The Excise Tax Act is Canada’s federal statute for goods and services tax/harmonized sales tax, or GST/HST. This profile covers two crypto-specific GST/HST measures in Part IX of the Act: the virtual payment instrument definition in subsection 123(1) and the cryptoasset mining rules in section 188.2. As of June 26, 2026, the rules are in force. The VPI amendments are deemed to have come into force on May 18, 2019, while section 188.2 and commercial-service amendment are deemed to have come into force on February 5, 2022.
Virtual payment instruments under the Excise Tax Act
The Act defines a virtual payment instrument as property that is a digital representation of value, functions as a medium of exchange, and exists only at a digital address of a publicly distributed ledger. The definition excludes property that confers rights to be exchanged, redeemed or converted for money, specific property or services; property primarily used within gaming, affinity, rewards or similar programs; and prescribed property.
Budget Implementation Act, 2021, No. 1 added virtual payment instruments to the Act’s definition of financial instrument. CRA states that supplies of virtual payment instruments made on or after May 18, 2019 would be financial services under the Excise Tax Act, while supplies before that date were treated as intangible personal property and subject to GST/HST. This is narrower than a general crypto exemption: tokens outside the virtual payment instrument definition may still be analyzed under other GST/HST rules.
Cryptoasset mining GST/HST rules
Section 188.2 creates a separate GST/HST framework for mining activities in respect of cryptoassets. A cryptoasset is defined for this section as property, other than prescribed property, that is a digital representation of value and exists only at a digital address of a publicly distributed ledger. Mining activity includes validating transactions and adding them to a public distributed ledger, maintaining and permitting access to that ledger, and allowing computing resources to be used for those activities.
Subject to the exception in subsection 188.2(5), section 188.2 deems a person’s acquisition, importation, bringing into a participating province, consumption, use or supply of property or services for mining activities to be otherwise than in the course of commercial activities. Where a person receives a mining payment, the mining activity and mining payment are deemed not to be supplies. CRA guidance explains that this generally means the miner is not required to charge GST/HST on mining remuneration received after February 4, 2022, and is generally not eligible for related input tax credits for property or services acquired, imported or brought into a participating province after that date.
Mining payments, pools and known-person exception
A mining payment includes money, property or a service that is a fee, reward or other payment received or generated because a mining activity is performed. CRA guidance says this can include block subsidies and transaction fees from a network, as well as other remuneration for mining activity.
The rules are not limited to proof-of-work mining. CRA guidance states that validating transactions may be performed through methods commonly referred to as proof-of-work or proof-of-stake protocols. The rules also address mining groups and operators, including whether parties share actual mining payments and risk. In some arrangements where a miner performs a mining activity for a known recipient and the subsection 188.2(5) conditions are met, the special deeming rules do not apply and the activity is tested under general GST/HST rules.
Status and editorial relevance
The virtual payment instrument proposal was released by Finance Canada on May 17, 2019 and later enacted in Budget Implementation Act, 2021, No. 1, which received Royal Assent on June 29, 2021. The mining rules were enacted by Budget Implementation Act, 2023, No. 1, which received Royal Assent on June 22, 2023. CRA Notice 324, updated in June 2025, provides administrative guidance but states that it does not replace the Act or regulations.
For CryptoSlate’s law database, this is a Canadian federal tax-law entry rather than a licensing, securities or AML framework. It is most relevant to coverage of crypto payments, mining, mining pools, staking-adjacent validation models and GST/HST treatment of cryptoasset transactions in Canada.