Are crypto gains taxed? What tax authorities say

The short answer

Making money with crypto does not put it outside the tax system. Every tax authority whose crypto page we could read and quote for this guide — South Africa, the United States, Canada and Chile — treats gains or income from crypto as taxable in some form. How much you pay, when, and on which form depends on the country where you are tax resident and on your own situation. This guide gives no tax advice and no rates of its own: it shows what the authorities say, so you know which questions to ask a tax adviser or your tax office.

What four tax authorities say

South Africa (SARS). “Yes, normal income tax rules apply to crypto assets and affected taxpayers need to declare crypto assets’ gains or losses as part of their taxable income.” SARS adds: “The onus is on taxpayers to declare all crypto assets-related taxable income in the tax year in which it is received or accrued.” Depending on the facts, gains are taxed as ordinary income — “on revenue account under “gross income”” — or as capital gains. SARS also notes that the law includes “a requirement for third-party service providers to submit financial data.”

United States (IRS). “For U.S. tax purposes, digital assets are considered property, not currency.” The IRS is direct: “Income from digital assets is taxable”, and “If you have digital asset transactions, you must report them whether or not they result in a taxable gain or loss.” Brokers have to report certain digital asset sales and exchanges on Form 1099-DA “beginning with transactions on or after Jan. 1, 2025.”

Canada (CRA). “As a crypto-asset user, you have to report your earnings (or losses) on your income tax returns”. Depending on how you trade, the result is business income or a capital gain. Signs of a business include “Frequency of transactions – You have a history of extensive buying and selling of crypto-assets”. For a capital gain, the CRA says “you must include half of your capital gains (known as taxable capital gains) in your income for the year.”

Chile (SII). Chile’s tax service answers yes when asked whether gains from buying and selling cryptocurrencies must be declared and taxed. For individuals who do not hold the coins in a business, the taxable gain is the sale price minus the tax cost — the purchase price adjusted for the change in consumer prices — and it is subject only to the final personal taxes (Impuesto Global Complementario or Impuesto Adicional). Residents of Chile must also declare gains made through foreign exchanges, because they pay tax on income from any source, in Chile or abroad.

Which transactions can count

The details differ, but the same events come up again and again in these authorities’ pages:

• Selling crypto for money. This is the obvious one.
• Swapping one crypto for another. The CRA lists as a disposition: “Trade or exchange it for government-issued currency or another type of crypto-asset”. The IRS question on US returns covers anyone who did “sell, exchange, or otherwise dispose of a digital asset”. Exchanging bitcoin for a stablecoin is such an exchange: the IRS and the CRA both list stablecoins among the crypto assets they mean.
• Paying for things with crypto. SARS: “This transaction is regarded as a barter transaction.” The CRA also treats it as a barter transaction.
• Receiving crypto. The question on US returns also asks whether you did “receive (as a reward, award or payment for property or services)” a digital asset, and the IRS publishes guidance on the “Taxability of staking income”. The CRA lists “Rewards (for example, from mining or staking)” among the ways of acquiring crypto, and SARS mentions crypto acquired through mining.

One thing that does not count in Canada: the CRA says “Some transactions do not result in a taxable disposition, such as transfer of crypto-assets between wallets that you own.” Moving coins between your own wallets — for example from one self-custody wallet to another — is not a sale there, but keep the records that prove both wallets are yours.

Records to keep

The CRA’s list is a good template wherever you live. For every transaction, keep:

• “The date and time of each transaction”
• the number of units and the type of crypto;
• “The value of the crypto-asset (in Canadian dollars) at the time of each transaction” — in your country, the value in your own currency;
• what the transaction was and who the other party was, “even if it is just their crypto-asset address”;
• “The addresses associated with each digital wallet used”.

Because an exchange can stop operating or stop serving your country, the CRA advises users of exchanges to “regularly export a history of your activity”. In Canada you must keep records “for at least six years from the end of the last taxation year to which the records and books of account relate.” The crypto profit and DCA calculators linked on this page help you work out the profit on a trade after fees and the average cost of regular purchases — the numbers a tax return starts from.

Other countries

For Kenya, Nigeria and Mexico we could not find a page on the tax authority’s own website that sets out the treatment of crypto and that we could quote, and this guide does not yet cover other countries. Not finding a page does not mean there is no tax: ask your tax authority, or a registered tax adviser, how crypto gains and income are treated where you are resident.

Watch out for tax scams

Fraudsters copy tax authorities too. The IRS warns about letters with a QR code asking people to register their crypto on a “compliance portal”, and says: “We don’t require registration of digital assets and are not sending these letters.” Check any tax message through your tax authority’s official website, never through a link or QR code it contains.

Crypto is risky, and both its legal status and its tax treatment differ by country; our “is crypto legal” pages quote what each country’s regulators say.