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NFT Taxes Canada: Capital Gains vs Business Income, GST/HST and Reporting

Updated

The CRA lists non-fungible tokens (NFTs) as a category of crypto-asset and describes them as “Unique digital assets that exist on a distributed ledger, usually a blockchain” (CRA, crypto-assets and your tax obligations). Buying, selling and trading NFTs therefore follow the same income tax rules as other crypto-assets, explained on the crypto tax page. This page covers what is different about NFTs: paying for them with crypto, trading one for another, creators’ income and GST/HST. It is part of the investment tax hub.

Which NFT transactions are taxable

The crypto tax page lists the transactions the CRA treats as dispositions. Applied to NFTs:

TransactionTax result
Buying an NFT with dollarsAn acquisition: what you pay, plus costs to acquire it, is the NFT’s cost
Buying an NFT with crypto (for example, ether)A disposition of the crypto you give up; the NFT’s cost is that crypto’s fair market value
Selling an NFTA disposition of the NFT
Trading one NFT for anotherA disposition of the NFT you give up; the NFT you receive costs that same value
Giving an NFT awayA disposition (see the gifting page for how gifts of property are valued)
Holding an NFTNo disposition
Selling NFTs you create, as a businessBusiness income

All values are in Canadian dollars at the time of each transaction, which is why a purchase with crypto has two parts: the gain or loss on the crypto, and the cost of the NFT.

Capital gain or business income

Each NFT disposition is either a capital gain (or loss) or business income (or loss). The CRA decides case by case, looking at factors such as how often you buy and sell, how long you hold, your knowledge of the market, the time you spend and whether you borrow to buy; the crypto tax page explains the CRA’s business-or-capital test, and how each result is taxed and reported, in full. Frequent flipping of NFTs, or making and selling them as an ongoing activity, points toward a business. Holding a few NFTs as an investment points toward capital.

Example: buying an NFT with ether, then selling it

All figures illustrative. You own ether with an adjusted cost base of $2,000. When it is worth $4,000, you use it to buy an NFT and pay a $50 network (gas) fee in dollars. Later you sell the NFT for $7,000 worth of ether and pay $100 in platform and gas fees. Both dispositions are on capital account.

StepAmount
1. Disposition of the ether
Fair market value of the ether given up$4,000
ACB of that ether$2,000
Capital gain on the ether$2,000
2. Cost of the NFT
Value paid plus the gas fee$4,050
3. Sale of the NFT
Proceeds$7,000
Selling fees$100
Capital gain on the NFT (proceeds minus ACB minus fees)$2,850
Total capital gains$4,850
Taxable capital gains$2,425

The ether you receive from the sale costs $7,000, its value when you received it.

NFT creators

A creator whose NFT activity is a business has business income, reported the way the crypto tax page describes for crypto-asset businesses. A creator’s costs of earning it typically include platform and network fees and software; equipment is claimed through capital cost allowance rather than deducted at once. The self-employed deductions guide covers which expenses qualify and how.

A creator’s year (illustrative).

ItemAmount
Primary NFT sales$10,000
Royalties on resales$2,000
Total revenue$12,000
Platform fees$1,500
Network (gas) fees$500
Software$300
Total expenses$2,300
Net business income$9,700

The net income is added to the creator’s other income and taxed at their marginal rates, and as self-employment income it can also bring CPP contributions (the self-employed tax calculator estimates both).

GST/HST on NFT sales

NFTs are among the tokens the CRA describes as property that may be excluded from the definition of a virtual payment instrument, so a creator’s NFT sales can be taxable for GST/HST. The crypto tax page’s GST/HST section explains when GST/HST applies to a sale of crypto-assets and the exceptions.

A creator who makes taxable sales in Canada has to register for the GST/HST once they are no longer a small supplier. Going over $30,000 in a single calendar quarter ends small-supplier status from the sale that crossed it. Going over $30,000 over the last 4 consecutive calendar quarters ends it at the end of the month after the quarter in which you crossed it. The CRA’s when to register page says the “effective date of registration is no later than the day of the first supply you make after you are no longer a small supplier”. A small supplier can register voluntarily. The GST/HST for freelancers page covers registering, charging and filing.

NFT losses

A capital loss is first applied against your taxable capital gains of the same year; what is left becomes a net capital loss, which can reduce taxable capital gains in any of the three years before or in any future year, but usually can't be deducted from other income. You report it on Schedule 3, and request a carry-back on Form T1A rather than amending the earlier return.

If you buy the same NFT back around the time you sell it at a loss, the loss can be a superficial loss, added to the cost of the NFT you bought back instead of deducted now; see the superficial loss rules.

Records and reporting

NFTs need the same records as any other crypto-asset: the crypto tax page lists the records the CRA expects you to keep and how to value a crypto-asset in Canadian dollars for each transaction.

Capital gains and losses go on Schedule 3; business income goes on Form T2125 with your return.

Sources

The figures and rules on this page come from these sources, last checked against them between September 23, 2026 and October 1, 2026. How we check facts.