Canadian Cryptocurrency Lawyers

Swapping one token for another is a barter disposition, so a gain or loss must be calculated at fair market value even without Canadian dollars. A common mistake is reporting only withdrawals to a bank.

Rewards are usually income at fair market value when received, and a later sale is a second taxable event. Large-scale mining is generally a business, with equipment depreciated through capital cost allowance. DeFi lending and liquidity pools must be analysed step by step against the protocol.

Airdrops may be income depending on whether they were earned through services or conditions. NFTs are property: sales by creators are usually business income, while resales by collectors may be capital gains. CRA guidance is limited, so we document the reasoning.

Businesses accepting crypto recognise revenue at fair market value on receipt and account for GST/HST or QST. Later price changes create separate gains or losses. Paying employees or contractors in crypto brings payroll withholding and reporting duties.

Appreciated crypto moved into a Canadian company in exchange for shares can be transferred on a tax-deferred basis by election. The election has a filing deadline, and the price and share terms must be planned in advance or the deferral may be lost.

Federal, Ontario or Quebec incorporation, founder equity versus token allocation, and whether a token sale is a securities distribution should be settled before fundraising. Services involving transfers of value may require FINTRAC MSB registration.

Pooling money with friends to buy crypto can raise securities distribution and registration issues, plus partnership or trust tax filings. We design partnership or corporate vehicles, draft the agreements and identify prospectus exemptions.

Do not send everything at once. Confirm the scope and deadline, gather exchange exports and wallet addresses, then decide the scope of the reply. We can negotiate a narrower scope where requests go beyond what is reasonable. A notice of objection to an assessment generally must be filed within 90 days.

These events do not automatically create a deductible loss. Timing and treatment depend on whether the asset was disposed of or is determined to be irrecoverable. Keep bankruptcy and police records.

Cost base can be rebuilt by cross-referencing exchange exports, block explorers and bank records. Where figures cannot be confirmed, a reasonable and consistent estimation method is used and explained in the return or disclosure.

On becoming a Canadian tax resident, existing crypto is generally valued at fair market value on that date, so appreciation before arrival is not taxed in Canada. Keep wallet balances and exchange statements from before and after arrival.

Residence depends on facts such as home, spouse, children and economic ties, which need not match immigration status. If two countries both claim residence, the treaty tie-breaker rules decide and prevent double taxation.

The main risk is that heirs cannot access the private keys. Wills should authorise access to digital assets and set out how. Ontario probate and Quebec succession rules differ, and trust or company structures can reduce uncertainty.

Yes. A swap is a disposition of the original asset, measured at fair market value at the time, even without Canadian dollars.

It depends on frequency, holding period, methods and expertise. Half of a capital gain is taxable; business income is fully taxable, but business losses can offset other income.

Not necessarily. Passive income in a private company is taxed more heavily, with partial refunds after dividends. Companies suit operating businesses or cases needing risk isolation or succession planning.

A voluntary disclosure may be possible. Applying before the CRA contacts you usually brings greater relief, and the window narrows once CARF takes effect.

Generally yes. Crypto is deemed disposed of at fair market value on departure, gains must be reported and a departure declaration may be required.

The OECD Crypto-Asset Reporting Framework, which Canada plans to apply from 2027. Platforms would report user and transaction details to the CRA and to foreign tax authorities, making unreported transactions easier to detect.