time it was bought and compare it to the price at which it was sold. If the crypto asset was sold for more than it was bought, a capital gains tax is due. If the selling price was lower, it could be written off as a capital loss.
To calculate the tax implication, you need to find a reliable source for the price of the cryptocurrency. If trades were placed on a cryptocurrency exchange, like Binance or Coinbase, for example, it is likely that the exchange can provide all required information in an account transaction history. Usually, batches of your crypto transactions can be downloaded, making it easier to calculate the prices of multiple sales. For tax purposes, make sure that prices are denominated in Canadian dollars.
If you didn’t trade on exchanges can find the price of the relevant cryptocurrency in the price history section of sites like CoinMarketCap or CoinGecko. This is not the most accurate way to calculate your buys and sells, but these tools can give you at least a good indication. However, things can get trickier if you trade very small-cap tokens that are not widely traded.
At this point, there are no proper rules surrounding this specific topic and crypto taxes. However, the CRA advises very generically to consider “the fair market value, which is the highest price, expressed in dollars that a willing buyer and a willing seller… would agree to in an open and unrestricted market.” They further advise that the same method of calculating prices should be applied consistently.
Crypto Capital Gains Canada
Since cryptocurrencies are considered a capital asset, when disposing of any crypto asset by selling, swapping, spending (paying for goods and services) or gifting, capital gains tax on any potential profit is applied.
Crypto transactions which are viewed as a disposition by the CRA in Canada include:
- Selling cryptocurrency for Canadian dollars (CAD).
- Swapping cryptocurrency for another crypto asset.
- Paying with crypto for goods or services.
- Gifting cryptocurrency.
The good news is that capital gains tax is not applicable on the entire proceeds but only on profits from selling, swapping, etc., because only then a capital gain is realised.
In Canada, you only pay tax on half the net capital gains for each financial year.
Crypto Capital Gains Tax Rate Canada
In Canada, the capital gains tax rate is 50%. Therefore, you will have to pay taxes of $1,000 if your realised crypto profit was $2,000.
Crypto Tax Breaks
Canada applies a few tax breaks that digital asset investors might be interested in.
Only half of the crypto gains are taxed per financial year: you are required to pay capital gains tax on half of your capital gains. Simply add up all your capital gains from the tax year and then halve the amount. The sum is how much you will need to pay tax.
Personal tax allowance: the first CA$14,398 you make in income is tax-free in Canada for the 2022 financial year. In 2021, this allowance was just CA$13,808.
Spousal Tax Credit: If you don’t use up your personal tax allowance mentioned above, you can transfer it to your spouse (married partner or in a common-law partnership). Say you earn $50,000 a year, and your partner earns $10,000 a year, you would be able to claim the difference between your partner’s income and the Basic Personal Amount – in this example, $4,398.
When filing your taxes, you shouldn’t try, and factor in these tax breaks yourself. The CRA wants to see your totals across all asset classes and then apply any discounts on your behalf.
Business Income Tax Canada
If your income is considered business income, you would have to report the capital gains tax as income instead. Unfortunately, there is no clear guidance from the CRA when it comes to distinguishing your crypto gains between business income and capital gains either. Rather, the Canadian Revenue Agency decides whether an individual is running a digital currency business on a case-by-case basis.
What the agency considers in their decision making is the following: your crypto trades or investments are “for commercial causes and in a commercially viable way,” meaning that your activity is business-like and thus business income. Mining, day-trading, or exchanging crypto frequently are often considered crypto business activities.
If you receive crypto as part of your business, it is definitely considered business income and not capital gains. However, if your cryptocurrency gains and losses from crypto trading aren’t part of your business, capital gains tax is applied. You also just pay capital gains tax if you your crypto income is rather small or when your trades are irregular and inconsistent.
Keep in mind that items you purchased for running your crypto business, software costs and even accounting and legal costs may be tax deductible. This, in turn, helps to lower your business income and you pay taxes on a smaller amount.
Crypto Income Tax
The CRA may consider various crypto transactions as taxable income. For example, disposing of (selling or swapping) cryptocurrencies if these activities are carried out frequently or on a larger scale.
Below are a few examples of crypto transactions that could be subject to income tax by the CRA and other tax agencies:
- Getting paid in cryptocurrencies.
- Mining of cryptos and digital tokens.
- Earning staking rewards.
- Receiving referral or affiliate bonuses.
- Selling of NFTs.
The day-trading, selling and swapping of digital assets at scale could be considered business income and not capital gains.
Income tax may also be applied on certain DeFi transactions, such as:
- Earning interest/yields through yield farming on DeFi protocols.
- Earning liquidity pool tokens, governance tokens or reward tokens on protocols like Uniswap.
- Lending cryptos via platforms like Celsius or NEXO to earn interest and yields.
- Earning dividends on crypto platforms like CoinRabbit.
Similarly, play-to-earn platforms, where you can collect rewards or referral bonuses from cryptocurrency exchanges or other platforms, could also be considered business income and be subject to income tax.
Examples of play-to-earn and referral rewards include:
- Referral rewards from cryptocurrency exchanges or lending platforms.
- Watch-to-earn platforms like Odysee.
- Browse-to-earn platforms like Brave Browser.
- Play-to-earn games like Axie Infinity.
- Shop-to-earn through browser extensions like Lolli.
Although there is no specific guidance on most crypto transactions beyond the selling of crypto, the CRA guidance for what is considered business income from a tax perspective currently includes conducting activities for commercial reasons.
In the above mentioned circumstances, it is very likely that your capital gain is rather considered taxable income and you will have to pay income tax on your profits and rewards.
Crypto Capital Losses
Canadian regulators do not apply capital gains tax on any capital losses from crypto investments, but you can still utilize them to reduce your overall tax bill and include them in your capital gains tax report. This way, your taxable income is reduced automatically as well.
When you offset your capital losses against your capital gains for the financial year, you pay tax on a smaller capital gain.
Keep in mind that the 50% tax rule for capital gains equally applies to capital losses. Therefore, you can only offset half your net capital loss in any given tax year.
If your capital losses exceed your capital gains, you can carry them forward to future financial years to offset against any future capital gains taxes.
Tax on Lost or Stolen Crypto
There is currently no guidance by the CRA on whether lost or stolen crypto assets can be written off as a capital loss. However, taxpayers can deduct capital losses due to the theft of other capital property or capital assets.
As crypto assets are considered capital property under Canadian law, it is plausible to assume that a capital loss can be claimed on lost or stolen cryptocurrency in the same way they can be appropriated on other capital property such as stocks or business equipment.
Since Canada uses the adjusted cost basis method, it can be assumed that you would only be able to declare your original investment as a loss and not the fair market value of the digital asset at the time it was considered lost or stolen.
Therefore, you will need to provide a receipt for the transactions involving cryptocurrency at the time of purchasing the assets.
Is any crypto tax free in Canada?
Certain specific crypto transactions are indeed tax free in Canada.
You don’t need to pay tax on a crypto transaction when you’re:
- Buying with fiat currency.
- HODLing – earning interest on HODLing is a taxable event!
- Moving digital assets between your own wallets.
- Receiving crypto as a gift.
- Creating a DAO (Decentralized autonomous organization).
Final Thoughts on Crypto Tax Calculators for Canada
If you find yourself lost in the current CRA regulatory framework or Canadian income tax act, you are not alone. Many Canadians are looking for a simple way to keep track of all their cryptocurrency related transactions, capital gain, capital loss and the the tax implications.
The CRA and other major watchdogs have shifted their focus towards tax evasion of cryptocurrency users and continue to closely monitor financial institutions and their patrons.
We have tested and reviewed a wide range of cryptocurrency tax calculators and applications that can assist Canadians in preparing their taxes. Most of them can also assist in keeping track of your crypto portfolio, providing data analysis and visualisation of your holdings.
Whether you only exchange, transfer, or use cryptocurrencies on a small scale or are a professional crypto trader, these calculator and tracking tools can help you prepare detailed reports and statements for tax purposes. Even enterprise grade products are available in the current landscape.
With the support of these apps, you will find yourself in a much better position to keep track of your tax implications, your portfolio and investments in general.
Make sure to carefully consider all options to understand your needs and what to watch out for.
Our overview and comparison of the best digital asset tax apps will guide you and help you decide which application suits your individual requirements best. You can also read our guide about how the Cra track cryptocurrency transations and even more from the Crypto Regulation Canada related main page.