If you use crypto, you probably owe taxes. That’s true whether you live in the U.S., Canada, Australia, or the U.K.
Mining, staking, swapping, or selling—it doesn’t matter. Most crypto activity has tax consequences. And even if crypto is global, tax laws are local. Each country has its own rules for how to report crypto, how much to pay, and when to file.
This guide breaks it all down. It covers how crypto is taxed in the U.S., Canada, Australia, and the U.K. You’ll see how tax agencies look at crypto trades, staking rewards, mining income, NFTs, airdrops, and more. We’ll also explain how to file your return, what to report, and what mistakes to avoid.
If you're unsure what you owe or how to report it, you're not alone. This is a complex topic. But understanding it is important. You don’t want to get it wrong, especially if you’re making regular trades or earning income from crypto.
Let’s get into it.
Why This Guide Matters
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Crypto taxes aren’t optional. In most countries, crypto is taxed like property or a commodity. That means when you sell, trade, spend, or even gift crypto, it often counts as a taxable event. You may owe capital gains tax based on the difference between what you paid and what it was worth when you used or sold it.
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If you earn crypto—through mining, staking, or getting paid in crypto—it’s often treated as ordinary income. That means you may also owe income tax, depending on the fair market value of what you received.
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Not reporting these crypto transactions can lead to tax penalties or even accusations of tax evasion. This guide helps you understand what counts as income, what triggers capital gains, and how to report it.
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Knowing your local rules keeps you safe and helps you avoid problems with tax authorities.
United States – Crypto as Capital Asset
In the U.S., cryptocurrency is treated as a capital asset for tax purposes. This means most crypto transactions—like selling, swapping, or even spending—are taxable events.
Key rules:
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Selling crypto or trading tokens triggers capital gains tax if you sell for more than your purchase price (cost basis).
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If you sell in under a year, the gain is taxed as ordinary income.
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If you hold for over a year, it’s taxed at the long-term capital gains rate (0–20%).
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You must report both crypto gains and crypto income on your annual tax return.
How to report:
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Use Form 8949 to list each transaction with its fair market value at the time of sale, your cost basis, and the resulting taxable gain or loss.
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Transfer the totals to Schedule D to calculate your overall capital gains and tax liabilities.
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If you earn crypto from mining, staking, or as payment, record the fair market value when you receive it. That amount counts as ordinary income and is subject to income tax.
Tip: Accurate records of all digital asset transactions—including dates, amounts, and fair market value—will make it easier to file crypto taxes correctly and avoid penalties. Many crypto investors use crypto tax software to keep track of cost basis and simplify tax reporting.
Canada – Crypto as Commodity
In Canada, crypto is considered a commodity. You’ll pay either income tax or capital gains tax, depending on the type of activity.
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Income tax applies if you earn crypto through staking, mining, or business-like trading
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For individual investors, only 50% of capital gains are taxed
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Selling, swapping, gifting, or using crypto in commerce are taxable events
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Buying or transferring crypto in CAD is tax-free
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Use the Adjusted Cost Basis method and avoid the Superficial Loss Rule
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Losses can offset gains, but only half of a capital loss is deductible
Tip: Keep complete records of all crypto transactions—including dates, amounts, and fair market value—so you can report taxable income or taxable gain correctly and lower your risk of an audit.
Australia – Property with Discounts
In Australia, crypto is treated as property for tax purposes. The tax treatment depends on the type of transaction. You may owe capital gains tax or income tax.
Key rules for Australian crypto investors:
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Selling, swapping, spending, or gifting crypto counts as a taxable event.
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Mining or staking payouts are ordinary income and must be included in your tax return.
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Holding crypto for more than 12 months can qualify you for a 50% long-term capital gains discount. This reduces the amount of tax you pay on profits.
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Buying crypto with Australian dollars or sending it between your own wallets is tax-free.
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Donations of crypto to registered charities may qualify for a tax exemption.
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You can choose FIFO, HIFO, or LIFO to calculate your cost basis for digital asset transactions.
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Losses from selling crypto can be used to offset gains or carried forward to future years.
Example:
If you bought Bitcoin for AUD $20,000 and sold it two years later for AUD $40,000, you have a capital gain of $20,000. The 50% CGT discount means you only pay capital gains tax on $10,000.
Track all crypto transactions using crypto tax software. Accurate records of acquisition dates, sale dates, and fair market value help avoid mistakes when you file crypto taxes
United Kingdom – Property with Allowance
In the U.K., crypto assets are treated as property. How you’re taxed depends on what you do with them. You might pay capital gains tax or income tax based on the type of digital asset transactions you make.
Taxable events include:
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Selling, trading, or gifting crypto (this creates a taxable gain)
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Staking, mining, or earning through airdrops (ordinary income)
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Exchanging one coin for another (crypto transactions)
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Using crypto to pay for goods or services
Tax rules and allowances:
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You can gift crypto to your spouse tax-free
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Holding crypto in GBP wallets is tax-free until disposal
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You get a £3,000 capital gains tax allowance each year before you need to pay capital gains tax
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Losses can be carried forward to offset future crypto gains
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HMRC uses share pool accounting to calculate your taxable income from sales
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You must report crypto activity in your self assessment tax return if your gains or income exceed the allowance
Key points for compliance:
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Keep records of acquisition date, sale date, amount, and fair market value at each transaction
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Track both taxable events and tax-free transactions to avoid overpaying
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Use crypto tax software to help with tax reporting and cost basis calculations
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Consult a tax professional if you’re unsure about crypto tax rules or your tax obligations
The U.K. system is structured, but mistakes in reporting transactions or failing to claim allowances can result in overpaying tax.
Shared Principles in Crypto Tax Rules
Across countries, you’ll find common principles:
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You must track the fair market value and cost basis of each transaction
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Crypto trades, staking, mining, NFTs, and DeFi yield are taxable events
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All countries allow loss carry-forward or offsets (with varying limits)
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Use proper cost-basis methods (FIFO, LIFO, Adjusted Cost Basis, share pools)
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Report income, gains, and other crypto events accurately in your tax return
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Many tools help—like crypto tax software that imports from crypto exchanges and wallets, helps calculate gains, and generates tax reports
How to Report and File Crypto Taxes
U.S.
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Use crypto tax software to import transactions
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Generate Form 8949 and Schedule D for gains
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Use Schedule 1 for staking or income
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File with your annual federal return
Canada
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Use your crypto tax software to categorize activity as gains or income
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Use adjusted cost basis for tax purposes
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Report on your T1 tax return and complete relevant sections
Australia
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Use the CGT schedule section for gains
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Report staking and mining income separately
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Claim the 50% CGT discount for long-term holdings
U.K.
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File using the Self Assessment online
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Use your CGT allowance to reduce tax
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Report income separately under miscellaneous income
Using Crypto Tax Software
How to choose the right crypto tax software:
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Ensure it supports your country’s crypto tax rules and taxation forms
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It should automatically import transactions from exchanges, wallets, and NFT platforms
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It should calculate capital gains, income, and losses, following local tax laws
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It must generate reports or tax forms (like 8949 or UK CGT summaries) for filing
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Check for user-friendliness and professional support if needed
Using tax software helps reduce mistakes and supports accurate tax reporting across borders.
Working with a Tax Professional
If your crypto activity is complex—DeFi trades, NFTs, margin, or business income—a tax professional helps. They can:
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Review your transaction data and file your tax return properly
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Help you comply with your country’s cryptocurrency tax regulations
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Advice on reducing tax liabilities
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Assist with cross-border or corporate tax issues
Count On Sheep offers assistance to crypto investors, creators, and businesses in the U.S., Canada, Australia, and the U.K.
Frequently Asked Questions
Q: Do I owe tax when I move crypto between my wallets?
A: No, unless you sell, trade, or spend it. Transfers are usually tax-free.
Q: Is staking income always taxed as ordinary income?
A: Yes. Most countries consider staking or mining rewards as income tax, not capital gains.
Q: Can I offset crypto losses against profits?
A: Yes. You can use losses to reduce future capital gains. Some countries limit how much or how long.
Q: Is buying crypto taxed?
A: No. Buying or holding crypto is typically tax-free.
Q: What if I received crypto as a gift or inheritance?
A: Gitfs and inheritance rules differ:
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Canada and Australia treat them as disposals, taxed accordingly
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The U.K. exempts gifts between spouses
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Tax professionals can help with specific cases
Q: Can I pay taxes in crypto?
A: Rarely. Most jurisdictions require payment in local currency, though some offer wallet-linked solutions.
Q: What if I miss a year or make mistakes?
A: Don’t panic. You can amend your return or participate in voluntary disclosure programs in Canada and the U.S.
Conclusion
This international crypto tax guide 2025 should help you understand how capital gains tax, income tax, and tax treatment from crypto differ by country.
For every digital asset transaction, keep a complete record. Use proper crypto tax software. If things get complex, talk to a tax professional.
If you’ve earned crypto, held tokens, or made frequent trades, it’s your responsibility to report crypto, file taxes, and avoid potential issues with tax authorities.
Work with Count On Sheep
If you want help filing crypto taxes—especially with cross-border activity, DeFi, or NFTs—Count On Sheep can assist. We help crypto investors and businesses in the U.S., Canada, Australia, and the U.K. file their tax returns confidently and correctly.
