Have you been investing in crypto? Or are you planning to invest soon? Regardless of your category, you will have to report transactions to the HMRC and pay your crypto taxes. But before you can do that, you need to be aware of the UK tax infrastructure and understand the nuances of crypto taxation in the UK.

However, it might seem intimidating. After all, where should one start?

Don’t worry we have the answer. You should start here with this ultimate UK crypto tax guide. We have curated the most comprehensive crypto tax guide for UK residents, covering all aspects of crypto taxation including capital gains tax UK, income tax UK, and NFT taxes, in a very digestible manner.

So let’s get started…

How is Crypto taxed in the UK?

In the United Kingdom, there is no specific tax dedicated to cryptocurrencies. Instead, the tax treatment depends on the nature of the transactions involved. If the activity is classified as generating income, it is subject to Income Tax. If it is deemed to generate a gain, it falls under Capital Gains Tax.

For income-generating activities, such as receiving a salary in crypto or earning mining and staking rewards from DeFi or native blockchains, income tax is applicable. Income tax rates in the UK range from 0% to 45%, depending on the individual's tax bracket.

For gains made from crypto transactions, if the total capital gains in a tax year are below £50,270, a Capital Gains Tax of 10% is applied. However, if the gains exceed this threshold, a 20% Capital Gains Tax is levied on the entire gain. The new Autumn Budget also announced that Capital Gains Tax rates had been raised to 18% and 24% respectively from October 30, 2024

For the 2024-2025 financial year, the tax-free allowance for capital gains has been cut from £6,000 to £3,000

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Consider the following transactions:

2024/01/13 - Oliver buys 2 BTC in the Binance Wallet

2024/01/27- Oliver sells 1 BTC from Binance Wallet (Assuming a gain of €8,000)

2024/03/23- Oliver buys 7 ETH in the Binance Wallet

2024/05/12- Oliver sells 6 ETH from Binance Wallet (Assuming a gain of €15,000)

2024/06/15- Oliver receives 6.25 BTC as mining rewards in Binance Wallet (Assuming 1 BTC to be €25,000)

2024/08/17- Oliver receives 12 ETH as compensation in Binance Wallet (Assuming 1 ETH to be €2,500)

As evident from the above ledger of transactions, Oliver made two disposals.

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1st Disposal

1 BTC sold

Gain incurred from the disposal = €8,000

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2nd Disposal

6 ETH sold

Gain incurred from the disposal = €15,000

Collective gain from both disposals = €15,000 + €8,000 = €23,000

This is Oliver’s taxable base, and CGT will be levied on it.

Moreover, Oliver received 6.25 BTC as mining rewards and 12 ETH as compensation. These transactions constitute an income. So let’s calculate the total income made by Oliver.

Value of mining rewards = €25,000*6.25 = €1,56,250

Value of ETH tokens received as compensation = €2,500*12 = €30,000

Total income = €1,56,250 + €30,000 = €1,86,250

This is Oliver’s taxable income base.

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Crypto Gains Tax

Since crypto is considered to be a capital asset, selling, swapping, spending, or gifting crypto results in capital gain and attracts a capital gains tax.

Note that HMRC doesn't have a long-term or short-term capital gains tax rate. The segregation is made based on income level.

The HMRC provides a capital gains tax allowance of £12,570.00 to each individual, meaning that you are only liable for tax obligations if your gain exceeds this allowance limit. If you have disposed of a crypto asset and made a profit of less than £12,570, you can offset the entire gain against the allowance limit.

Furthermore, any losses incurred from the disposal of a crypto asset can be offset against the gain, reducing your taxable income. For example, if your gain is £42,570, after deducting the allowance amount, your taxable income will be reduced to £30,000. To further decrease your taxable income, you can close underperforming positions at a loss. Let's assume you close positions worth £20,000, resulting in a taxable income of £10,000.

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Crypto Capital Gains Tax Rates UK

The capital gains tax rates are pretty straightforward in the UK, the tax slabs are segregated based on income levels. Below are the tax slabs according to which your capital gains will be taxed.

If your total gain is less than £50,270, you will be taxed at 10%. Otherwise, a 20% tax is levied on your income.

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For any disposals made after 30 October 2024, the new tax rates are as follows:

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How to Calculate Crypto Gains and Losses

Calculating your crypto gain or loss is a simple process. Start by determining the cost basis of the asset, which includes the acquisition cost of the asset plus any transaction or gas fees paid during the acquisition.

The capital gain or loss is then calculated as the difference between the cost basis and the amount received upon disposal. If the difference is positive (disposal amount exceeds the cost basis), it is considered a capital gain and is subject to capital gains tax. Conversely, if the difference is negative, you owe zero taxes.

However, you should track all your losses because you can offset your losses against your gains and reduce your tax bill.

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Consider the following transactions:

2024/01/13 - Jaimie bought 1 BTC for £21,000 in Binance Wallet

2024/03/15 - Jaimie bought 4 ETH for £2,000 each in Binance Wallet

2024/04/19 - Jaimie bought 2 BTC for £23,000 each in Binance Wallet

2024/05/20 - Jaimie sold 1 BTC for £25,000 from Binance Wallet

2024/07/21 - Jaimie sold 1 ETH for £2,800 from Binance Wallet

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As evident from the above ledger of transactions, Jaimie made 2 disposals:

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1st Disposal

1 BTC sold for £25,000

Now since BTC tokens were acquired on two separate instances at different prices, we need to use a specialised accounting method for cost basis calculations. There are three tax accounting methods as specified by the tax authorities in the UK, the Same Day rule, the Bread and Breakfast rule, and the Section 104 method. You have to apply one of these methods for cost-basis calculations depending on the nature of your transactions.

Jaimie's transactions fall under the application of the Section 104 method since the disposals were not made within the same day or within a 30-day period. The Section 104 method is akin to the Average Cost Basis (ACB) method, where the average acquisition cost of the asset is used as the cost basis.

Cost Basis for BTC = £23,000 + £23,000 + £21,000/3 = £22,333 (approx.)

Disposal Amount = £25,000

Capital gain = Disposal Amount - Cost Basis = £25,000 - £22,333 = £2,667

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2nd Disposal

1 ETH sold for £2,800

Jaimie acquired ETH tokens once. Therefore, this is a fairly straightforward calculation.

Cost Basis = £2,000

Disposal Amount = £2,800

Capital Gain = £2,800 - £2,000 = £800

Collective Gain from both disposals = £2,667 + £800 = £3,467

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Crypto Losses

Investing in cryptocurrency, like any other investment, may result in loss. If you sell a capital asset and incur a capital loss, you are not required to pay capital taxes on your loss.

Maintaining accurate records of your losses and reporting them to the HMRC is essential, as losses can be utilised to reduce your taxable capital gains. There is no limit to the number of losses you can use to offset gains, which has the potential to bring your taxable gains down to the annual tax-free allowance of £3,000, thus exempting you from paying taxes on your gains.

Importantly, you can carry forward your losses indefinitely until they have been fully utilised. Therefore, it is crucial to diligently track and report all your losses to the HMRC in order to maximise their benefits.

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Lost or Stolen Crypto

Although capital losses can be offset against gains, it's important to note that lost or stolen crypto cannot be directly written off against your gains. In certain circumstances, you may be able to make a negligible value claim for the lost crypto, which can later be converted into a capital loss.

Lost crypto is not recognized as a capital loss because the assets still technically remain under your ownership, even if you have lost access due to a missing private key. On the other hand, stolen crypto is not considered a disposal of assets by the HMRC, and therefore cannot be offset against capital gains.

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Crypto Tax Breaks UK

There are three primary tax breaks offered to citizens in the UK:

1. Income tax Allowance: For the 2024-25 tax year, the first £12,570 is tax-free. Note that you don’t get a personal income tax allowance if your income is more than £125,140 in a year.‍
2. Capital Gains Allowance: Every UK resident enjoys a Capital Gains Tax-Free Allowance of £12,300. After April 2023, this allowance will be reduced to £6,000, and in April 2024 it will further decrease to £3,000 for FY 2024-25.‍
3. Trading and Property Allowance: The Trading and Property Allowance allows for £1,000 of income from either trading or property to be tax-free. If you receive income from both, you can enjoy up to £2,000 of tax exemption.

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Crypto Cost Basis Method UK

Calculating the cost basis for a single token or currency is a simple task, however, people mostly trade and invest in multiple assets throughout a tax year, which makes cost-basis calculations a bit complicated.

In the UK, there are three possible cost basis methods you can use and you need to work through them in order of which applies to your assets:

1. Same-Day Rule: When buying and selling coins, if you complete the transaction on the same day, you must use the cost basis of that day to determine your gains or losses. If you sell a higher amount than you purchased, proceed to the next guideline.‍
2. Bread and Breakfast Rule: If you sell and then buy back the same coins/tokens within 30 days, you will use the cost basis of the newly purchased coins/tokens to calculate any gains or losses. If you sell a greater amount than what you bought in this time frame, you'll follow the final rule.‍
3. Section 104 Method: If neither of the two applies to your crypto transactions, you must use the cost basis method when determining your cryptocurrency taxes. This method operates similarly to the ACB (Average Cost Basis) by calculating an average cost basis for a group of assets by dividing the total amount paid for all assets by the total number of coins/tokens held.

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Consider the following transactions:

2024/01/23 - Emily bought 1 BTC in Binance Wallet for £21,000 and sold it 6 hours later for £21,500

Now since the disposal was made within 24 hours, the Same-Day rule applies.

So the cost basis from the same day will be used for cost basis calculations:

Capital Gain = £21,500 - £21,000 = £500

2024/02/23 - Emily bought 2 ETH for £2,000 each

2024/03/15 - Emily sold 2 ETH for £2,500 each

2024/03/21 - Emily bought 2 ETH for £2,400

Since the tokens were repurchased within 30 days of the disposal, the Bread and breakfast rule applies which states that the cost basis is equal to the acquisition price of the newly purchased tokens.

Cost Basis = £2,400

Disposal Amount = £2,500

Capital Gain(for 1 ETH) = £2,500 - £2,400 = £100

Gain from 2 ETH disposals = 2*£100 = £200

The Section 104 Rule has been discussed in detail in the section titled “How to Calculate Crypto Gains and Losses”.

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Crypto Income Tax UK

Cryptocurrency transactions classified as income may be subject to Income Tax and National Insurance contributions, taxed at your regular tax rate. There are various instances where crypto transactions can be viewed as income by the HMRC and taxed according to income tax laws.

Your gains will be considered an income if they arise from the following sources:

1. Received as compensation for a product or a service
2. Received as a staking reward from a DeFi protocol
3. Received as a recurring income in the form of interest/reward from the borrower
4. Received as a mining reward
5. Received via airdrops

These transactions are taxed according to the regular income tax slabs. HMRC has finally issued clear guidelines for the taxation of DeFi transactions. Since staking and lending involve recurring payments in the form of interest or reward from the DeFi protocol, they can be considered as income and therefore attract income tax. Although DeFi transactions may also be taxed under capital gains tax laws depending on the nature of transactions.

The following cases shall be considered for an income to be considered taxable in case of DeFi transactions.

1. If the return is predetermined
2. If the return originates from a borrower or a DeFi platform
3. If the return is periodic as against a one-time payment

The HMRC is yet to release any guidance on income from play-2-earn, learn-2-earn, and watch-2-earn Web3 platforms that offer a reward for engaging with their platform. Some examples would be:

• Tokens earned through Brave Browser for watching ads
• Tokens earned on CoinMarketCap learning or Coinbase learning center
• Rewards earned on Odysee by watching videos

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Crypto Income Tax Rates UK

To determine the tax owed on crypto income, familiarise yourself with the crypto Income Tax rates, which align with the Income Tax Bands for other forms of income.

Notice that taxes in the UK are progressive, which means that not all your income is taxed at a flat rate, but only the excess amount.

Let’s understand this through an example:

Suppose you make £20,000, the first £12,570 will be taxed at 0% as it falls under the first slab and the remaining £7,430 will be taxed at a tax rate of 20% as it falls under the second slab.

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How to Calculate Crypto Income

To accurately calculate your crypto income, the most crucial requirement is to have a comprehensive list of cost basis for each token in your crypto portfolio, as well as a record of all the disposals you have made during the tax year, including the corresponding disposal prices. These details will form the foundation for accurately determining your taxable income from crypto transactions.

Determining your cryptocurrency gains is simple if you have infrequent small profits, but tracking and calculating them from recurring sources such as staking rewards or airdrop income from multiple assets can become complicated.

Fortunately, Kryptos can quickly manage all these transactions for you and calculate your total cryptocurrency income in minutes.

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Tax-Free Crypto Transactions

In the UK, some tax-free crypto transactions include:

• Personal gifts to spouse.
• Transactions that are made in a personal capacity and not as part of a trade or business.
• Transfers of crypto assets between an individual's wallets or exchanges.
• Donations of crypto assets to charities registered with the Charity Commission for England and Wales.
• Crypto assets are received as airdrops, provided they are not part of a trade or business.

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Taxed Crypto Transactions

Crypto transactions that are taxable in the UK include:

• Disposal of crypto assets for a profit, where the profit is considered as taxable capital gains.
• Crypto assets that are received as income, such as mining rewards or staking rewards, where the income is considered taxable income.
• Trading of crypto assets as part of a trade or business, where the profits are considered taxable business income.
• Sale of goods or services for crypto assets, where the profits are considered taxable business income.

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Tax on Mining Crypto UK

Depending upon the size, activity, and objective of the miner, crypto mining is taxed in two different ways. If an individual or group of individuals perform mining operations in their free time just to make a couple of extra bucks on the side, then the event is perceived as habitual mining by the HMRC, and the tokens received are subjected to income tax. These tokens are also subjected to capital gains tax upon disposal.

For mining companies, the taxation model is different. All tokens obtained through mining are included in the company's trading profits and are subjected to an income tax.

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Tax on Staking Crypto

According to the HMRC guidelines on Staking rewards, staking rewards can either be viewed as taxable trade subject to capital gains tax, or they may be viewed as miscellaneous income attracting regular income tax based on the consensus you are staking on and how the rewards are distributed.

Whether staking rewards are viewed as taxable trade depends on the following variables:

• Degree of activity
• Organisation
• Risk
• Commerciality

If it’s not viewed as a trade, the value of the tokens at the point of receipt in pound sterling will be taxed as income. Note that if you choose to hold these tokens and dispose of them later, you will have to pay capital gains tax on any gains you make.

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Crypto Margin Trading, Futures and CFDs

In the UK, profits from trading cryptocurrencies, including margin trading, futures, and CFDs, are subject to capital gains tax. If the profits are above the annual tax-free allowance (currently £3,000), the excess must be reported and taxed at the individual's marginal tax rate. Additionally, value-added tax (VAT) may also apply to cryptocurrency transactions in the UK.

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Crypto Gifts and Donation Taxes

Gifting crypto to anyone other than your spouse or family in the UK constitutes a taxable event and attracts capital gain tax. However, crypto donations to a registered charity are tax-free.

When gifting cryptocurrency to someone other than your spouse or civil partner, it is necessary to determine the market value (in pound sterling) of the crypto at the time of the gift. This value will be treated as sales proceeds for Capital Gains Tax purposes.

It is crucial to note that if income tax has already been levied on the value of the gifted tokens, section 37 of the Taxation of the Capital Gains Tax Act 1992 will come into effect. Essentially, this means that the "sales proceeds" will be adjusted by the amount already subject to income tax and subsequently subjected to CGT.

When it comes to gifting crypto to your spouse or civil partner, it’s completely tax-free and there’s no limit on how many assets you can give them in a tax year.

Donating cryptocurrency to a registered charity in the UK is exempt from tax.

When an individual donates crypto to a charity, they qualify for Income tax relief on the donated amount. Additionally, they can enjoy an exemption from Capital Gains Tax, with two exceptions:

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1. If the individual sells the crypto assets to the charity at a price higher than the acquisition cost, they will be liable to pay CGT on the difference between the selling price (instead of the market price) and the acquisition cost.
2. If they make a tainted donation—this refers to a scenario where an individual enters into an arrangement with a charity to receive some form of kickback or financial advantage.

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NFT Taxes UK

NFT taxes are still a grey area in the UK crypto tax infrastructure because the HMRC doesn’t consider NFT to be the same asset class as cryptocurrencies and therefore segregates them from the guidelines governing their taxation.

Although no new legislation has been passed to accommodate the taxation of NFTs in the UK, here’s how some of the common NFT transactions are taxed in the UK:

• Buying an NFT with crypto assets- attracts capital gains tax
• Buying an NFT with fiat currency- attracts zero tax
• Disposing of an NFT for fiat or crypto- attracts capital gains tax
• Swapping one NFT for another- attracts capital gains tax
• Minting an NFT from a blockchain- attracts zero tax
• Gifting NFTs- attracts capital gains tax unless(unless it’s your spouse or civil partner)

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ICO Taxes

ICOs are special events that allow investors to acquire tokens from an unreleased project in exchange for mainstream tokens like BTC and ETH. The HMRC is yet to release guidelines on how tokens received from ICOs are viewed from a tax perspective. However, since most European countries treat ICOs as simple crypto-to-crypto trades, we can assume that income from ICOs will be viewed as simple crypto-to-crypto trade and will be subject to CGT.

However, we do suggest seeking the advice of an expert tax accountant to make sure you don’t end up in legal trouble due to discrepancies in your tax report.

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DAO Taxes

DAOs are member-owned communities with a shared vision. All the decisions in a DAO are made by the members in the absence of central leadership. DAOs are new-age institutions that aim to democratise decision-making and allow people to have a say in decisions that directly affect them. DAOs are often called the soul of Web3 and enable members to earn rewards in multiple ways. DAO contributors are rewarded for their contributions to the organization, similar to how centralized organisations pay salaries to their employees. They also pay out bounties for one-time projects and redistribute any profits generated through operations.

The HMRC is yet to release specific guidance on how income from DAOs is taxed. We are constantly on the lookout for new guidelines on the subject and all relevant details will be added here as soon they hit our radar.

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DeFi Crypto Taxes UK

The HMRC recently announced that DeFi transactions will be taxed depending on the nature of the transactions. If the DeFi transaction results in a capital gain, it is subject to capital gains tax. And if a person or institution appears to be generating income from DeFi protocols, they must pay income tax on that income.

DeFi transactions such as adding/removing liquidity, staking assets, and lump sum rewards received from staking and lending in most instances are considered disposal of assets and attract capital gains tax.

Returns from DeFi protocols may be considered an income when:

• The return is predetermined
• The return originates from a borrower or a DeFi protocol
• If the return is recurring in nature

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How are airdrops and forks taxed in the UK?

Forks

There are two ways a blockchain can split. One is through a soft fork and another is through a hard fork. According to the HMRC guidelines, a soft fork is a non-taxable event, because it ends with no new tokens.

Hard Forks, on the other hand, results in the distribution of a fixed number of new tokens to each user in exchange for their existing tokens on the blockchain. Although these new tokens aren't considered income and don't attract income tax, they are assigned a cost basis, or acquisition cost, based on the value of the original tokens. If the user later sells these new tokens, they may incur a capital gains tax liability.

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Airdrops

According to HMRC, airdrops attract income tax(in most cases). If the tokens you receive via the airdrop are the result of an action taken by you, then the tokens received will be counted as income and will attract income tax. Note that your actions may be as simple as promoting the airdrop in your immediate network through social media or having interacted with the blockchain in the past.

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When to Report Crypto Transactions in the UK

In the UK, individuals are required to report their cryptocurrency gains and report them as part of their taxable income. This should be done annually as part of the individual's Self-Assessment tax return. The deadline for filing a Self-Assessment tax return for the 2024-2025 tax year is 31st January 2026.

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How to File Crypto Taxes in the UK

You file your crypto taxes when submitting your self-assessment tax return to the HMRC. You can report your crypto gains and losses on form SA-100 and crypto gains summary SA-108.

You can report your crypto income in box 17 of your self-assessment tax return(Form SA-100).

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What Crypto Records Will the HMRC Want?

As a crypto investor in the UK, it's essential to maintain accurate records to ensure compliance with the HM Revenue and Customs (HMRC) regulations. Here are some records you should consider maintaining:

• Detailed report of all sales and purchases, including dates, transaction amounts, and values in British pounds at the time of the transaction.
• A record of your cryptocurrency wallet addresses, both for personal wallets and exchange wallets.
• Copies of your account statements from cryptocurrency exchanges, including details of deposits, withdrawals, trades, and any fees incurred.
• If you are involved in cryptocurrency mining, maintain records of the expenses related to mining equipment, electricity costs, and any income from mining activities.
• A record of any transfers between wallets or exchanges. This includes details such as dates, wallet addresses, and transaction amounts.
• In addition to transaction-specific information, it's also a good practice to keep personal records, such as email correspondence, contracts, or invoices related to cryptocurrency investments.

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How to File Crypto Taxes Using Kryptos?

Now that you’re aware of how your crypto transactions are taxed and what forms you need to fill out to complete your tax report, here’s a step-wise breakdown of how Kryptos can make this task easier for you:

1. Visit kryptos.io and sign up using your email or Google/Apple Account
2. Choose your country, currency, time zone, and accounting method
3. Import all your transactions from wallets and crypto exchanges
4. Choose your preferred report and click on generate report option on the left side of your screen and let Kryptos do all the accounting.
5. Once your Tax report is ready, you can download it in PDF format.

If you still need clarification regarding the integrations or generating your tax reports, you refer to our video guide here.

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How to avoid crypto taxes in the UK

Tax evasion is a punishable offence in the UK and we advise you to diligently report all your crypto transactions to the HMRC and pay your taxes on time to avoid getting into legal trouble.

However, there are ways you can legally and strategically reduce your crypto taxes. So let’s look at some of these ways:

• Use a crypto tax calculator to make sure all your losses are accounted for
• Take advantage of tax-free thresholds(capital gains tax-free allowance, tax-free allowance)
• Invest some of your crypto assets into a pension fund.
• Donate your crypto
• Gift crypto to your spouse or civil partner
• Invest in an opportunity-zone fund.
• Use tax-loss harvesting

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United Kingdom: Tax Implications of Celsius Distributions

The Celsius Network bankruptcy marked a significant fallout in the cryptocurrency industry, exposing vulnerabilities in centralized exchanges. Declared in mid-2022 amid liquidity challenges, it left thousands of investors unable to access their funds. The collapse revealed operational mismanagement and risky lending practices. Bankruptcy proceedings aim to redistribute approximately $2 billion in assets, though many users face substantial losses. The legal and tax implications of the distributions received during the bankruptcy vary depending on the country. 

Below is a detailed analysis of how the United Kingdom (UK) handle these issues.

In the UK, tax treatment for Celsius-related losses and distributions depends on whether a disposal occurred and the circumstances surrounding it.

1. Capital Loss Claims
   • A disposal (e.g., liquidation of holdings) allows claiming a capital loss if the cash received is less than the original cost basis.
   • Negligible value claims can be made for worthless assets, treating them as disposed of for £0 to crystallize the loss.
2. Non-Taxable Scenarios
   • Receiving a reduced quantity of the same cryptocurrency without liquidation does not trigger a taxable event. Instead, the new cost basis is used for future Capital Gains Tax (CGT) purposes.
3. Reporting Losses
   • Investors must calculate the difference between the original purchase price and the amount recovered to report losses under the "Capital Gains Summary" in their Self-Assessment tax returns. Losses can offset capital gains or up to £3,000 of income annually, with excess carried forward.

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Example

• Purchased 1 BTC for £40,000.
• Celsius distributed £10,000 in cash post-bankruptcy.
• Capital loss: £40,000 - £10,000 = £30,000.

Investors can claim this loss against current or future gains​.

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FAQs

1. Do you pay tax when spending crypto in the UK?

Spending your cryptocurrency incurs Capital Gains Tax as you are getting rid of a valuable asset. You must determine your capital gain or loss by comparing the fair market value of your crypto on the day of spending to its cost basis. If the value of your asset has risen since you obtained it, you owe Capital Gains Tax on the resulting profit. On the other hand, if the value has fallen, you have a capital loss that can balance out any gains.

2. What is the deadline for reporting crypto taxes to HMRC?

The deadline for reporting crypto taxes to HMRC in the UK is 31st January following the end of the tax year.

3. Is crypto taxable in the UK?

Yes, crypto transactions are taxable in the UK according to the HMRC guidelines. Depending on the nature of the transactions you’re involved in, your gains may be subjected to capital gains or income tax.

4. How is Crypto Taxed in the UK?

There are no dedicated tax laws for crypto transactions in the UK. Instead, the HMRC has issued guidelines to accommodate crypto taxation within the existing tax laws. Crypto transactions are taxed based on the nature of specific transactions. If a person appears to be earning an income in the form of crypto, he/she is taxed according to income tax laws. If a person seems to be making a capital gain with the disposal of a crypto asset, he/she is taxed according to capital gains tax laws.

It’s important to note that the HMRC doesn’t consider crypto as a currency or a security, but as a capital asset, which automatically aligns its taxation with the capital asset taxation laws. However, crypto transactions can be complicated, especially those involving DeFi, that’s one of the reasons why crypto taxation is multi-layered.

5. Is Crypto legal in the UK?

Yes, cryptocurrency is legal in the United Kingdom. People are allowed to buy, sell, and hold cryptocurrencies like Bitcoin, Ethereum, and others. The UK government has stated that it intends to regulate cryptocurrencies to prevent their use in illegal activities, such as money laundering and financing of terrorism. The Financial Conduct Authority (FCA) has issued guidance on the regulation of crypto assets, including initial coin offerings (ICOs) and exchanges.

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All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position / stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!

Are you still trying to figure out whether crypto is legal in Australia? Or How crypto transactions are taxed by the ATO? 

If you answered any one of these questions with a “yes”, you’re right where you should be. Figuring out crypto taxes on your can be intimidating for investors filing their crypto taxes for the first time. So we decided to make things easier for you with this comprehensive crypto tax guide, which covers everything you need to know about crypto taxes in Australia and the rules governing them.

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How are cryptocurrencies taxed in Australia?

The Australian Taxation Office (ATO) does not classify Bitcoin and other cryptocurrencies as currency but rather as property. As a result, when crypto assets are sold or disposed of, they are subject to capital gains tax. It's important to note that the ATO includes bitcoin, altcoins, NFTs, and other crypto assets under the umbrella term of cryptocurrencies. Hence, any profits made from the sale of these assets will incur tax obligations.

However, there might be instances where crypto is viewed as an income by the ATO and is subjected to income tax.

There are different tax rules for traders and investors in Australia. Traders are typically subject to income tax, while investors are usually liable for capital gains tax. This distinction applies to both traditional investments and cryptocurrencies.

The ATO has provided clear guidelines to determine whether someone is classified as an investor or a trader. Here is a simplified summary of the guidelines.

According to the ATO, individuals or entities that engage in frequent crypto trades or operate large-scale mining operations to generate a recurring income are considered traders. Income generated from such activities is subject to income tax.

The ATO suggests that individuals who invest in crypto assets with a long-term perspective or engage in casual trading and occasional mining using spare computing power are considered investors. Gains from these activities are subject to capital gains tax. However, it's important to note that investors may also attract income tax depending on the nature of transactions and the source of income.

You pay anywhere between 0-45% in capital gains tax based on the gains you make in a tax year. We have discussed the tax slabs in more detail later in the guide. The tax rates for crypto income are the same as capital gains tax.

Let’s look at an example to better understand how crypto transactions are taxed in Australia.

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Consider the following transactions:

14/01/24 - Jack Buys 2 BTC in Binance Wallet
16/02/24 - Jack buys 2 ETH in Binance Wallet
18/05/24 - Jack receives 6.25 BTC through airdrops in Binance Wallet (FMV - $30,000 per token)
13/06/24 - Jack sells 1 BTC from Binance Wallet (Realised Gain = $10,000)
18/19/24 - Jack sells 1 ETH from Binance Wallet (Realised Gain = $1,500) 

As evident from the above transactions, two disposals were made.

1st Disposal

‍1 BTC sold

A gain of $10,000 was incurred from this disposal

2nd Disposal

‍1 ETH sold

A gain of $1,500 was incurred from this disposal

Collective Gain from both disposals = $10,000 + $1,500 = $11,500

Now this gain will be taxed as capital gains.

The mining rewards received by Jack will be treated as income and as such taxed under the income tax laws.

Taxes will be levied on the FMV of the assets upon receipt.

So let’s calculate the FMV of the received assets

FMV of mining rewards = 6.25 * $30,000 = $1,87,500

This is your taxable income base.

‍Can the ATO track crypto transactions?

‍Yes, the ATO can track cryptocurrency transactions. The ATO has access to multiple avenues, such as data from cryptocurrency exchanges and blockchain analytics tools, that they can use to correlate individual transactions and identify discrepancies.

The ATO may use this information to ensure individuals are reporting their cryptocurrency gains and losses correctly on their tax returns.

Crypto Gains Tax Australia

As mentioned above, the ATO considers crypto to be a capital asset and therefore their disposal attracts a capital gains tax. The following transactions are considered disposal by the ATO:

1. Selling crypto for fiat currency(AUD or any other)
2. Swapping one crypto token for another
3. Buying goods or services with a crypto asset
4. Gifting crypto

In Australia, it is important to understand that capital gains tax is divided into two sub-categories. If you hold your assets for more than one year before selling them, you are eligible for a 50% discount on capital gains.

However, if you sell your assets within one year of acquiring them, your gains will be subject to a higher rate of short-term capital gains tax.

It is crucial to consider the holding period when calculating your crypto tax liabilities on capital gains in Australia.

Capital Gains Tax Rate

The gains you’ve made by buying, selling, spending, or gifting your assets will be taxed based on the total income in a tax year. Mentioned below are the tax slabs divided by income groups:

Tax Rates for FY year 2023-24

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Tax Rates for FY year 2024-25

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How to calculate your crypto capital gains and losses?

‍Determining your capital gains or losses is a simple task, just subtract the cost basis (the price you paid to acquire the asset) from the disposal amount. If the result is positive (selling for more than what you paid), you have a capital gain and the disposal is taxable.

If it's negative (selling for less), it's a capital loss, allowing you to offset gains and lower your taxable income.

Calculating your cost basis can be a daunting task, especially when dealing with a large number of transactions accumulated over a year. However, there are tools available to simplify the process.

One such tool is Kryptos, which can automatically fetch transactions from your investment profiles and digital wallets. With Kryptos, you can conveniently calculate your cost basis by adding the price you paid for the asset during acquisition, including transaction fees or gas fees, and convert it to AUD.

This automated solution can save you time and effort, providing you with accurate cost-basis calculations within seconds.

Consider the following transactions:

14/01/24 - Amelia bought 1 BTC for $25,000 in Binance Wallet
18/03/24 - Amelia bought 2 ETH for $3,000 each in Binance Wallet
23/04/24 - Amelia bought 2 BTC for $30,000 each in Binance Wallet
04/06/24 - Amelia sold 1 BTC for $35,000 from Binance Wallet
29/07/24 - Amelia sold 1 ETH for $4,000 from Binance Wallet
21/05/25 - Amelia sold 1 BTC for $40,000 from Binance Wallet

As evident from the above ledger, three disposals were made. Let us look at each disposal individually.

‍1st Disposal

‍1 BTC sold for $35,000

Now, Amelia acquired BTC tokens on two separate occasions, one for $25,000 and another for $30,000. We need to identify which one of these tokens was disposed of and we need to rely on a specialized accounting method as suggested by tax authorities.

In Australia, the ATO allows investors to use any accounting method as long as the investment lots can be identified.

We will use FIFO accounting for simplicity. A simple way to understand the FIFO or First-In-First-Out accounting method is to consider that the first token you buy is the first one you sell.

So according to the FIFO accounting method, the BTC that was disposed of is the same one that was acquired on 14/01/24  for $25,000.

Cost basis = $25,000
Disposal amount = $35,000
Capital Gain/Loss = Disposal Amount - Cost Basis = $35,000 - $25,000 = $10,000

2nd Disposal

‍1 ETH sold for $4,000

Cost Basis = $3,000
Disposal Amount = $4,000
Capital gain = $4,000 - $3,000 = $1,000

3rd Disposal

‍1 BTC sold for $40,000

Cost Basis = $30,000
Disposal Amount = $40,000
Capital Gain/Loss = Disposal Amount - Cost Basis = $40,000 - $30,000 = $10,000

However, this disposal is different from the other two. This disposal was made after holding the BTC for over a year. Amelia is eligible for a 50% discount on her tax liabilities.

So actual gain from this transaction is $5,000

Now, collective gain from all three disposals = $10,000 + $1.000 + $5,000 = $16,000

This is the final amount you’ll pay capital gains tax on.

Crypto Capital Losses

‍Whether you classify as a trader or investor, losses are an inevitable part of the crypto journey. However, losses can have a silver lining when it comes to taxes. By actively tracking and documenting all your losses, you can utilize them to your advantage.

In Australia, managing crypto capital losses can be a strategic way to minimize your tax liability. When you incur a capital loss from cryptocurrency transactions, you can use it to offset your capital gains, but there are specific rules to follow, especially regarding non-allowable capital losses and the order in which these losses are applied.

‍Non-Allowable Capital Losses

‍Not all capital losses can be used to reduce your capital gains. For example, if you sell personal use assets like boats or furniture at a loss, these losses are non-deductible. Similarly, losses from assets exempt from Capital Gains Tax (CGT), such as cars, motorcycles, or low-value collectables, cannot be used to offset your capital gains. Additionally, losses from certain leases and arrangements involving personal services income paid through an entity you’ve set up are also non-allowable.

When you report your losses to the ATO, you become eligible for a tax deduction. This deduction can be applied to reduce your overall tax liability. Moreover, if you have excess losses, you have the option to carry them forward to offset future tax liabilities in subsequent tax years.

There is no time limit to carry forward the capital loss so it can be carried forward indefinitely.

To ensure accurate calculations of your capital gains and losses, it is essential to maintain precise records of all your cryptocurrency transactions.

This includes details such as transaction dates, cryptocurrency costs, and any other pertinent information that may be relevant for tax purposes.

‍Lost or Stolen Crypto

‍If you have incurred a loss from theft or other crypto frauds, you may be able to claim a capital loss in Australia.

To claim a capital loss due to loss or theft with the ATO, you'll need to provide substantial evidence. Here's what you'll need:

• Proof of when you acquired and lost your private key.
• The wallet address associated with the lost key.
• Documentation showing the cost of acquiring the lost or stolen crypto.
• Records of the amount of crypto in the wallet when the key was lost.
• Evidence that you controlled the wallet.
• Proof that you possess the hardware where the wallet was stored.
• Transaction records show transfers to the wallet from an exchange you used.

‍

Australia: Handling Celsius Distributions Under Tax Law

The Celsius Network bankruptcy marked a significant fallout in the cryptocurrency industry, exposing vulnerabilities in centralized exchanges. Declared in mid-2022 amid liquidity challenges, it left thousands of investors unable to access their funds. The collapse revealed operational mismanagement and risky lending practices.

Bankruptcy proceedings aim to redistribute approximately $2 billion in assets, though many users face substantial losses. The legal and tax implications of the distributions received during the bankruptcy vary depending on the country. 

Below is a detailed analysis of how the United Kingdom (UK), the United States (US), and Australia handle these issues.

In Australia, cryptocurrencies are treated as capital assets, with losses or gains evaluated under Capital Gains Tax (CGT) rules.

• Claiming Capital Losses
  • A CGT event occurs when cryptocurrency is sold, exchanged, or partially liquidated. Losses can be claimed if the amount recovered is less than the cost base.
  • If holdings become worthless, Australia uses a CGT event D1 or similar mechanisms to allow claims for irrecoverable assets​.
• Non-Taxable Events
  • Receiving a reduced quantity of cryptocurrency without liquidation is not taxable. The adjusted cost base is applied to future CGT calculations.
• Reporting Losses
  • Losses must be reported in the CGT section of the annual tax return. They can offset capital gains but cannot be used to reduce regular income. Excess losses are carried forward​.

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Example

• Purchased 1 BTC for AUD 60,000.
• Celsius distributed AUD 15,000 in cash.
• Capital loss: AUD 60,000 - AUD 15,000 = AUD 45,000

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‍Crypto Tax Breaks Australia

‍While it is not possible to completely avoid paying taxes on your crypto transactions unless you have incurred a net loss during a tax year, there are strategies available to help minimize your tax liabilities. Apart from capital loss write-offs, here are some techniques you can employ to lower your tax bill:

Disposal of Long-Term Assets

‍Any crypto assets held for over a year are eligible for a 50% CGT exemption(33.33% for insurance companies and eligible super funds).

So if you’ve held some of your assets for over a year, you can sell them and pay 50% fewer taxes.

For instance, if you bought 2 ETH in tokens in your Binance wallet back in 2022 for 1,271 AUD each and sold them in 2024 for 3,921 AUD each.

The total gains of 5,300 AUD will only be considered to be 2,650 AUD and will be taxed accordingly.

Assets for Personal Use

‍According to the ATO, capital gains resulting from personal use assets are not taxed. Cryptocurrency is considered a personal use asset if it is primarily used to buy items for personal consumption.

However, if the primary purpose is an investment, generating profits, or conducting business, then cryptocurrency is not considered a personal use asset.

Unclear guidelines surrounding the classification of crypto assets as personal use assets can be a challenge.

However, by following best practices, you can increase the chances of successfully demonstrating the personal use nature of your transactions to the ATO.

• Segregate personal use crypto assets and investment assets into two wallets
• Don’t hold personal use assets for long durations
• Record all your transactions from the personal use wallet
• Use tokens directly to make purchases, never swap them for fiat currency
• Buy goods or services for personal consumption directly from the seller without the use of a payment gateway or other intermediary service for bill payment.

‍

Crypto Cost Basis Methods Australia

According to the ATO, for the average investor, any one of the LIFO, FIFO, HIFO, and ACB accounting methods can be used as long as each tax lot can be accurately identified.

However, if you are classified as a trader or someone who conducts crypto trades as a business, the ATO specifies that you should only utilize either the FIFO or the average cost basis accounting method.

It's important to align your accounting method with your investor classification to ensure compliance with the ATO guidelines.

‍Crypto Income Tax Australia

‍If you’re making an income from crypto assets, you’re liable to an income tax. There are multiple ways you can earn crypto as an income:

• Staking or mining rewards
• Strategically trading crypto assets
• Through lending activities on DeFi platforms
• Creating your NFTs and selling them
• Validating on-chain transactions and collecting prizes for them
• Earning through Play-2-Earn, Learn-2-Earn, Watch-2-Earn Web3 platforms like Brave, Coinbase Learning, Odyssey, and Axie Infinity
• Receiving airdrops
• Receiving referral rewards
• Receiving crypto as payments in exchange for a product or a service

‍

Crypto Income Tax Rates

‍Income tax rates in Australia depend on the total income made in a tax year. Given below are the income tax rates based on income:

Tax Rates for FY year 2023-24

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Tax Rates for FY year 2024-25

‍

How to Calculate Crypto Income

‍Calculating crypto income is a pretty straightforward process, all you need to do is add all the individual gains incurred from income-generating transactions and you’ll have your taxable income base.

Tax-Free Crypto Transactions

‍In Australia, the following crypto transactions are tax-free:

• Personal use asset transactions, such as buying cryptocurrency to hold as a personal investment, are exempt from capital gains tax.
• Transferring cryptocurrency between personal wallets.
• Trading cryptocurrency for other cryptocurrencies, as long as the transaction is not part of a profit-making scheme.
• Purchasing goods and services for personal use with cryptocurrencies. 

‍

Taxed Transactions

‍In Australia, cryptocurrency transactions are subject to tax laws and are considered taxable events. Some common crypto transactions that are taxable include:

• Trading or exchanging cryptocurrencies for fiat currency (e.g. AUD) or other cryptocurrencies.
• Receiving cryptocurrency as income, such as payment for goods or services
• Purchasing goods or services with crypto assets(for non-personal use)
• Disposing of cryptocurrencies, such as selling or exchanging them for fiat currency or other cryptocurrencies.
• Mining cryptocurrency, as the reward received is considered income.
• Staking or holding cryptocurrency to receive rewards, as the rewards are considered income.

‍

Tax on Mining Crypto Australia

‍Mining crypto is not taxable if pursued as a hobbyist, however, you might owe taxes to the ATO if you are involved in mining activities as a business.

‍Mining as a Hobby

‍If you're mining cryptocurrency as a hobby, there is no need to report your income on receipt. You'll only be required to pay taxes when you eventually sell those coins.

Unlike those who mine cryptocurrency as a business, hobbyist miners don't have the benefit of deducting expenses such as equipment costs, monthly fees, and electricity bills from their taxable income.

Mining as a Business

‍If your mining activity classifies you as a business, it's mandatory to report the fair value of the received tokens as soon as you receive them.

All the figures to be reported must be in AUD, and you are entitled to claim tax deductions for expenses associated with the mining operation, such as equipment, electricity, and so on.

Tax on Staking Crypto

‍In Australia, staking rewards are considered regular income and are subject to income tax. However, the ATO is yet to offer specific guidance on this matter, leading to debates among crypto stakes.

For example, ETH 2.0 stakers faced challenges as they couldn't immediately withdraw and dispose of their assets. This created uncertainty about whether taxes should be paid based on the fair market value of the tokens upon receipt or on the day when investors could access and dispose of them.

You need to declare this income in your tax return as other income.

If you later sell, or otherwise dispose of, your staking rewards, you'll still need to pay Capital Gains Tax on any gain, just like you would if you disposed of any other crypto.

You can use the fair market value you calculated when you received your crypto as your cost basis to calculate gains and losses.

Crypto Margin Trading, Futures, and CFDs

‍Crypto margin trading, futures, and CFDs are taxed as income in Australia. The value of the asset at the time of the transaction is your tax base. The amount is converted to AUD for tax reporting.

If the trading activity is considered to be a business, then the individual is eligible to deduct related business expenses, such as trading software, internet costs, and so on.

For personal investment in Australia, individuals can only claim a capital loss from crypto margin trading, futures, and CFDs if the value of the cryptocurrency decreases.

This loss can be offset by capital gains from other investments. It is recommended to consult with a professional tax advisor to understand the specific tax implications of these activities and receive personalized advice.

Crypto Gifts and Donation Taxes

‍Gifting and donating crypto in Australia can have tax implications, but it depends on the situation. Generally, if you’re donating to a Deductible Gift Recipient (DGR), you may get a tax deduction. However, donations to non-DGRs won’t be eligible. Here’s what the ATO says about taxing crypto gifts and donations.

Giving Crypto as a Gift - Capital Gains Tax

This one might sting a bit. Whether you’re being generous or just want to offload some crypto, the ATO requires you to pay Capital Gains Tax on any profits made from giving away crypto.

Receiving Crypto as a Gift - Tax-Free

If someone gifts you crypto, consider yourself fortunate. Not only do you get the crypto, but you also don’t have to pay any tax on it. However, you should note down the fair market value of the crypto on the day you receive it. This will be your cost basis if you decide to sell or even re-gift the crypto later.

Selling Your Crypto Gift - Capital Gains Tax

Here’s the catch. While receiving a crypto gift is tax-free, selling, swapping, spending, or even re-gifting it is not. Any disposal of the crypto is taxed as a capital gain, with your cost basis being the value of the crypto on the day you receive it.

Donating Crypto - Tax-Free

In Australia, donating crypto works similarly to donating cash. If you donate to a DGR, your donation is tax-deductible. The donation amount is calculated based on the value of the cryptocurrency at the time it’s donated, and any related capital gain is exempt from tax.

NFT Taxes Australia

‍NFTs have surged in popularity over the past year, and the ATO treats them as crypto assets, similar to other cryptocurrencies. This means

NFTs are considered Capital Gains Tax (CGT) assets for investors and will follow the same tax rules as other crypto assets. How your NFT is taxed will depend on your specific situation, including whether you’re an investor or running a business.

Creating and Selling NFTs - Income Tax

‍If you’re creating and selling NFTs, how you’re taxed will depend on whether it’s seen as a hobby, an investment, or a business.

If it’s considered a business, the income from selling NFTs is treated like any other business income and will be subject to Income Tax.

It’s best to consult with a qualified accountant to understand how the ATO views your activities and what that means for your taxes.

Additionally, if you’re farming NFTs for staking rewards, this income will likely be treated similarly to DeFi staking rewards and be subject to Income Tax.

Buying, Selling, and Trading NFTs - Capital Gains Tax

‍For those not considered professional traders, Capital Gains Tax applies in the following scenarios:

1. Buying an NFT with Cryptocurrency: You’ll owe Capital Gains Tax on any profit made from the cryptocurrency you used to purchase the NFT (unless it qualifies as a personal use asset, in which case no CGT is due).
2. Selling an NFT for Cryptocurrency or Fiat Currency: You’ll need to pay Capital Gains Tax on any profit made from the sale of the NFT.
3. Swapping an NFT for Another NFT: Any gain from the NFT you’re swapping away is subject to Capital Gains Tax.

NOTE:
if an individual acquires an NFT for resale, the sale will be considered a taxable supply and may be subject to goods and services tax (GST).

‍

‍DAO Taxes

‍DAOs are member-owned communities with a shared vision. All the decisions in a DAO are made by the members in the absence of central leadership.

DAOs are new-age institutions that aim to democratise decision-making and allow people to have a say in decisions that directly affect them.

DAOs are often called the soul of Web3 and enable members to earn rewards in multiple ways. DAO contributors are rewarded for their contributions to the organization, similar to how centralized organizations pay salaries to their employees.

Moreover, DAOs pay bounties for one-time projects and redistribute any profits generated through operations.

The ATO is yet to release specific guidance on how income from DAOs is viewed from a tax perspective. We are constantly on the lookout for relevant guidelines and relevant information will be added here as soon as the guidelines hit our radar.

ICO Taxes

‍In the realm of cryptocurrencies, ICOs represent opportunities for investors to acquire tokens/coins from an unreleased crypto project.

Typically, this acquisition occurs through the exchange of conventional tokens like Bitcoin or Ethereum.

From the perspective of the ATO, this constitutes a crypto-to-crypto trade. The taxable event arises at the precise moment of the ICO transaction when you receive the newly minted tokens.

Subsequently, when you decide to sell these tokens at a later point in time, the cost base of that transaction will be determined by the cryptocurrency's value on the date of the ICO, which you initially utilized for the purchase.

DeFi Crypto Taxes Australia

‍The ATO has finally provided guidelines on how DeFi transactions are taxed for Australian investors.

According to the ATO, DeFi transactions can lead to either Capital Gains Tax or assessable income, depending on the type of transaction.

• If you're lending or adding liquidity to pools, the ATO considers these as crypto-to-crypto transactions, which means any gains are subject to Capital Gains Tax.
• When you earn new tokens through DeFi rewards or similar activities, these are treated like interest income, and the market value of the tokens is considered assessable income.
• For wrapped tokens, the ATO has clarified that wrapping your crypto triggers a Capital Gains Tax event, making any gains taxable.

This stance on wrapped tokens can be confusing since wrapped assets like BTC and wrapped BTC represent the same underlying asset.

The question arises as to whether there’s actual economic disposal when exchanged, especially since wrapping is often used to facilitate transactions on non-native blockchains to reduce fees, such as bidding for NFTs.

When to Report Crypto Taxes in Australia

‍In Australia, the tax year extends from 1 July to 30 June of the subsequent year. If you are an individual who is personally filing your tax return for the period of 1 July 2024 to 30 June 2025, the deadline for submitting your taxes is 31 October 2025.

How to Report Crypto Taxes in Australia

‍With your reconciled cryptocurrency calculations in hand, you have two options for filing your taxes in Australia.

You can choose the traditional method of filling out a paper tax form and mailing it to the ATO or you can opt for the convenient and secure online option through myTax.

This online service, associated with the ATO, offers a fast and easy way to prepare and file your tax return, helping you receive your refund sooner.

Here's a step-by-step tutorial on how to file your crypto taxes online using the myTax portal:

• Collect all the necessary information related to your cryptocurrency transactions. This includes details of each transaction such as dates, amounts, and any applicable fees. Make sure you have records of your cryptocurrency purchases, sales, trades, and any other relevant transactions.
• Access the ATO website.
• Log in to myGov Click on the "Log in" or "Sign in with myGov" button on the ATO homepage. Enter your myGov username and password to access your myGov account. If you don't have a myGov account, you will need to create one by following the provided instructions.
• Once logged in to myGov, locate and select the myTax option from the available services. This will redirect you to the myTax portal on the ATO website.
• Select the option to start your tax return for the relevant financial year (e.g., 2023-2024). Follow the prompts and provide the required information, such as your details and income sources.
• When you reach the section for declaring income, look for the category related to cryptocurrency or digital assets. Select the appropriate option to indicate that you have engaged in cryptocurrency transactions during the tax year.
• Enter the relevant details of your cryptocurrency transactions as requested in the form. This may include the type of transaction (e.g., purchase, sale, trade), dates, amounts, and any associated costs or fees. Be thorough and accurate while providing this information.
• Calculate gains or losses Based on the information provided, the myTax portal will automatically calculate the gains or losses from your cryptocurrency transactions. Ensure that the calculations are accurate and reflect your actual financial activities.
• Complete the tax return Continue filling out the remaining sections of the tax return, including any other income sources, deductions, and credits you may be eligible for. Review the entire form to ensure all information is accurate and up to date.
• Submit your tax return Once you have completed all the necessary sections, review your tax return one final time. If you are satisfied that everything is correct, submit your tax return electronically through the myTax portal. Follow any additional instructions or prompts provided.

‍

What Crypto records will the ATO want?

‍You should maintain the following records to avoid complications when filing your taxes with the ATO:

• Receipts: Save proof of all purchases, transfers, or sales of your crypto assets.
• Transaction Dates: Note down the date of each transaction.
• Transaction Details: Record the purpose of each transaction and details about the other party (such as their crypto asset address).
• Exchange Records: Keep a log of transactions on crypto exchanges.
• Value Records: Document the value of each crypto asset in AUD at the time of each transaction.
• Costs Records: Maintain records of any costs related to agents, accountants, or legal services.
• Wallet Records: Keep track of your digital wallet details and access keys.
• Software Costs: Record any expenses related to software used for managing your taxes

‍

How long to keep records

‍The ATO expects you to keep detailed records of your cryptocurrency transactions for 5 years. This period starts from the date you prepared or received the records, or from the date you completed the transactions, whichever is later.

‍How to File Crypto Taxes Using Kryptos?

Now that you’re aware of how your crypto transactions are taxed and what forms you need to fill out to complete your tax report, here’s a step-wise breakdown of how Kryptos can make this task easier for you:

• Visit Kryptos and sign up using your email or Google/Apple Account
• Choose your country, currency, time zone, and accounting method
• Import all your transactions from wallets and crypto exchanges
• Choose your preferred report and click on the generate report option on the left side of your screen and let Kryptos do all the accounting.
• Once your Tax report is ready, you can download it in PDF format.

If you still need clarification regarding the integrations or generating your tax reports, you refer to our video guide here.

‍How to Avoid Crypto Taxes in Australia?

Although there is no legal way to avoid crypto taxes entirely. You can employ some strategies to lower your tax bill in Australia.

1. Deduct your losses and trading fees: Trading fees and losses are tax-deductible in Australia, contingent on whether you’re viewed as an individual investor or a business by the ATO.
2. Deduct your mining expenses: If you’re involved in mining as a business, you can deduct mining expenses from your tax bill in Australia. You can learn more about it in the Are-you-in-business section on the ATO website.
3. Invest in Australian BTC-ETFs: A Bitcoin ETF launched on 27 April 2022, offering a tax-efficient investment option for investors. ETFs track Bitcoin's price and simplify the investment process. Some Bitcoin ETFs may distribute dividends, offering Australian investors potential tax advantages through franking credits. These credits offset corporate taxes paid by the ETF's constituent companies, reducing investors' tax liability.
4. Hold your assets: If you hold on to your assets for more than 12 months before disposing of them, you can get a 50% exemption on the capital gain incurred on the transaction.

‍
FAQs

1. Can the ATO track crypto transactions?

Yes, the ATO can track cryptocurrency transactions to some extent. The ATO has access to a range of information and data sources, including cryptocurrency exchange data, to help it identify individuals who may not have properly declared their cryptocurrency transactions for tax purposes.

In recent years, the ATO has been taking an increasingly active approach to enforcing tax obligations related to cryptocurrency transactions. This includes using data matching to identify individuals who have not declared cryptocurrency gains or who have underreported their taxable income.

‍2. Is cryptocurrency legal in Australia?

Yes, crypto is legal in Australia and is considered a capital asset(property) instead of a currency by the ATO(Australian Taxation Office) and taxed accordingly.

3. How are airdrops and forks taxed in Australia?

In Australia, airdropped and forked cryptocurrencies are considered taxable income and must be reported on an individual's tax return. The value of the airdropped or forked cryptocurrency on the date it was received is considered its cost to calculate capital gains tax when it is later sold. If the cryptocurrency is held for 12 months or more, it may be eligible for the capital gains tax discount. Moreover, suppose the airdrop or fork is part of a profit-making scheme or carried out in the course of carrying on a business. In that case, the value of the airdropped or forked cryptocurrency may be subject to ordinary income tax.

4. What happens when I move crypto between wallets, exchanges and pools?

As long as you’re moving assets between wallets or exchanges that you own, the event is not considered a taxable event. However, the transaction fees paid to move the assets are considered disposal of assets and are subjected to a capital gains tax in Australia.

Similarly, funds moved from one liquidity pool to another follow the same rule. It’s a non-taxable event in the eyes of ATO. 
However, note that it’s essential to keep track of all these transactions to accurately calculate the cost basis for all your assets and that may be an intimidating task for many as their investments are spread across wallets, exchanges, and DeFi protocols.

An intelligent step would be to use an online crypto tax tool like Kryptos, which can easily track all your transactions from across your trading and investment profile and even create legally compliant tax reports seamlessly with a click of a button. All you need to do is add all your wallets and investment profiles on the website and let the software do the job for you.

‍5. What if I can't afford my crypto tax bill?

If you cannot afford to pay your crypto tax bill in Australia, you have several options:

• You can contact the Australian Taxation Office (ATO) and request to set up a payment plan to pay off the tax debt over a longer period.
• You can request an extension of time to pay the tax debt.
• If you are experiencing financial hardship, you can apply to have your tax debt remitted (cancelled) or varied (rearranged).
• You may consider seeking assistance from a tax professional or financial advisor to help you manage your tax debt.

6. Is there a legal way to avoid taxes in Australia?

No, there is no legal way to avoid paying taxes in Australia. It is a legal obligation to accurately report all taxable income, including profits from cryptocurrency transactions, and pay the appropriate amount of tax. Failing to report income and pay the required taxes accurately can result in significant fines and penalties, as well as potential criminal charges. It's essential to comply with all tax laws and regulations in Australia and seek professional advice if necessary.

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All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position/stance, you should always consider seeking independent legal, financial, taxation or other advice from professionals. Kryptos is not liable for any loss caused by the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!

Since the TAA(Tax Authority Austria) released revised guidelines on crypto taxation effective March 1st, 2022, completely overhauling the crypto tax infrastructure, there has been confusion and uncertainty in the Austrian crypto space. People need clarification about whether their investments and holdings fall under the old or new tax regime. And this led to friction for crypto enthusiasts across the country.

Therefore, we decided to curate an extensive crypto tax guide for Austrian residents covering crypto taxation before and after the new guidelines came into effect. The idea is to clarify new rules clearly for investors so they don’t have to be intimated by the tax guidelines and can file their taxes conveniently.

The new guidelines make things more complicated for us to explain. Although we have tried our best to segment this guide in a way that’s convenient for you to understand, we suggest going through the sections carefully to avoid missing out on crucial details.

With that out of the way, let’s get into it.

How is Crypto Taxed in Austria?

Austria implemented a new tax reform on March 1st, 2022, that has changed the way crypto transactions are taxed.

The amount of taxes you pay on crypto transactions depends on their nature in Austria. Under the new regulations, a straightforward flat tax rate of 27.5% will apply to all cryptocurrency transactions.

You’ll incur a 27.5% tax in the following cases:

• Converting cryptocurrency into fiat currency
• Using cryptocurrency to purchase goods or services
• Mining cryptocurrency
• Receiving interest or earnings from cryptocurrency investments

It is important to note that, unlike other tax jurisdictions, Austria doesn't have a dedicated capital gains tax and any profits generated by selling, swapping, or spending crypto assets are taxed under the existing income tax laws.

Some crypto transactions were subject to the 27.5% interest-bearing tax rate. Cryptocurrency purchased or obtained on or after February 28, 2021, falls under the updated tax regulations.

However, cryptocurrency acquired prior to February 28, 2021, remains governed by the earlier tax provisions.

Example:

Consider the following transactions:

08/01/2021 - Alex bought 2 ETH for €2,000 each in Binance Wallet

06/09/2023 - Alex bought 1 BTC for €15,000 in Binance Wallet

16/10/2023 - Alex bought 1 BTC for €18,000 in Binance Wallet

18/06/2024 - Alex sold 1 ETH for €2,200 from Binance Wallet

13/08/2024 - Alex sold 1 BTC for €40,000 from Binance Wallet

17/09/2024 - Alex sold 1 BTC for €42,500 from Binance Wallet

Now as evident from above, a total of three disposals were made. So let’s look into the capital gains calculations of each one and the tax consequences arising from them.

1st Disposal

I ETH sold for €2,200 on 18/06/2024

Now, since we’re using the FIFO accounting method as recommended by the BMF,

This is the same ETH token that was acquired on 08/03/2021 for €2,000

Disposal Amount = €2,200
Cost basis = €2,000
Capital Gain = Disposal Amount - Cost Basis = €2,200 - €2,000 = €200

These gains are non-taxable because the disposed token was acquired before 28th February 2021, and it was a long-term gain.

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2nd Disposal

1 BTC sold for €40,000 on 13/08/2024

If we go by the FIFO accounting rule, this is the same BTC acquired on 06/01/2023 for €18000.

Disposal Amount = €40,000
Cost basis = €18,000
Capital Gain = Disposal Amount - Cost Basis = €40,000 - €15,000 = €25,000

The gains will attract a 27.5% tax liability. 

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3rd Disposal

1 BTC sold for €42,500 on 17/09/2024

Based on the FIFO accounting this is the same BTC acquired on 16/10/2023 for €18,000.

Disposal Amount = €22,000
Cost Basis = €18,000
Capital Gain =  €42,500 - €18,000 = €24,500

The gains will attract a 27.5% tax liability. 

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Additionally, an interest-bearing tax applies to transactions where you earn interest income. All transactions that generate interest income are taxed at a flat rate of 27.5%.

The following transactions fall under the interest-bearing tax category in Austria:

• Staking crypto.
• Lending crypto.
• Yield farming.
• Liquidity mining.

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Can the BMF Track Crypto?

Indeed, Austria's crypto tax reform has made it clear that investors are required to report their crypto transactions to the BMF and fulfil their tax obligations accordingly.

In line with the practices of other European tax authorities, the BMF is working with prominent crypto exchanges to acquire KYC (Know Your Customer) data.

Furthermore, the forthcoming EU directive, DAC8, grants BMF the authority to verify crypto ownership and scrutinize the accounts of crypto companies.

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Crypto Capital Gains

Old Tax Regime

Before the enforcement of the new regulations on March 1st, 2022, Austria did not have a dedicated capital gains tax structure in effect.

Instead, all proceeds obtained from the disposal of assets were subjected to taxation under the income tax regulations.

If the assets were held for less than one year before being sold, they were treated as short-term capital gains and incurred tax obligations as per the income tax rules. Conversely, if the assets were held for over one year before their sale, no taxes were imposed on the resulting gains.

The rate at which your short-term gains are taxed depends on your income level and the type of transaction you’re involved in. Here are the tax rates based on income level:

You might be wondering how these tax rules apply to investors in 2023. Well, any assets that were purchased before March 1st, 2022, will continue to be taxed based on the previous tax rules. Additionally, assets that were acquired on or before February 28th, 2022, and are still held by investors are considered non-taxable under the new guidelines.

It is important to note that certain transactions involving interest-bearing activities such as staking, lending, liquidity mining, and yield farming will be subject to a fixed interest-bearing tax rate of 27.5%.

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New Tax Regime

‍The recent tax reform brings about significant changes that impact crypto investors. The rates at which gains are taxed have been altered, and long-term capital gains are no longer exempt from taxes, except for specific legacy holdings, which we will delve into shortly.

However, it's worth noting that the taxation of interest-bearing transactions remains unchanged even after the tax reform, providing a sense of stability.

The latest tax reform has introduced a notable shift for crypto investors, as all transactions resulting in short-term capital gains are now subject to the stock tax rate of 27.5%.

Furthermore, any assets that were held before the implementation of the new tax regime will be categorized as legacy holdings and will not be subject to taxation under the revised tax laws.

You can voluntarily opt-in to the new tax laws from January 1, 2022, if you wish to.

But why would someone want to do that?

Well, because it can save you money.

Note that in the previous tax regime, your gains were taxed based on your income, so if you happen to be in the higher income group, attracting a 35-40% tax rate, you can opt-in to the new tax regime where you only have to pay a flat tax rate of 27.5%.

One important addition to the tax framework has been the allowance for taxpayers to offset their capital losses against their capital gains, which was previously not allowed.

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Capital Gains Tax Rate

We’ve already discussed the tax rate from the previous tax regime in the table above. After the tax reform, all your gains will be subjected to a flat stock tax rate of 27.5%.

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How to Calculate Crypto Gains and Losses

‍Now that you understand how your gains will be taxed and the taxes you'll be responsible for, it's crucial to determine the extent of your gains to estimate the corresponding tax amount owed to the tax authorities.

Calculating your capital gain or loss is relatively straightforward. You can use the following formula:

Capital Gain/Loss =
(Disposal Amount or Selling Price) - (Cost Basis)

For an accurate calculation of your capital gain or loss, two key pieces of information are required: the disposal amount or selling price of the asset and the cost basis. If you are uncertain about the cost basis, there is no need to be concerned. It simply refers to the total amount you paid to acquire the asset, including any additional fees like gas or transaction fees.

It is essential to understand that when determining the cost basis, one should adhere to the accounting method recommended by the tax authorities, which is typically the First-In-First-Out (FIFO) method.

We will provide more comprehensive information regarding this accounting method later in the guide.

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Example:

Consider the following transactions:

03/02/2022 - Andrew buys 2 BTC for €14,000 each
06/04/2022 - Andrew buys 3 ETH for €1,400 each
05/06/2022 - Andrew buys 1 BTC for €18,000 and 2 ETH for €1,600 each
13/06/2024 - Andrew sells 1 BTC for €20,000
19/08/2024 - Andrew sells 3 ETH for €2,000 each

As you can see, Andrew made two disposals. Let’s calculate the gain for each disposal one at a time.

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1st Disposal

Andrew sells 1 BTC for €20,000

Please be aware that in this guide, we will be using the FIFO accounting method as recommended by the BMF. A more comprehensive discussion of accounting methods is provided later in the guide.

For now, a straightforward way to comprehend how the FIFO (First-In-First-Out) method operates is to imagine that the first asset you purchase is the first one you sell.

Now, this is the same BTC acquired on 03/02/2022 for €14,000

Cost Basis = €14,000
Disposal Amount = €20,000
Capital Gain/Loss = Disposal Amount - Cost Basis = €20,000 - €14,000 = €6,000

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2nd Disposal

3 ETH sold for €2,000 each.

If we use the FIFO accounting rules, these ETH tokens are the same ones that were acquired on 06/04/22 for €1,400 each

Cost Base =  €1,400
Disposal Amount = €2,000
Capital Gain for 1 ETH = €2,000 - €1,400 = €600

So for 3 tokens, the total gain comes out to be = 3*600 = €1,800

Total Gain for both disposals = €6,000 + €1,800 = €7,800

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Crypto Losses

Old Tax Regime

Before March 2022, taxpayers were not allowed to offset their capital losses and had to do away with them without availing of tax benefits.

New Tax Regime

Under the new tax regime in Austria, taxpayers are granted the ability to offset their capital losses with their capital gains, considering that cryptocurrencies are now recognized as tangible assets.

However, it's important to note that you can only offset your losses against gains by applying the same taxation principles. This means that if you intend to neutralize your crypto losses, you can only do so by offsetting them against capital gains that fall within the 27.5% tax bracket.

In simpler terms, losses incurred before March 1, 2022, cannot be utilized to offset gains achieved after the implementation of the tax reform, unless you voluntarily choose taxation under the new tax regulations.

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Lost or Stolen Crypto

The BMF is yet to release specific guidance on how lost or stolen crypto is viewed from a tax perspective.

However, it is likely that these losses will be assessed on a case-by-case basis and may be deducted from your overall income to lower your tax bill, given that you can offer all the supporting documents to prove the ownership of assets before theft.

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Crypto Tax Breaks Austria

Most countries offer tax breaks to crypto investors, and Austria is no exception. The Austrian tax authorities offer multiple tax breaks under both the old and new tax regimes. Listed below are some of them:

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Old Tax Regime

1. Personal Income Tax Allowance: Under the old income tax laws, you wouldn’t have to pay any taxes on your gains if your total income was less than €11,000.‍
2. HODling Crypto: Under the previous tax laws, long-term capital gains were exempt from taxation. This meant that if you held onto your assets for a period exceeding 12 months before selling them, the resulting gains were not subject to taxes.

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New Tax Regime

1. ‍Speculative Trade Allowance: If you make less than €440 in speculative trades in a tax year, then your gains or profits are considered tax-free.

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Crypto Cost Basis Method Austria

The FIFO (First-In First-Out) cost basis method is recommended for cost basis calculations in Austria. This method assumes that the first assets purchased or acquired are also the first assets sold or disposed of.

In crypto investments, FIFO would mean that the first cryptocurrencies purchased are also the first ones sold.

Here's an example of how the FIFO accounting method works:

Consider the following transactions made by Mark:

• Bought 1 BTC for €10,000 on 01/01/2024 in Binance Wallet
• Bought 1 ETH for €1,000 on 01/02/2024 in Binance Wallet
• Bought 1 BTC for €20,000 on 01/03/2024 in Binance Wallet
• Bought 2 ETH for €2,000 each on 01/04/2024 in Binance Wallet
• Bought 3 BTC for €30,000 each on 01/05/2024 in Binance Wallet
• Bought 3 ETH for €3,000 each on 01/06/2024 in Binance Wallet

Let's say you decide to sell 2 BTC on 01/07/2024 when the price is €35,000 per BTC.

Using the FIFO accounting method, you would sell the 2 BTC you purchased on 01/01/2024 and 01/03/2024 as they were the first two BTC purchased.

For the BTC purchased on 01/01/2024, the cost basis is €10,000 and for the BTC purchased on 01/03/2024 the cost basis is €20,000.So the collective cost basis for both BTC tokens would be = €10,000 + €20,000 = € 30,000

Now the total amount received on the disposal of 2 BTC = €70,000

Capital Gain/Loss = €70,000 - €30,000 = €40,000

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Crypto Income Tax Austria

As previously mentioned, the tax authorities regarded gains from crypto-related transactions as income and subjected them to taxation according to income tax laws.

However, under the new tax guidelines, a new overarching tax known as the stock tax has been introduced, replacing the previous income tax system. This change signifies a shift in the taxation framework for crypto-related gains.

We have discussed it in detail in the above section titled “Crypto Capital Gains”.

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How to Calculate Crypto Income

For assets bought before March 1, 2022, your net income is simply the sum of capital gains made for all short-term trades, as any disposal made after over a year of holding these assets is not taxable under the old tax guidelines.

You can refer to the above section titled “How to calculate crypto gains and losses” if you have any doubts about how to calculate your capital gains.

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Tax-Free Crypto Transactions

Listed below are some tax-free transactions in Austria under both the new and old tax laws:

1. Buying crypto with fiat
2. HODLing crypto
3. Transferring crypto between wallets
4. Disposing of crypto assets acquired before February 28, 2022, after having held them for over a year
5. Gifting crypto

In addition to this, by opting into the new tax reform, you can avail of some additional tax benefits:

1. Swapping one crypto asset for another
2. Staking rewards from PoS networks

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Taxed Crypto Transactions

Listed below are some of the taxed crypto transactions in Austria:

1. Selling crypto
2. Earning interest income from lending, staking, and yield farming
3. Mining crypto
4. New tokens received from hard forks and airdrops

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Tax On Mining Crypto in Austria

Mined tokens are taxed based on the timing of the mining activity. If the tokens were mined on or before February 28, 2022, they would be subject to income tax and if the tokens were mined on or after March 1, 2022, they would be taxed upon receipt at a flat rate of 27.5%.

When disposing of these mined tokens, if the disposal occurs before March 1, 2022, income tax will be imposed on the transactions, with the tax rate varying based on your income bracket. However, if the disposal takes place after March 1, 2022, a flat rate of 27.5% will be applicable.

Starting from March 1, 2022, the trading of mined coins is tax-free. Furthermore, if you mined coins before February 28, 2021, and held them for over a year, these holdings will be considered legacy assets. As a result, any profits from selling, trading, or utilizing these coins will not be subject to tax.

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Tax on Staking Crypto

The BMF under the new tax reform clearly states that income deemed to be generated is taxable. According to a document titled Tax Treatment of Cryptocurrencies published by the Federal Ministry Republic of Austria

“...current income is not deemed to be generated if:

The service associated with processing the transaction consists primarily of investing (staking) existing cryptocurrency…”

However, tokens received as staking rewards inherit a cost basis of zero to ensure that all your gains are taxed once you decide to dispose of these tokens.

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Crypto Margin Trades, Future, and CFDs

The BMF lacks a definitive framework for determining the tax implications of trading activities involving crypto margin trading, futures, and other CFDs. Nonetheless, it's worth noting that the 27.5% tax rate that applies to capital gains from financial assets, including derivatives, generally also pertains to crypto.

It's recommended that you consult with a tax expert for specialized guidance regarding the taxation of crypto derivatives and other CFDs.

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DAO Taxes

Although the BMF guidelines do not specifically mention income from DAOs, they do mention cryptocurrency holdings acquired using a technical activity involving transaction processing services are deemed to be currency income and are subject to income tax.

However, the nature and scope of these technical activities should not extend beyond simple asset management work. Otherwise, the income would be classified as income from commercial activity. Working at a DAO involves completing more complex tasks. And therefore income from DAOs may be categorised as income from commercial activity.

We suggest seeking advice from an experienced tax advisor to understand how income from DAOs is taxed.

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ICO Taxes

ICOs are events that allow investors to own native tokens from unreleased projects at a discounted price. It is similar to IPOs from traditional markets and involves swapping mainstream tokens like BTC and ETH to get access to project-native tokens.

Although the guidelines do not specifically mention how income from ICOs will be taxed, these transactions will likely be viewed as crypto-to-crypto trades. The BMF does not consider crypto-to-crypto trades as taxable.

However, it is advisable to seek guidance from an experienced tax accountant to avoid legal complications in the future.

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Crypto Gifts and Donations Taxes

If you're considering gifting or donating crypto assets in Austria, there is good news for you. Gifting crypto is not subject to taxation. However, there are certain reporting requirements to be aware of.

If you are gifting assets to your relatives, any donations exceeding €50,000 should be reported to the BMF. If you are gifting to friends or third parties, the reporting threshold decreases to €15,000.

While the BMF still needs to provide specific guidelines for crypto donations, based on existing knowledge about fiat donations, it is reasonable to assume that crypto donations made to registered charities are eligible for tax deductions. Furthermore, you are not required to report these transactions to the BMF.

The organization receiving the grant is responsible for reporting the transactions to the BMF, and the information will be automatically included in your employee tax assessment report.

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NFT Taxes Austria

In Austria, the taxation of NFTs largely depends on their intended use and the specific circumstances of their acquisition and sale.

If an individual buys an NFT as an investment and later sells it for a profit, any capital gains realized from the sale will be taxed based on the date of disposal.

If acquired and disposed of on or after March 1, 2022, the gains will be subjected to a flat rate of 27.5% in the new tax regime, and if disposed of before that, the gains will be subjected to the regular income tax rates.

On the other hand, if an NFT is acquired and sold as part of a business activity, the transaction may be subject to Value Added Tax (VAT) at a rate of 20%.

This would be the case. For example, if a company creates and sells NFTs as part of its regular business operations.

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DeFi Crypto Taxes Austria

The BMF is yet to release clear guidelines on the taxation of DeFi transactions. However, this does not imply that DeFi transactions are tax-free.

It just means that you need to interpret the current guidelines and apply them to your DeFi transactions to calculate your NFT taxes.

Lucky for you we deliberated this matter with tax professionals, and here’s what we found about the taxation of DeFi transactions:

• Interest income from DeFi Protocols: A flat 27.5% tax on receipt of tokens and upon disposal
• Borrowing Crypto assets from DeFi Protocols: Tax-Free‍
• Paying interest back to DeFi Protocols: The transaction is considered tax-free until you’re making interest payments using fiat currency.‍
• Staking and Liquidity Mining on DeFi Protocols: A flat 27.5% tax on the tokens upon receipt.‍
• Yield Farming: A flat 27.5% tax rate on tokens upon receipt and disposal.‍
• Adding/Removing Liquidity: Tax-Free‍
• Income from Engage/play to Earn DeFi Protocols: A flat 27.5% tax rate on tokens upon receipt and disposal.‍
• Income from Margin Trades and Futures on DeFi Protocols: A flat 27.5% tax on any realized gains.

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How are Airdrops and Forks Taxed in Austria

Soft forks are non considered taxable by the BMF as no new tokens are redistributed among the chain participants.

Tokens received through airdrops and hard forks are treated similarly for tax purposes. They are not taxed upon receipt and have a cost basis of €0, which is not good news. This means that when you sell your tokens, you will be taxed on their entire value, not just the gains.

If you sell these tokens on or before February 28, 2022, regular income tax rules will apply, but if you sell them after that date, a flat tax rate of 27.5% will be charged on the sale.

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When to Report Crypto Taxes in Austria

The financial year in Austria runs from January 1 to December 31. Taxpayers must file their returns by April 30 (for paper forms) or June 30 (for online returns) of the following year.

For instance, the current financial year is from January 1, 2024, to December 31, 2025, and the deadline for postal returns is April 30, 2025, while for online returns, it's June 30, 2025.

It's essential to keep these dates in mind to avoid penalties for late submissions.

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How to Report Crypto Taxes in Austria

When filing taxes in Austria, cryptocurrency investments are considered part of the taxpayer's annual return.

Such investments should be reported electronically using the FinanzOnline portal before the 30th of June. Specifically, individuals should report their cryptocurrency investments under the "other income" category on their Income Tax Return - E1.

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How to File Crypto Taxes in Austria

Here’s a step-wise tutorial on how to file your crypto taxes using the online Finanz portal:

1. Create a FinanzOnline account - If you don't already have one, you must register with the Austrian tax authorities by creating a FinanzOnline account. You can do this by visiting the FinanzOnline website and following the registration process.‍
2. Gather all necessary information - Before starting the tax filing process, you should gather all the relevant information and documents to complete the process. This includes your income information, deductions, and any crypto investments you made during the tax year.‍
3. Log in to your FinanzOnline account - Once you have all the necessary information, log in to your FinanzOnline account using your username and password.‍
4. Select the tax return form - From the menu, select the tax return form that applies to you. For example, if you are an individual, select the "Income Tax Return - E1" form.‍
5. Fill out the tax return form - You will be directed to the tax return form, which you need to fill out with your income and expense details. Ensure that you accurately report all your crypto investments under the category of "other income."‍
6. Submit the tax return - After filling out the form, you need to submit it electronically by clicking the "Submit" button. Once submitted, you will receive a confirmation message that your tax return has been successfully filed.‍
7. Pay any outstanding tax - If you owe any tax, you will be required to make the payment electronically via the FinanzOnline portal. You can do this using various payment options provided by the portal.‍
8. Track the status of your return - You can check the status of your tax return by logging into your FinanzOnline account and selecting the "Tax Return Status" option from the menu.

Note that you need to complete all your income calculations and review them thoroughly before you file your taxes so that you can validate the tax calculations made by the software. One way to avoid this is by using crypto tax software like Kryptos to do these calculations.

The platform can auto-fetch all your transactions and calculate the cost basis for each one of them, generating legally compliant tax reports in a matter of minutes.

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How to File Crypto Taxes Using Kryptos?

Now that you’re aware of how your crypto transactions are taxed and what forms you need to fill out to complete your tax report, here’s a step-wise breakdown of how Kryptos can make this task easier for you:

1. Visit Kryptos and sign up using your email or Google/Apple Account
2. Choose your country, currency, time zone, and accounting method
3. Import all your transactions from wallets and crypto exchanges
4. Choose your preferred report and click on the generate report option on the left side of your screen and let Kryptos do all the accounting.
5. Once your Tax report is ready, you can download it in PDF format.

If you need clarification regarding the integrations or generating your tax reports, you refer to our video guide here.

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What Crypto Records Will the BMF Want?

The BMF hasn’t released an official list of documents that taxpayers need to maintain, but as a general rule, maintain the following documents to avoid complications while filing taxes:

• The date of the transaction
• Which cryptocurrency was part of the transaction
• Type of transaction
• How much was bought, sold, or exchanged
• The value of the cryptocurrency in euro at the time of the transaction
• Exchange records and other relevant statements
• Wallet addresses

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How to Avoid Tax on Cryptocurrency in Austria

There is no legal way to avoid crypto taxes altogether in Austria and you might end up in trouble with the tax authorities if you choose to do so. However, there are ways you can reduce your tax bill and pay less taxes. We’ve already discussed most of them in detail in prior sections of the guide under the section titled “Crypto Tax Breaks Austria''. Here’s a summary:

• HODL assets bought on or before Feb 28, 2022, as long-term capital gains were not considered taxable under the old tax laws
• Swap one crypto asset for another. It’s considered non-taxable after the tax reform.
• Opt-in for taxation under the new tax rules as it might significantly reduce the rate at which your gains will be taxed, especially if you fall in the higher tax bracket.
• Donate because gifts to registered charities are tax-deductible.

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FAQs

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1. Is Crypto legal in Austria?

‍

Yes, crypto is legal in Austria. Austria has a clear regulatory framework for cryptocurrencies and has recognised them as a means of payment since 2019. The country has implemented anti-money laundering (AML) regulations that apply to cryptocurrency exchanges and service providers, and the Financial Market Authority (FMA) is the responsible regulatory body for overseeing compliance with these regulations. Overall, Austria has been proactive in embracing blockchain technology and cryptocurrencies, with several initiatives aimed at promoting innovation in this field.

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2. How is Crypto taxed in Austria?

‍

In Austria, cryptocurrencies are treated as assets and are subject to capital gains tax. Therefore, any profit from buying and selling cryptocurrencies is subject to taxation, just like any other investment.

It's also worth noting that any income received in cryptocurrency, such as through mining or airdrops, is subject to income tax. Additionally, if a business accepts cryptocurrency as payment, the transaction is subject to value-added tax (VAT) in the same way as any other transaction.

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3. Is any crypto tax-free in Austria?

‍

In Austria, there is no tax-free cryptocurrency. All gains from buying and selling cryptocurrencies are subject to taxation, just like any other investment. Even if you receive cryptocurrencies as a gift or through an airdrop, they are still subject to taxation as income.

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4. How to file crypto taxes using Kryptos?

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We’ve already discussed how to file your crypto taxes in the above sections of the guide offering a stepwise breakdown of the entire process. However, we agree that it is unreasonably complicated even for someone with a fair amount of prior knowledge. Although there’s an easy way to file your crypto taxes using a crypto tax software called Kryptos.

Where all you need to do is log in on the platform, add all your trading accounts, wallets, and DeFi accounts and sip coffee while Kryptos does all the heavy lifting for you. The platform can auto-fetch all your transactions from the tax year and generate a legally compliant tax report within a matter of minutes while also suggesting ways to lower your tax bill. It works like magic, all you need to do is try it once.

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All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position/stance, you should always consider seeking independent legal, financial, taxation or other advice from professionals. Kryptos is not liable for any loss caused by the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!

Whether you invest in tokens, stake them, mine them, or use them as a currency, the DGFiP (Direction Générale des Finances Publiques) would require some answers from you along with the taxes. France took a positive stance on crypto assets to transform the country into a European crypto hub, but owing to the inherent volatility of the unregulated market, the tax authorities had to come up with an intelligent tax structure to avoid its misuse.

If you are a French resident, you will have to pay taxes on your crypto investments and while the subject of crypto taxes is an intimidating one, we have curated an east-to-read and easier-to-digest crypto tax guide for you, so that when you’re done reading this guide, you can easily file crypto taxes yourself.

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Can the DGFiP Track Crypto?

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People often mistake the decentralised nature of blockchains and dependent cryptocurrencies for anonymity, which is not accurate. Your crypto transactions can be tracked using decentralised tools and your KYC details that you might’ve shared with your crypto exchange when you started using it.

France being a member EU state comes under the jurisdiction of regulatory guidelines and directives like the European Union's Sixth Anti-Money Laundering Directive (AMLD 6), which calls for stricter KYC regulations for companies offering crypto-related financial services in the region.

A new EU directive called Dac8 is expected to come into force later this year. It would give DGFiP the power to verify crypto ownership and access the accounts of crypto businesses to examine their digital assets.

So we suggest reporting all your transactions on your tax return and paying your crypto taxes on time because tax evasion can result in a penalty of 80% of the taxes owed, along with a maximum fine of €500,000 and a prison sentence of up to 5 years in France.

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How is Crypto Taxed in France?

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The legal definition of Bitcoin and other crypto assets came into the picture as late as May 9, 2019, under PACTE (Action Plan for Business Growth and Transformation law). The definition constitutes:

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“Any digital representation of a security which is not issued or guaranteed by a central bank or by a public authority, which is not necessarily attached to a currency having legal tender and which does not have the legal status of a currency, but which is accepted by natural or legal persons as a medium of exchange and which can be transferred, stored or exchanged electronically.”

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Crypto is taxed as an immovable property or asset in France and its disposal constitutes a capital gains event. The gains are subjected to capital gains tax and mining rewards that are subjected to BMC in France.

According to Art. 150 VH of the French General Tax Code, the taxation of crypto capital gains depends on whether the cryptocurrency was acquired from investments or other activities such as mining.

The amount of taxes you pay depends on how you’re viewed from a tax perspective. Investors are usually considered occasional traders and are required to pay the PFU (Prélèvement Forfaitaire Unique) at a flat tax rate of 30% which constitutes a 12.8% Income Tax plus a 17.2% social security contribution.

However, you can opt to waive the 12.8% income tax and choose a progressive tax under the new guidance.

Any income made by professional traders was considered commercial income (BIC (Bénéfices Industriels et Commerciaux) under the previous guidelines, however, things have changed owing to the new guidelines. Income made by professional traders is now viewed as a non-commercial income (Bénéfices non-Commerciaux) and is subjected to a non-commercial profits tax of up to 45%.

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Crypto Capital Gains

‍

Since the taxation of your gains depends heavily on how you’re viewed by the DGFiP, we will look at how the tax authority differentiates between the two and the tax implications for both.

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Professional Traders vs Occasional Traders

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The classification used to be on whether you engage in transactions frequently or not. If you were engaged in frequent transactions you were considered a professional trader attracting a progressive commercial profit tax varying between 0-45% and if you weren’t so active and engaged in just frequent transactions, you were considered an occasional trader and attracted a flat PFU tax of 30%.

However, under the new tax reform, the frequency or volume of your transactions has nothing to do with how you’re viewed from a tax perspective. If you buy and sell your crypto assets under your management, then you’ll automatically be considered an occasional trader regardless of the frequency or volume of your transactions.

A person executing sophisticated transactions using specialised tools in a professional setting is more likely to be categorised as a professional trader. Their gains will be taxed as non-commercial profits, the same as mining rewards.

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Capital Gains Tax Rate

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Since most investors will be taxed as occasional traders under the new guidelines. Most of your gains will be taxed at a flat 30% rate called PFU taxes. Here’s a breakdown of PFU rated for occasional traders:

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‍As previously mentioned, you can choose to waive off the income tax (12.8%) of your gains under the new guidelines and choose to be taxed under a progressive income tax framework instead. While it may not be a beneficial opt-in for most investors, it does stand to benefit some of the low-income investors who fall in the lower tax brackets.

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Example

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Let’s take the example of Jade who has been investing in crypto for the past 2 years. Below is a list of all transactions from the past two years:

2023/06/04 - Bought 1 BTC for €5,000 in Binance Wallet

2023/07/23- Exchanged 1 BTC for 7 ETH Tokens in Binance Wallet

2023/11/29- Exchanged 5 BTC for 20 LTC tokens in Binance Wallet

2024/ 02/14- Sold 1 BTC for €20,000 from Binance Wallet

2024/04/11- Sold 5 Eth for €5,000 from Binance Wallet

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Let’s convert these transactions into a tabular format for a better understanding of these transactions:

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The DGFiP mandates the use of the PCVT method for cost-basis calculations that rely on the formula given below:

Cost Basis (EUR)= Sale price – (total acquisition costs x [sale price/total portfolio value])

We will revisit this formula soon in the later sections. For now, let’s make the calculations and complete the table.

Right before Jade Sold 1 BTC for €20,000, Jade had 2 BTC, 7 ETH, and 20 LTC, let’s assume that their value at the time of sale was €50,000. The cost of acquisition can be fetched directly from the table and it’s €5,000, and the price of disposal is €20,000.

When you put these numbers in the formula, you end up with the following:

Cost Basis(EUR) = 5,000 * (20,000/50,000) = 2,000

Capital Gain(EUR) = 20,000 - 2,000 =  18,000

Similarly, we can calculate the cost basis and capital gain for the second sell transaction:

Cost Basis(EUR) = 3,000* (5,000/25,000) = 600

Capital Gain(EUR) = 5,000-600 = 4,400

So the modified table now looks like this:

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Now these gains will be subjected to either the BNC or BIC tax structure depending on whether you are viewed as an occasional trader or a professional one. Although most investors would fall into the category of occasional traders and hence will be taxed under the BIC regime.

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Capital Losses

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Crypto losses are a fairly simple proposition for investors in France. You can offset your capital losses to lower your tax bill. However, the DGFiP is quite strict when it comes to offsetting your losses against your gains as it only allows capital losses made in the same financial year as the gains to be used as a deductible, while the rules are different for other securities, whereas you’re allowed to carry forward your losses to the subsequent financial year.

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How to Calculate Crypto Gains and Losses?

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Calculating your gains and losses is the penultimate step to filing your crypto taxes. It is a fairly simple process, all you need to do is calculate your cost basis first. Your cost basis is simply the amount you paid to acquire a certain asset.

Let’s say you bought 5 Eth tokens for €2,000 each and you had to pay an additional €50 as gas fees to the exchange in the process. Your cost basis per token would then be €2,010 (Price of Each Token + Amortized Gas Fees).

Once you have your cost basis, calculating your gains or losses is a breeze. Just subtract your cost base from the price of disposal and the difference is your gains or loss.

If it’s a gain, it will be subjected to a flat 30% PFU tax, while a loss can be used to offset your gains and reduce your tax bill.

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Crypto Tax Breaks France

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Although avoiding crypto taxes entirely is not an option in France, you can legally reduce your tax liabilities.

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1. HODL Your Crypto

Holding your crypto isn’t a taxable event in France, you can hold your assets from a long-term perspective and pay no taxes on them while they appreciate in value. Although you will have to pay taxes upon conversion to fiat currency.

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2. Convert Your Assets to Stable Coins

Since your crypto transactions are only taxable when you convert them to fiat currency in France, you can simply swap your assets for stablecoins and not pay any tax on them. Stablecoins are as stable as fiat currency and eliminate volatility from your portfolio. It’s the perfect way to realise a capital gain and not pay tax on it.

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3. Crypto Loss Harvesting

Although losses aren’t convenient for an investor, they’re not always bad for you. You can use your losses as an offset against gains and reduce your tax liability. However, you can only use losses from the same year as an offset against the gains unlike those in the securities market.

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4. Trading Fees

Almost every exchange charges you a trading fee for buying/selling or trading crypto from their exchange, and since trading fees are a deductible expense, you can reduce the trading fee from your acquisition cost and lower your taxable gains.

Moreover, you can also use trading fees from interim crypto swaps to significantly reduce your investment acquisition cost.

This is good news for you if you have multiple transactions within a financial year and it can have a huge impact on your tax bill.

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Crypto Cost Basis Method France

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We used a rather simplistic example to explain to you how you can calculate your crypto gains or losses. In reality, crypto gain calculations are more complicated, because people own multiple assets of the same kind, acquired through different transactions.

Consider this, for instance, you buy 100 Sol tokens across three transactions, the split being 30 in one transaction, 30 in the second one, and 40 in the last at €10, €15, and €20 a token respectively. And then you decided to sell 50 Sol tokens for €25 each 6 months later.

How will you calculate the cost basis for this transaction?

In France, you need to use the PCVT (plus values de cessions d'actifs numériques) for all your cost basis calculations as proposed by the DGFiP. The PCVT method relies on a predetermined formula for calculating your cost base.

Capital Gain/Loss (EUR)= Sale price – (total acquisition costs x [sale price/total portfolio value])

Sale Price(EUR): The amount you receive upon disposal

Total Acquisition Cost(EUR): The price you paid to acquire the asset including extra fees

Total Portfolio Value(EUR): The total value of your portfolio inclusive of all assets

Let's say, you bought a BTC for €15,000. So your Total Acquisition Cost is €15,000.

And you sell it for €20,000. That’s your Sale price.

Your total portfolio value including the BTC token mentioned earlier is €40,000. That’s your Total Portfolio value.

Now all you need to do is insert these values into the formula and you’ll have your gain/loss for this transaction.

When you do that, you’ll get this:

Capital Gain/Loss(EUR) = {20,000 - (15,000 * (20,000 / 40,000)}

You can use a calculator for this, or you could just divide 20,000 by 40,000 which will give you a factor of 0.5, which when multiplied by 15,000 reduces it to 7,500. Now all that’s left is to subtract it from 20,000 which essentially leaves you with a capital gain of 12,500.

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Crypto Income Tax France

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If you’re an occasional trader and opt-in for the progressive tax regime under the PFU tax structure, you’ll be taxed according to the progressive income tax rates. The same rates apply if you’re considered a professional trader by DGFiP or if you’re seen to be making an income from crypto mining.

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Crypto Income Tax Rates

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The following rates shall apply to your crypto income:

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‍Note that for professional traders and miners being taxed under the BNC tax regime, there’s something called the micro-BNC tax regime for traders and miners who are making less than €77,700 in 2024.

The micro-BNC scheme essentially allows you to have a 34% tax-free allowance on your annual turnover. So you pay taxes on only 66% of your annual turnover contingent that you make less than €77,700. You can find out more about it here.

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How to Calculate Crypto Income

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Calculating your crypto income is a fairly simple task, if you’re running mining activities in a business setting, the turnover of your business is considered your income. Similarly, any income incurred in a professional setting is considered turnover and is taxed under the BNC regime as discussed earlier.

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Tax-Free Crypto Transactions

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Not all crypto transactions are taxed. Here’s a list of tax-free transactions in France:

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• Buying crypto with EUR
• Swapping one crypto asset for another
• Transferring crypto between wallets
• HODLing your crypto assets

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Taxed Crypto Transactions

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These transactions will attract tax liabilities in France:

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• Converting crypto to fiat
• Receiving mining rewards

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There are some common transactions like spending, staking, and DeFi transactions like liquidity mining. The only reason why you can’t find details about these transactions in this guide is that the DGFiP hasn’t released any guidelines on their taxation yet.

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Tax on Mining Crypto France

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Regardless of whether you mine tokens as a hobby or as a business, all mining rewards are considered non-commercial profits and are taxed up to 45% under the BNC tax regime.

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Tax on Staking Crypto

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Crypto staking is still a grey area when it comes to crypto taxation in France. The DGFiP is yet to release any guidelines on how such transactions are taxed. There’s a fair chance that staking rewards will be considered non-commercial income and will be taxed in the same way as mining rewards.

Yet many European offices argue why the acquisition cost of staking rewards isn’t €0 or equal to the fair market value of tokens upon receipt. We recommend seeking advice from an experienced tax accountant for transactions concerning crypto staking.

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‍Crypto Gifts and Donations Taxes

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Most European countries offer tax exemptions on Crypto Gifts and Donations, however, there are no clear guidelines regarding their taxation in France. More details will be added here as soon as the DGFiP releases new guidelines.

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Crypto Margin Trading, Futures and CFDs

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The DGFiP is yet to release any guidelines on the taxation of gains derived from margin/future trades and derivatives like CFDs. However, we will be looking out for any new guidelines regarding the same and will add relevant details here when it’s available.

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Crypto ICO Taxes

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ICOs represent ownership in newly incubated crypto projects and the nature of tokens received from ICOs is similar to those received as staking/mining rewards, and hence there’s a high chance that these transactions will follow a similar tax route.

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NFT Taxes France

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The DGFiP is yet to release any guidelines on the taxation of NFTs in France. We add all relevant details as soon as we get access to them.

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DAO Taxes

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Income from DAOs can be from various avenues like bounties, contribution rewards paid to contributors, and redistributed profits. The DGFiP is yet to release any guidelines on DAO taxation, we will surely be on the lookout for new guidelines and will update them here as soon as we get access to them.

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DeFi Crypto Taxes France

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The current guidelines from the DGFiP consider disposal to be the act of exchanging your cryptocurrency for traditional currency. Consequently, certain DeFi transactions could be interpreted as not subject to taxation, such as trading capital for liquidity pool tokens.

However, it’s impossible to be sure regarding their taxation without explicit guidance. We suggest talking to an experienced tax accountant if you’re deep into the DeFi territory.

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How are Airdrops and Forks Taxed in France

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The DGFiP is yet to release guidelines on the taxation of income from airdrops and forks. We will be adding it here as soon as new guidelines hit the public view.

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What Crypto Records Will the DGFiP Want?

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‍The DGFiP expects you to keep detailed records of your crypto transactions from the past 5 years just like all other European tax offices. Here’s a list of documents you might need when filing your crypto taxes:

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• A list of all crypto transactions with their dates
• The purpose of the transaction and the parties involved
• The market value of the asset (EUR) at the time of the transaction

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You can opt for a smarter way of record-keeping instead of maintaining these records in the form of a manual ledger. You can simply import all your transactions to Kryptos and let Kryptos maintain the ledger for you.

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When to Report Crypto Taxes in France?

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The tax year in France runs from January 1st to December 31st and your tax deadline depends on what department (region) you reside in. Here are some key dates for all the regions in France:

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How to Report Crypto Taxes in France

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There are two ways you can report your crypto taxes to DGFiP:

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1. Online using your FranceConnect Account
2. Offline using paper forms

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However, the tax authorities have mandated the use of the online portal for all, unless there’s some special circumstance and you can’t access the online portal. You can use the physical forms in that case.

When it comes to filing your crypto taxes you need to complete multiple forms depending on the nature of your transactions:

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1. Formulaire 2042: This is the primary tax document mandatory for anyone filing their tax return with DGFiP. You can either file this individually or jointly with a spouse.

2. Formulaire 2086: This is a peripheral form attached to Formulaire 2042. Any gains/losses you’ve incurred while converting your crypto to fiat should be mentioned in this form.

3. Formulaire 2042C: You’ll have to list all transactions that are considered to be BNC income (i.e. income from mining, professional trading)

4. Formulaire 3916-bis: For transactions in crypto accounts set up outside France

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Note that Form 2086 only allows 20 disposals, so if you’ve made more than 20 disposals in a financial year, do seek help from an experienced tax accountant.

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How to File Crypto Taxes Using Kryptos?

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Now that you’re aware of how your crypto transactions are taxed and what forms you need to fill out to complete your tax report, here’s a step-wise breakdown of how Kryptos can make this task easier for you:

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1. Visit Kryptos and sign up using your email or Google/Apple Account
2. Choose your country, currency, time zone, and accounting method
3. Import all your transactions from wallets and crypto exchanges
4. Select your desired report and click the "Generate Report" option on the left side of your screen. Let Kryptos handle all your accounting needs seamlessly.
5. Once your Tax report is ready, you can download it in PDF format.

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If you still need clarification regarding the integrations or generating your tax reports, you refer to our video guide here.

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How to avoid crypto taxes in France?

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You’re legally required to pay your crypto taxes in France, and not doing so can lead to a lot of trouble. However, you can reduce your tax liabilities by using the following strategies:

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1. Track your losses and use tax loss harvesting to reduce your tax bill
2. Convert your assets into stablecoins instead of fiat
3. Take advantage of lower tax bands

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We’ve discussed the above-mentioned strategies in detail in the section titled “Crypto Tax Breaks”.

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FAQs

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1. Is Crypto Legal in France?

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Although it is legal to own and trade crypto in France. The government doesn’t consider crypto to be legal tender and instead classifies it as an immovable property or asset. In 2014, France introduced a legal framework for digital currencies, making it one of the first countries to do so. Cryptocurrency exchanges and service providers are required to comply with anti-money laundering (AML) and know-your-customer (KYC) regulations. Moreover, France has taken steps to promote blockchain technology and innovation through various initiatives and projects.

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2. What happens if you don’t pay taxes on Crypto?

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In France, tax evasion can result in a penalty of 80% of the taxes owed, along with a maximum fine of €500,000 and a prison sentence of up to 5 years.

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3. How is Crypto Taxed in France?

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In France, cryptocurrency is taxed as an immovable property or asset. When you sell or dispose of crypto assets, it triggers a capital gains event. Capital gains tax applies to any profits resulting from the sale, except for mining rewards, which are subject to a separate tax called BMC.

The taxation of crypto capital gains is determined based on how the cryptocurrency was acquired. If it was obtained through investments or other activities like mining, different tax rules apply.

For investors considered occasional traders, are required to pay the PFU (Prélèvement Forfaitaire Unique) at a flat tax rate of 30%. This includes a 12.8% income tax and a 17.2% social security contribution. However, under the new guidance, there is an option to choose a progressive tax rate instead of the 12.8% income tax.

Professional traders' income was previously classified as commercial income (BIC) but now falls under the category of non-commercial income (Bénéfices non-Commerciaux) as per the new guidelines. Such income is subject to non-commercial profits tax. The specific tax amount depends on your tax situation.

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4. How can Kryptos help you in filing your crypto taxes?

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We agree that filing your crypto taxes is an unreasonably complicated task, even for someone with a fair amount of prior knowledge. However, there’s an easy way to file your crypto taxes using a crypto tax software called Kryptos.

All you need to do is log in on the platform, add all your trading accounts, wallets, and DeFi accounts and sip coffee while Kryptos does all the heavy lifting. The platform can auto-fetch all your transactions from the tax year and generate a legally compliant tax report within minutes while suggesting ways to lower your tax bill. It works like magic. All you need to do is try it once.

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5. How to Avoid Crypto Taxes in France?

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Although avoiding taxes entirely isn’t an option in France, you can use the below-mentioned strategies to reduce your crypto taxes legally:

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1. Keeping track of your losses and using tax loss harvesting
2. Converting your assets into stablecoins instead of fiat currency
3. Using the lower tax brackets to your advantage
4. HODLing crypto for the long term

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All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position/stance, you should always consider seeking independent legal, financial, taxation or other advice from professionals. Kryptos is not liable for any loss caused by the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!

Thailand has long been hailed as a crypto-friendly nation with lenient tax regulations for resident investors and traders. According to a report published by Statista in 2022, 12% of the Thai population owns or uses crypto, which is the highest in the world when expressed as a proportion of the population.

However, Thai authorities started tightening their grip on crypto investors by the end of 2022, when the Revenue Department released a 32-page detailed guideline outlining the nuances of crypto taxation in Thailand. This comes at a time when Thailand’s global allies are collectively pushing for crypto regulation and investor protection, in the wake of the recent black swan events.

The guidelines offered by the authorities cover everything from personal income taxes and capital gains to mining taxes. This article offers a comprehensive summary of these guidelines to help Thai crypto enthusiasts understand the tax implications of their involvement with the asset.

Is Crypto Legal in Thailand?

Although crypto is not a legal tender in Thailand, investing, holding, mining, or trading cryptocurrencies in Thailand are considered legal activities. Before 2022 resident traders and investors paid zero taxes and the government recognised the potential of crypto in developing the financial infrastructure of the nation.

Thailand is a crypto-friendly nation and although the Thai government has implemented some regulations to oversee cryptocurrency activities, and the Securities and Exchange Commission (SEC) of Thailand played a role in supervising digital asset businesses, the tax rates are fairly reasonable when compared to other countries like Portugal, where taxes on crypto climb as high as 53%.

Can Authorities Track Crypto?

The simple answer would be ‘Yes’. Tax authorities in many jurisdictions, including Thailand, are increasingly focusing on regulating crypto transactions to ensure compliance with tax regulations.

In Thailand, the Revenue Department has taken steps to regulate crypto transactions. They have mandated crypto exchanges to register with the authorities and adhere to certain reporting obligations.

If investors fail to report their crypto transactions accurately on their tax returns, it is possible for tax authorities to detect discrepancies through various means:

• While cryptocurrencies offer a degree of privacy, transactions are recorded on public blockchains. Authorities may use blockchain analysis tools to trace transactions and identify individuals involved.

• Cryptocurrency exchanges often implement Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures. If an individual exchanges cryptocurrency for fiat currency on a regulated platform, authorities may have access to their identity and transaction history.

• Tax authorities may cross-reference information from various sources, such as bank records, exchange data, and other financial records, to identify discrepancies in reported income.

• Tax authorities can conduct audits or investigations if they suspect non-compliance. This may involve reviewing financial records, conducting interviews, and seeking additional information.

Therefore, if you have plans to hide your crypto transactions from authorities by not reporting them, you might end up in serious trouble.

How is Crypto Taxed in Thailand?

In Thailand, the taxation of crypto, collectively referred to as digital assets, is overseen by the Thai Revenue Department, offering a clear framework for crypto taxation. Authorities define digital assets as “electronic data or instruments with intrinsic value”, and profits derived from these assets are subject to progressive Personal Income Tax (PIT) rates, with the maximum rate reaching 35%.

The following Income tax rates apply based on total income in Thailand:

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The tax structure is organised into five categories of transactions: trading, mining, remuneration, gifts, and return on investment. Individual taxpayers are obligated to report their digital asset income in their annual returns (PND90, PND91) and can utilise withheld tax (WHT) as a credit against their PIT obligations.

Traders/Investors in Thailand can calculate their cost basis using the First In First Out (FIFO) or Moving Average Cost (MAC) accounting methods. Mining, on the other hand, necessitates the use of the FIFO method, with associated costs, such as bills and wages, considered deductible expenses.

When it comes to the sale, transfer, or exchange of cryptocurrencies, any value exceeding the cost of investment is deemed assessable income. The cost of cryptocurrencies can be calculated using standard accounting methods like FIFO or moving average cost, with valuations based on the acquisition time or average price at acquisition.

Losses incurred from one type of cryptocurrency can be offset against profits from others, but this is applicable only for transactions conducted through digital asset operators under the supervision of the Securities and Exchange Commission (SEC). The cost value of cryptocurrencies held at the end of the year is not considered assessable income and can be carried forward to the next tax year.

Furthermore, withholding tax deducted during the tax year can be used as a tax credit when filing personal income tax returns, offering a mechanism for individuals to offset their tax liabilities. In the realm of crypto mining, receipts from mining activities are not considered assessable income at the time of receipt. However, the subsequent sale, payment, transfer, or exchange of mined cryptocurrencies is taxable.

Note that the Royal Thai Government Gazette has introduced an exemption for the transfer of digital assets traded on SEC-approved platforms and digital currencies launched by the Bank of Thailand. This VAT exemption is in effect from April 1, 2022.

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Future of Crypto Taxation in Thailand

The future of crypto taxation in Thailand appears to be heading towards a more regulated and structured environment, evident from recent guidelines and tightening measures by authorities. The emphasis on tracking crypto transactions, mandatory registration for exchanges, and a comprehensive tax structure indicate a commitment to transparency and compliance. The temporary VAT exemption for specific digital asset transactions suggests a willingness to explore targeted incentives. Thailand's historical crypto-friendly stance aligns with the global trend of formalising tax structures for digital assets, with potential future refinements to address evolving challenges and ensure the responsible use of cryptocurrencies.

Estonia is one of few countries that has released clear guidelines on the categorisation of crypto and its taxation despite not having a dedicated tax regime. Back in 2021, Crypto adoption in Estonia was at 2.4% and this number has only risen in the past few years. This is one of the reasons why Estonian authorities are constantly searching for innovative ways to manage crypto taxes.

The impetus for compliance with the evolving tax structure lies with investors, which is not as easy as it sounds. That’s why we created this detailed tax guide on crypto taxation that addresses key pointers like “How is Crypto Taxed in Estonia?” “What are the tax rates?” “How to file crypto taxes in Estonia?” “How are De-Fi and NFT transactions taxed?” “How to calculate crypto gains and losses?” and more.

This guide will be updated regularly to accommodate any new rules and guidelines. It would be prudent to keep revisiting this guide just to stay updated on new trends and guidelines.

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How is Crypto Taxed in Estonia?

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Crypto is taxed in Estonia (for regular taxpayers like us) based on income from various cryptocurrency activities. Taxable transactions include trading, converting cryptocurrency into fiat or other cryptocurrencies, and using cryptocurrency to pay for goods or services. Income from cryptocurrency mining is considered business income. Moreover, taxable income received in cryptocurrency, like rent, interest, and business income, is subject to income tax.

The Court of Justice of the European Union ruled that exchanging virtual currency for traditional currency and vice versa is considered the provision of services for consideration and is exempt from VAT. However, transactions involving non-traditional currencies are treated as financial transactions if parties accept them as alternatives to legal tender.

Income can be generated through price changes during sales or exchanges, paying with crypto, mining, and computer data rental. Non-taxable activities include donating, buying a cryptocurrency with fiat, transferring between wallets, and giving cryptocurrency as a gift.

Gains from cryptocurrency transfers, including exchanges, are subject to income tax and are taxed at a flat rate of 20%. The gain is calculated based on the difference between selling and purchase prices or the price of the received property and the purchase price of the cryptocurrency. Losses from cryptocurrency exchange cannot be deducted for tax purposes.

Cryptocurrency is considered property, and taxable income should be declared in the income tax return. Each transfer transaction, including exchange, is treated as a separate object of taxation.

Cryptocurrency exchanges with traditional currency must be converted to euros at the market rate on the date of receipt.

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Can the MTA Track Crypto?

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Estonia being an EU member state has access to KYC details and transaction records from all exchanges and companies offering crypto-related services in the region, all thanks to regulations like AMLD-6 and DAC-8. These regulations ensure better compliance and reporting on the part of crypto companies for investor protection and to subdue money laundering efforts in the region.

Recent efforts to boost transparency in the crypto space have been fruitful as Estonia has signed up to the international Crypto Asset Reporting Framework allowing for exchange with tax related information between tax jurisdictions to prevent cross border tax evasion and money laundering.

Moreover, if you’re using an account from a regional bank, funds used to acquire crypto assets and funds received from their disposal, are all accessible from your bank statement. This information can be correlated from public ledgers to identify any discrepancies in tax reports. So it’s safe to say that the MTA is aware of all your crypto transactions and can easily identify if you’re underreporting your gains. So make sure you report all your transactions to the MTA and pay your taxes judiciously to avoid getting in trouble with the tax authority.

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Capital Gains Tax Estonia

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There’s no dedicated capital gains tax in Estonia and all transactions that result in a gain are taxed as regular income. When you engage in activities like trading cryptocurrency, converting it into regular fiat currency, or exchanging one cryptocurrency for another, the gains you incur are taxable.

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The following transactions constitute a capital gain:

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• If you buy crypto and later sell it at a higher price, the difference between the selling price and the purchase price is considered a gain, and you'll have to pay income tax on that gain.

• When you convert your cryptocurrency into regular fiat currency (like euros) and make a profit on that exchange, the profit amount is treated as a gain and becomes taxable.

• If you exchange one cryptocurrency for another and end up with more value in the new cryptocurrency, the difference in value is seen as a gain and is subject to income tax.

• In Estonia, if you mine cryptocurrency and make money from it, that income is considered business income and is taxable as well.

Moreover, it's not just the act of earning crypto that's taxable; even income received in cryptocurrency, such as rent, interest, and business income, is subject to income tax.

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Capital Gain Tax Rate

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As mentioned earlier, there is no dedicated capital gains tax in Estonia.

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How to Calculate Crypto Gains and Losses?

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Calculating your crypto gains and losses is a pretty straightforward process. You can use the following formula for that:

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For those who are unaware of what cost basis means, it is simply the price you paid to acquire the asset.

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Consider the following examples:

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Example 1

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Let’s say you buy 2 BTC for €15,000 each, and you decide to sell 1 BTC 6 months later for €20,000. Since the token has been appreciated since the acquisition, the transaction constitutes a gain. You can calculate the gain by reducing the cost basis from the disposal amount i.e., Gain = €20,000 - €15,000 = €5,000

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Example 2

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A person buys 5 Ethereum for 1,000 euros each, spending 5,000 euros. Later, they exchange 3 Ethereum for 0.3 Bitcoin worth €4,500 making the value of each ETH token €1,500. The value of each ETH token has gone up by €500, so the transaction constitutes a gain of €1,500 (for 3 ETH tokens).

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Crypto Losses

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In Estonia, losses incurred from cryptocurrency transactions are treated differently from gains. Unlike gains, losses from crypto exchanges cannot be used to reduce your tax liability.

If you make a loss on a cryptocurrency transaction, you won't be able to offset that loss against your taxable income. This means that you cannot deduct your crypto losses from your overall income to lower the amount of income tax you owe.

For example, if you bought 1 Bitcoin for €18,000 and later sold it for €12,000, resulting in a loss of €6,000, you won't be able to use that €6,000 loss to reduce the income tax you owe on your other sources of income.

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Lost or Stolen Crypto

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There are no current guidelines on how lost or stolen crypto assets are viewed from a tax perspective. However, the MTA will likely make a case-by-case analysis of individual claims and then decide how such transactions will be treated. So we suggest contacting the MTA directly for more information on the subject.

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Crypto Tax Breaks

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Since losses are not tax deductible in Estonia, taxpayers cannot use tax-loss harvesting to lower their tax bill. However, the Estonian government does offer a basic exemption for all taxpayers. In 2024, the basic exemption limit for Estonian taxpayers remains €654 per month, which totals €7,848 per year for individuals earning up to €14,400 annually

For those who are of pensionable age or attain it, the basic exemption rises discreetly to €704 per month, resulting in €8,448 per year.

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Crypto Cost Basis Method Estonia

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The examples we have used so far to explain capital gain calculations are fairly simplistic and do not represent real-world transactions. An investor buys multiple assets of the same kind at different prices and that makes capital gain calculations a bit complicated because how does one decide which acquisition price to use as the  cost basis?

That’s exactly why one must use a specialised accounting method for cost-basis calculations to avoid discrepancies. The MTA allows the use of FIFO and Weighted Average Accounting methods for cost-basis calculation in Estonia. Let’s look at how both of them work.

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1. FIFO

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The FIFO or First-In-First-Out accounting method states that the acquisition price of the first asset you buy is to be used as the cost basis for the latest disposal. In simpler terms, the first asset you buy is the first one you sell.

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2. Weighted Average Method

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The weighted average method states that the cost basis for disposal is equal to the average acquisition price of all assets in inventory at the time of disposal.

These accounting methods can be better understood using an example.

Consider the following ledger of transactions:

13/01/24 - Mark buys 1 ETH for  €1,400

26/03/24 - Mark buys 1 ETH for  €1,200

18/05/24 - Mark buys 1 ETH for  €1,800

17/07/24 - Mark sells 1 ETH for  €2,200

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We will use both accounting methods to calculate the gain on the disposal to understand how they work and the effect they have on your gains.

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1. Gain calculations using FIFO

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If we use FIFO, then the cost basis would be equal to the acquisition price of the ETH tokens acquired first.

Cost Basis =  €1,400

Disposal Amount =  €2.200

Using the formula:

Capital Gain = Disposal Amount - Cost Basis =  €2,200 -  €1,400 =  €800

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2. Gain Calculations using the Weighted Average Method

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According to the weighted average method, the cost basis is simply the average of the acquisition price of all assets in inventory.

Cost Basis = (€1,400 + €1,200 + €1,800)/3 = €1,467

Disposal Amount = €2,200

Using the formula = Disposal Amount - Cost Basis = €2,200 - €1,467 = €733

Notice how your gains are lower when you use the weighted average method instead of FIFO for capital gains calculations.

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Crypto Income Tax Estonia

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According to the Income Tax Act, cryptocurrencies are categorised as property. Gains from cryptocurrency transfers, including exchanges, are subject to income tax under subsections 15(1) and 37(1) of the Act.

Private individuals who receive income from trading, buying, selling, or exchanging cryptocurrency must declare this income as gains from the transfer of other property in their income tax return (tables 6.3 or 8.3).

The gain is calculated as the difference between the selling price and the purchase price, or in the case of an exchange, between the value of the received property and the purchase price of the cryptocurrency.

Only transactions that generate income need to be declared, and each transfer transaction, including exchanges, is treated as a separate object of taxation.

Losses incurred from exchanging cryptocurrency cannot be taken into account for taxation purposes unless the exchange involves securities under § 39 of the Income Tax Act. Such losses cannot be used as a deductible cost because crypto is not considered a security.

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Income Tax Rate

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Unlike its neighbours, Estonia doesn’t have a progressive income tax rate.

Any gains incurred from crypto transactions are taxed at a flat rate of 20% regardless of the source.

Income tax on all transactions is expected to increase from 20% to 22% from January 1 2025.

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Taxed Crypto Transactions

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The following transactions are taxed in Estonia:

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• Selling crypto for Fiat
• Exchanging one crypto for another
• Buying a product or service with crypto
• Mining and staking crypto
• Earning crypto as an income

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Tax-Free Crypto Transactions

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The following transactions do not attract tax liabilities in Estonia:

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• Donating crypto
• Buying cryptocurrency for a regular currency (euro, US dollar etc.)
• Transferring cryptocurrencies between your electronic wallets
• Giving cryptocurrency as a gift

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Tax in Mining Crypto

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In Estonia, crypto mining is considered a business activity and is taxed accordingly. Mined cryptocurrency is subject to taxation upon transfer, which includes converting it into regular currency, exchanging it for another cryptocurrency, or using it for purchases of goods or services. The income derived from mining must be declared in the income tax return Form E.

If an individual privately engages in cryptocurrency mining or data processing, income tax is not withheld, and they must declare this income as business income. However, private individuals cannot deduct expenses, such as equipment and electricity costs, incurred for mining.

Individuals involved in permanent cryptocurrency mining must register as a sole proprietor or a legal entity (company) in the Business register. Registered businesses can declare business-related expenses and deduct them from their business income. Income tax, social tax, and a contribution to a mandatory funded pension are levied based on the net income from the business, following the income tax return.

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‍

Tax on Staking Crypto

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In Estonia, crypto staking is treated as lending cryptocurrency. When a natural person lends cryptocurrency for staking, it is not considered a taxable event. However, if the person earns interest income from the lending of cryptocurrency through staking, they must declare the interest received in Part II of Table 5.1 or Table 8.1 of their income tax return. The interest income should be reported in the income tax return corresponding to the year in which the interest was received.

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How are Airdrops and Forks taxed in Estonia?

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There is no current guidance on how airdrops and forks are taxed in Estonia. However, tokens received through airdrops and hard forks will likely be taxed as income. Soft forks are non-taxable in most jurisdictions because no new tokens are created and redistributed among the chain participants.

Note that this is a speculation, and the MTA might hold a different view. Therefore, it would be prudent to consult a tax professional to understand the tax implications of such transactions.

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Crypto Gifts and Donation Taxes

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The taxation of gifts and donations is governed by several distinct sections of the Income Tax Act and the tax implications are different for a legal person and a natural person.

A legal person is someone in public law, political parties, non-profit associations, foundations, etc. Regular investors are usually referred to as natural persons.

If we consider crypto donations to be the same as fiat donations, we can infer details about how such transactions are taxed. Crypto gifts made by a natural person to another natural person or a registered entity are tax-free.

In Estonia, donations made by private individuals to listed non-profit associations and foundations are eligible for tax deductions up to €1200, which includes interest on housing loans and training expenses. Recipients must submit a "Declaration of gifts and donations received" (Form INF 4) to the Tax and Customs Board, and this information is pre-filled in donors' income tax returns. Donations made by calling or messaging require donors to provide their details and the donated amount to the NGO in January, along with a phone bill as proof. Donors can review and amend the pre-filled information in their income tax returns if needed. Donating income tax refunds to eligible associations is possible. However, tax incentives do not apply when donating directly to certain Ukrainian entities. Overall, donors can support non-profits and benefit from tax deductions through this system.

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Crypto Margin Trades, Futures, and CFDs

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The MTA views margin and leverage trades to be the same as regular trades. Any gains incurred from margin or leverage trades are taxed as income and subjected to a flat 20% income tax.

‍

Crypto ICO Taxes

‍

ICOs are special events that allow investors to own project native tokens from unreleased projects in exchange for mainstream tokens like BTC and ETH. They are similar to IPOs in traditional securities markets.

Although there is no clear guidance on how tokens received through ICOs are taxed, these transactions are likely viewed as crypto-to-crypto trades and any gains incurred from such transactions will be taxed as income.

We do suggest seeking guidance from experienced tax professionals to better understand how such transactions are taxed.

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NFT Taxes Estonia

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In Estonia, the taxation of NFTs varies based on the transaction's content from the perspectives of both the NFT creator and purchaser. If the NFT creator receives a resale fee, it is considered a royalty and must be declared as a licence fee in the income tax return.

For natural persons who buy and sell NFTs to earn income, the profits obtained from these transactions are subject to taxation. All profitable NFT transfers must be declared in Table 6.3 or 8.3 of the income tax return.

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DAO Taxes

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DAOs are member-owned communities with a shared vision. All the decisions in a DAO are made by the members in the absence of central leadership. DAOs are new-age institutions that aim to democratise decision-making and allow people to have a say in decisions that directly affect them. DAOs are often called the soul of Web3 and enable members to earn rewards in multiple ways. DAO contributors are rewarded for their contributions to the organization, similar to how centralized organizations pay salaries to their employees. They also pay out bounties for one-time projects and redistribute any profits generated through operations.

The MTA is yet to release specific guidelines on how income from DAOs is to be taxed. Compensation for work received in crypto is usually non-taxable in Estonia because the taxation is accounted for by the employer. However, this is not the case with DAOs since they’re autonomous organisations with no specific guidelines or structure for taxation. Therefore, it would be prudent to consult a tax professional to better understand how income from DAOs is taxed.

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DeFi Crypto Taxes Estonia

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In Estonia, crypto lending is generally not taxable for the lender. When a natural person lends cryptocurrency to another individual or a company (or a DeFi protocol), the act of lending itself is not considered a taxable event. However, if the lender receives interest on the loan, whether, in the form of cryptocurrency or any other form, the interest income is subject to income tax.

Interest income must be declared in the income tax return corresponding to the year of receipt. It's important to note that the taxation of crypto lending on decentralised platforms follows general tax principles, and the specific nature of the transactions on these platforms should be taken into account. Overall, while the act of lending crypto is not taxed, interest income from crypto lending is subject to income tax and should be declared accordingly.

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When to Report Crypto Taxes in Estonia

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In Estonia, residents are required to submit their tax returns by 30th April of the following year. Electronic filing of tax returns is accessible from 15th February.

Self-employed individuals are required to make advance tax payments. The deadlines for advance payments of social security contributions are as follows: 15th March (for Quarter 1), 15th June (for Quarter 2), 15th September (for Quarter 3), and 15th December (for Quarter 4)

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How to File Crypto Taxes in Estonia

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There are three ways you can file your taxes in Estonia:

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1. Using the e-MTA portal to file your taxes electronically. However, you will need a government-authorised ID card, a Mobile-ID, a smart ID, or an e-ID of an EU country
2. By sending a post to the Tax and Customs Board’s Service Bureau
3. Using paper forms

Here’s a video tutorial on how you can navigate the e-MTA dashboard once you have signed into the portal.

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When reporting gains from cryptocurrency transactions on your tax return, use either table 6.3 or 8.3, titled "Transfer of other property."

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• If the platform through which you made crypto transactions is registered in Estonia, indicate the transactions in Table 6.3.
• If the platform is registered abroad, indicate the transactions in Table 8.3.
• In the table, select "cryptocurrency" as the type of property.
• Enter the acquisition cost and expenses related to the transfer and the sales price/market price.
• The acquisition cost is the value of the purchased cryptocurrency in euros at the time of purchase.
• Sales price/market price is the value of cryptocurrency in euros at the time of sale or exchange.

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What Records will the MTA want?

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You should maintain the following records to have a seamless tax filing experience:

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1. A detailed record of all transactions made in a tax year (with date and time)
2. A detailed record of the acquisition price for every token
3. A list of all disposals made within a tax year
4. The fair market value of tokens on receipt
5. Details of the type of asset bought, sold, exchanged, or traded

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How to File Crypto Taxes Using Kryptos?

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Now that you’re aware of how your crypto transactions are taxed and what forms you need to fill out to complete your tax report, here’s a step-wise breakdown of how Kryptos can make this task easier for you:

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1. Visit Kryptos and sign up using your email or Google/Apple Account
2. Choose your country, currency, time zone, and accounting method
3. Import all your transactions from wallets and crypto exchanges
4. Choose your preferred report and click on generate report option on the left side of your screen and let Kryptos do all the accounting.
5. Once your Tax report is ready, you can download it in PDF format.

If you need clarification regarding the integrations or generating your tax reports, you refer to our video guide here.

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How to Avoid Crypto Taxes in Estonia

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Unfortunately, there are not a lot of ways you can avoid paying crypto taxes in Estonia since crypto losses aren’t tax deductible. However, there are exemptions and other strategies you can employ to lower your tax bill.

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1. General Income Tax Allowance: In 2024, the basic exemption ranges from 654 euros per month to 7,848 euros per year based on income. For those of pensionable age, it's a fixed 704 euros per month or 8,448 euros per year.

2. Gifting Crypto: Gifting crypto is tax-free in Estonia‍
3. Donating Crypto: In Estonia, donations made by private individuals to listed non-profit associations and foundations are eligible for tax deductions up to €1200

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FAQs

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1. Is Crypto legal in Estonia?

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This question is better phrased as “Are crypto investments legal in Estonia?” because just like most other countries crypto isn’t considered a legal tender, however, that doesn’t imply that investments in crypto assets are illegal as such. The government has specific regulations and guidelines for taxing crypto-related activities, such as trading, mining, staking, and lending. The Estonian Tax and Customs Board treats cryptocurrency as property, and gains from crypto transactions are subject to income tax. Additionally, crypto donations, crypto lending, and crypto staking are all addressed in the Estonian tax system.

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2. Are cryptocurrency transactions visible in the investment account statement?

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An investment account with a European bank displays all transactions, including contributions, withdrawals, purchases, and sales of financial assets. If you buy cryptocurrencies through an investment account, the transactions will be visible in the account statement. However, note that cryptocurrency is not considered a financial asset under the Income Tax Act, and gains cannot be tax-deferred. When reporting crypto transactions, purchases are declared as withdrawals in Table 6.5, and sales are declared as contributions in the income tax return. Moreover, gains from crypto transactions should be declared in Table 6.3 or 8.3.

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3. Do you pay tax on crypto in Estonia?

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Crypto in Estonia is taxed based on income from various cryptocurrency activities, including trading, converting to fiat or other cryptos, and using it for goods/services. Mining income is considered business income and taxable income in crypto is subject to income tax.

The Court of Justice ruled that crypto-to-fiat exchanges are exempt from VAT, while non-traditional currency transactions are treated as financial if accepted as legal tender alternatives. Income can come from price changes, mining, and more, while non-taxable activities include donating and transferring between wallets. Gains from crypto transfers are subject to a 20% income tax, calculated based on price differences. Cryptocurrency is considered property, and each transfer is a separate taxable object.

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4. How can Kryptos simplify crypto taxes for you?

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We’ve already discussed how to file your crypto taxes in the above sections of the guide offering a stepwise breakdown of the entire process. However, we agree that it is unreasonably complicated even for someone with a fair amount of prior knowledge. However, there’s an easy way to file your crypto taxes using a crypto tax software called Kryptos.

Where all you need to do is log in on the platform, add all your trading accounts, wallets, and DeFi accounts and sip coffee while Kryptos does all the heavy lifting for you. The platform can auto-fetch all your transactions from the tax year and generate a legally compliant tax report within a matter of minutes while also suggesting ways to lower your tax bill. It works like magic, all you need to do is try it once.

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All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position / stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!

Poland has long been one of the most prominent destinations for crypto-based startups, owing to its lenient crypto regulations and comparatively softer stance on crypto as an industry. Crypto investors have enjoyed a similar environment as well. According to a report by Triple A, more than 900,000 people owned crypto in Poland. Moreover, Poland was the first country ever to integrate blockchain for the provisioning of emergency services. In November 2020, Olsztyn completed a successful trial run of Smart Key, a bridging technology that connects blockchain with physical assets, to aid in police, fire and ambulance services.

Global crypto adoption has soared in the past 3 years, and Poland has followed suit. That is part of the reason why Polish authorities have been actively publishing new guidelines regarding crypto taxation. They have also released a new tax form called PIT-38 to help Polish taxpayers report crypto transactions conveniently. Although there are guidelines around crypto taxation in Poland, navigating those guidelines and interpreting them in the context of specific crypto investments is tedious. That’s why we created this comprehensive tax guide covering every aspect of crypto taxation.

Note that this guide will be updated regularly to accommodate any new guidelines. Therefore, we suggest you keep revisiting this guide regularly to keep up with the tax trends.

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How is Crypto Taxed in Poland?

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In Poland, the taxation of cryptocurrencies follows specific guidelines based on the country's tax laws. According to the Personal Income Tax Act, virtual currency is defined as a digital representation of value that can be exchanged for legal tender and accepted as a means of exchange. However, it's important to note that virtual currency excludes certain categories, such as legal tender issued by national banks, international units of accounts, electronic money, financial instruments, bills of exchange, and cheques.

When it comes to taxation, revenue generated from trading cryptocurrencies is considered revenue from monetary capital. Disposing of virtual currency in exchange for payment involves different scenarios:

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• Exchange of virtual currency for legal tender (e.g., selling cryptocurrency for fiat)

• Exchange of virtual currency for goods, services, or property rights

• Settlement of liabilities with virtual currency

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It's worth noting that not only the conversion of virtual currency into fiat currency triggers a tax liability but also exchanging it for goods, services, or property. However, exchanging one cryptocurrency for another or converting it into stablecoins does not result in a tax liability.

The taxation rate for cryptocurrencies in Poland is 19%. There is no specific tax threshold in this case, and all income derived from cryptocurrencies, regardless of the amount, is subject to the 19% tax rate. It's essential for investors to accurately report their income from virtual currencies and fulfil their tax obligations accordingly.

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Can the Tax Administration Chamber Track Crypto

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The answer is yes. Poland is a member of the EU and hence comes under provisions like DAC-8 that are meant for better compliance and investor protection in the space. DAC-8 mandates all crypto companies provisioning financial services in the region to collect and share investor data with all EU member states. Couple that with the AMLD-6 directive, which calls for stricter KYC norms for crypto service providers, and it's safe to assume that the TAC has access to your transaction details and can co-relate this information with data on public ledgers to identify any discrepancies in tax reports.

Therefore, we suggest reporting all your crypto transactions and paying your taxes judiciously to avoid legal complications.

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Capital Gains Tax

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In Poland, certain cryptocurrencies do qualify under the definition of securities and their disposal results in gain from monetary capital. However, this does not make much of a difference when it comes to their taxation. Because Poland does not have a dedicated capital gains tax, all crypto transactions are taxed at a flat rate of 19%.

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Capital Gains Tax Rate

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As mentioned earlier, there is no dedicated capital gains tax rate in Poland, and all crypto transactions are taxed at a flat rate of 19%.

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How to Calculate Capital Gains

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Calculating your income from the sale of crypto is fairly simple in Poland. You can use the formulae below to calculate -

Income from sale of crypto = Aggregate revenue from sale in the year - Tax deductible costs in the year

In Poland, crypto taxes are levied on the conversion of crypto into fiat or if you've spent your crypto in exchange for any goods or services. Accordingly, the method is straightforward, as explained below:

• Each buy generates "tax deductible costs", which are aggregated on an annual basis.
• Each sale generates "tax revenues", which are aggregated on an annual basis.

At the year's end, if tax deductible costs are more than tax revenues, then the loss will be reported and carried forward in the next year.

Here’s an example:

Let’s say Antony in his Binance Wallet bought 1 BTC and 1 ETH for 80,000 PLN  in January 2024 and decided to sell both these tokens later that year for 1,10,000 PLN.

Disposal Amount = 1,10,000 PLN

Cost Basis = 80,000 PLN

Let’s use the formula:

Capital Gains = (1,10,000 - 80,000) PLN = 30,000 PLN

A flat tax rate of 19% will be levied on the 30,000 PLN gain.

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Crypto Losses

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Crypto losses are tax deductible in Poland. If you’ve made losses that far exceed your gains, you can report them in the PIT-8 tax form, and any assets that you’ve bought and not sold in a financial year are to be reported as expenses to be accounted for in your tax return. Now, as long as you have losses in the current financial year and expenses to be accounted for in the subsequent financial year, you can carry your losses forward until the gains made from the disposal of crypto assets exceed these losses.

No provision states that capital losses aren’t tax deductible, therefore, one should report all losses to tax authorities and avail tax benefits.

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Lost Or Stolen Crypto

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There are no established provisions or guidelines that determine the tax treatment of lost or stolen crypto. Therefore, it is likely that the Resolution hinges on individual cases and subsequent tax relief offered.

Hence, we recommend reaching out to tax authorities directly to clarify how lost or stolen crypto is viewed from a tax perspective.

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Crypto Tax Breaks Poland

‍

There is no way to avoid crypto taxes entirely. However, tax authorities in Poland do offer some ways to reduce your tax bill:

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1. Offsetting Capital Losses

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Individual taxpayers can carry their capital losses forward as long as they have expenses to be accounted for in the subsequent tax year.

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2. HODL Your Assets

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• HODLing your assets is not a taxable event in Poland, and gains are only taxed when they’re realised.

Furthermore, authorities in Poland provide certain exemptions and tax benefits for residents. However, it's unclear if these apply to crypto investments. We advise consulting experienced tax professionals to confirm their applicability.

• Charitable Contributions- Donations to registered charities can be deducted from gross income, up to a limit of 6% of taxable income.
  
  
• Internet Connection Expenses- Individuals who qualify can claim a relief of 760 PLN for internet connection expenses. This relief can be claimed for up to two consecutive years.
  
  
• Free-of-Charge Blood Donation- Based on the amount of blood donated, individuals can deduct the money equivalent, up to 6% of their total income, subject to progressive taxation.
  
  
• Payments to Individual Insurance Security Account (IKZE)- Deductions can be made for payments to the non-obligatory IKZE, up to 4% of the pension insurance assessment basis for the individual in the previous year.
  
  
• Rehabilitation Expenses- Expenses related to rehabilitation and aiding life activities for disabled taxpayers or those supporting disabled individuals can be deducted. Proper documentation is required.
  
  
• Thermo-modernization Relief- Owners/co-owners of residential buildings can deduct expenses related to thermo-modernisation projects, up to a total of 53,000 PLN for all projects.

• Deduction of Social Security Contributions- An Employee's social security contributions can be deducted within specified limits. Deductions for contributions paid in another EU or EEA member state or Switzerland are also possible under certain conditions.
  
  
• Relief for Renovation of Monuments- Owners of properties listed in the Register of Cultural Property can deduct expenses for renovation and purchase of historic properties. 
• Standard Deduction for Employees- A standard deduction of 250 PLN per month is available for employees, with an annual limit of tax costs not exceeding 3,000 PLN. For multiple employment relationships, the upper limit is 4,500 PLN.

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Crypto Cost Basis Method Poland

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The examples we have used above to explain capital gains calculations are fairly simplistic and don’t reflect real-world transactions. Investors buy multiple assets of the same kind at different prices in the same tax year, and that makes capital gains calculations much more complicated. If you have multiple acquisition prices for the same asset, which one would you use to calculate the cost basis for such transactions? That’s exactly why investors should use specialised accounting methods as specified by their respective tax authorities for cost-basis calculations.

In general, there are the following cost basis methods that are used for calculating capital gains.

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1. LIFO

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LIFO or Last-In-First-Out accounting method states that the acquisition price of the most recent asset you buy is to be used as the cost basis for capital gains calculations upon disposal.

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2. FIFO

‍

FIFO or the First-In-First-Out accounting method states that the acquisition price of the earliest asset you buy is to be used as the cost basis for capital gains calculations upon disposal.

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3. HIFO

‍

HIFO, or the Highest-In-First-Out accounting method, simply states that the highest acquisition price for an asset across all acquisition instances is to be used as the cost basis for capital gains calculations upon disposal.

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4. Average Cost Basis Method

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The average cost basis method simply states that the cost basis for an asset is equal to the average acquisition price of all tokens that you currently have in your portfolio.

However, as mentioned above, Poland follows a simple method for calculating income from the sale of crypto assets, where buying crypto generated deductible costs and selling them leads to tax revenues both aggregated annually.

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Crypto Income Tax

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Income from crypto assets is simply taxed as regular income under the existing income tax rules. In Poland, income obtained from cryptocurrencies is categorised as income from monetary capital and is subject to taxation at a rate of 19%. This taxation applies to various crypto-related activities, including trading, mining, and participating in Initial Coin Offerings (ICOs).

When selling virtual currencies, the taxable amount is determined by the difference between the sale price and the purchase price. This difference is considered income and is subject to the 19% tax rate. This means that any profits made from cryptocurrency trading, as well as other transactions involving virtual currencies, are considered income.

Moreover, it's interesting to note that for goods and services tax (VAT) purposes, cryptocurrencies are considered means of payment rather than property. This classification by the Ministry of Finance influences their treatment under VAT regulations.

It's important to note that not all aspects of crypto transactions are covered by specific tax laws, which may cause ambiguity in some instances. As a result, seeking advice from an experienced tax advisor is recommended to ensure compliance and proper reporting.

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Crypto Income Tax Rates

‍

As mentioned previously, a blanket tax rate of 19% applies to income from crypto transactions in Poland.

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Tax-Free Crypto Transactions

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Listed below are some tax-free transactions in Poland:

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• Buying crypto with fiat like PLN
• Trading one cryptocurrency for another
• Transferring crypto between your wallets
• Holding crypto long-term
• And potentially crypto income upon receipt

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Taxed Crypto Transactions

‍

Listed below are some taxed crypto transactions:

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• Converting crypto to Fiat
• Selling crypto received through airdrops
• Selling crypto received through forks
• Selling crypto received through ICOs

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Tax on Mining Crypto

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Mining rewards are non-taxable at the point of receipt. The tokens received as a result of mining inherit the cost basis of 0 PLN, which essentially means that once you dispose of these assets and convert them to fiat, the entire amount will be taxed at a flat rate of 19%.

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Tax on Staking Crypto

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Although mining and staking are two separate ways of adding and validating new blocks of transactions on public ledgers, Polish authorities view them through the same lens when it comes to their taxation.

Staking rewards are taxed in the same way as mining rewards.

‍

How are Airdrops and Forks Taxed in Poland?

‍

Tokens received through airdrops and forks aren't taxed upon receipt. They can even be converted to other crypto without immediate tax implications. However, upon conversion to fiat, they inherit a cost basis of 0 PLN, triggering taxation.

Due to the zero-cost basis, the tax rate applies to the entire amount upon disposal.

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Crypto Gifts and Donations Taxes

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There are no guidelines that dictate the taxation of crypto gifts and donations in Poland. However, if we assume crypto gifts and donations to be the same as fiat donations, we can infer the tax implications of such transactions.

Just like with regular assets and property rights, the value of crypto assets and rights received through gifts, donations, or inheritance would be subject to Polish gift and inheritance tax. This tax would apply if the recipient of the assets is a Polish national, a Polish permanent resident or if the donation contract is concluded in Poland.

Non-residents might not have to pay gift and inheritance tax on movable crypto assets and rights inherited or donated within Poland as long as the donor is neither a Polish resident nor a Polish citizen.

The exemptions that apply to traditional assets and property rights, such as acquisition by close family members and certain types of property, could potentially also apply to crypto assets. However, it's important to note that the tax-free amounts and specific rules might vary depending on the personal relationship between the recipient and the donor or deceased person.

The tax calculation for crypto gifts, donations, and inheritance would be based on the fair market value of the crypto assets on the day when the tax event occurs (such as the acceptance of an inheritance or donation). The tax rate would be determined based on the relationship between the recipient and the donor or deceased, just like in the case of traditional assets.

Note that these guidelines are speculative. We suggest seeking guidance from an experienced tax professional to better understand how such transactions are taxed.

‍

Crypto Margin Trades, Futures, and CFDs

‍

Although there is no specific guidance on how income from margin trades, futures, and CFDs is taxed, income from margin or leverage trades would likely attract tax liabilities similar to that of regular trades.

This essentially means that any gains incurred from such trades would attract a flat tax rate of 19%. However, it would be prudent to seek guidance from tax professionals to understand how such transactions are taxed.

‍

Crypto ICO Taxes

‍

ICOs are special events that allow investors to own native tokens from unreleased projects in exchange for mainstream tokens like Bitcoin and Ethereum. They are similar to IPOs in the regular securities market.

Any tokens received from ICOs are not taxable at receipt. These tokens inherit the cost base equal to 0 NLP and are taxed when they’re disposed of, attracting a flat tax rate of 19%.

‍

NFT Taxes

‍

The Polish tax authorities have yet to release specific guidelines on NFT taxation. Any income from trading NFTs will likely be taxed as regular income. However, we do suggest seeking guidance from an experienced tax professional to better understand how NFTs are taxed.

‍

DAO Taxes

‍

DAOs are member-owned communities with a shared vision. All the decisions in a DAO are made by the members in the absence of central leadership. They are new-age institutions that aim to democratise decision-making and allow people to have a say in decisions that directly affect them. DAOs are often called the soul of Web3 and allow members to earn rewards in multiple ways. DAO contributors are rewarded for their contributions to the organization, similar to how centralized organizations pay salaries to their employees. It also pays out bounties for one-time projects and redistributes any profits generated through operations.

It is likely that any income from DAOs won’t be taxed at receipt and would simply be taxed at a flat tax rate of 19%. The cost basis for such transactions would be 0 NLP, as is the case with tokens received through airdrops and ICOs.

Since there is no clear guidance on the taxation of income from DAOs, this is mere speculation on our part. We suggest seeking the advice of tax experts to better understand how such transactions are taxed.

‍

DeFi Crypto Taxes

‍

The subject of DeFi taxation is barely touched upon by tax authorities in Poland and is therefore one possible grey area in the Polish tax regime. Any income from staking or lending on DeFi protocols would likely be treated the same way as income from ICOs, airdrops, or hard forks.

We suggest seeking guidance from an expert tax professional to better understand how such transactions are taxed.

‍

When to Report Crypto Taxes in Poland

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Crypto taxes in Poland should be reported between 15 February and 30 April of the year following the fiscal year in which the income was earned or losses were sustained. This reporting timeframe applies to various tax returns, including forms such as PIT-37, PIT-36, PIT-36S, PIT-36L, PIT-36LS, PIT-38, and PIT-39.

For the lump-sum tax on revenues, the tax return should be submitted between 15 February and the end of February of the year following the fiscal year. This timeline is specifically applicable to the PIT-28 and PIT-28S tax returns.

It's important to note that if 30 April falls on a Saturday or a holiday, the deadline for submitting tax returns would be the first working day following the holiday(s).

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How to File Crypto Taxes in Poland

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You can submit your crypto taxes in two ways primarily:

• Using paper forms
• Through the online portal or desktop application

If you choose the latter, you have three different avenues for submitting your tax return:

• An interactive PDF file,
• e-Deklaracje Desktop application,
• Twój e-PIT service.

The tax return prepared with taxpayer information gathered by the revenue authority can be accessed by the taxpayer through the e-Tax portal. The annually generated tax return is automatically considered submitted once the deadline has passed.

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What Records Will the Tax Administration Chamber Want

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There is no official list of documents that one needs to maintain as per the tax authorities. However, it would be best to maintain the following records for a smooth tax filing experience.

1. List of all transactions with dates and times from the exchange
2. A detailed record of the acquisition and disposal amount
3. Details about the type of asset and the parties involved in the transaction
4. A list of cost basis and disposal amount for each asset
5. A detailed record of all assets held in digital wallets you have private keys for

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How to File Crypto Taxes Using Kryptos?

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Now that you’re aware of how your crypto transactions are taxed and what forms you need to fill out to complete your tax report, here’s a step-by-step breakdown of how Kryptos can make this task easier for you:

• Visit Kryptos.io and sign up using your email or Google/Apple Account
• Choose your country, currency, time zone, and accounting method
• Import all your transactions from wallets and crypto exchanges
• Choose your preferred report. Click on the generate report option on the left side of your screen and let Kryptoskatt do all the accounting.
• Once your Tax report is ready, you can download it in PDF format.

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How to Avoid Crypto Taxes in Poland

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Avoiding crypto taxes can cause legal trouble in Poland. However, there are ways you can lower your tax bill legally:

1. Carry your losses forward and offset them against your gains
2. HODL your assets for the long term and convert them to stablecoins when you want to liquidate your positions since crypto gains are only taxable when they’re converted to fiat

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Frequently Asked Questions (FAQs)

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1. Is crypto legal in Poland?

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The question can be better framed as “Is investing in crypto legal in Poland?” and the answer to that would be yes. Although the Polish authorities do not consider crypto to be legal tender, investing in crypto is completely legal in Poland. Poland is the first country in the world that has integrated blockchain into its public welfare system. Poland is widely regarded as a crypto-friendly nation across the world.

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2. How is Crypto Taxed in Poland?

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In Poland, the taxation of cryptocurrencies follows a clear framework. Income generated from the sale of virtual currencies is considered income from monetary capital and is subject to a flat tax rate of 19%. This taxation encompasses various crypto activities such as trading, exchanging, mining, and participating in Initial Coin Offerings (ICOs). Tax liability arises when cryptocurrencies are sold based on the difference between the sale and purchase prices, resulting in either income or capital loss.

However, specific regulations for all crypto-related transactions aren't fully established, introducing some uncertainty. Seeking guidance from a specialist or experienced tax advisor is recommended to ensure accurate adherence to tax laws. Taxpayers are individually responsible for reporting their cryptocurrency-related income and transactions, and regulations concerning virtual currencies can change from one tax year to the next.

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3. Does Poland have a capital gains tax?

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No, Poland does not have a dedicated capital gains tax. The tax system in Poland treats income from the sale of assets, including investments like stocks and cryptocurrencies, as capital gains. When individuals sell cryptocurrencies at a profit, the resulting gain is considered a capital gain and is subject to taxation. The tax rate for capital gains in Poland is currently set at a flat rate of 19%.

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4. How can Kryptos simplify crypto taxes for you?

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We’ve already discussed how to file your crypto taxes in the above sections of the guide, offering a stepwise breakdown of the entire process. However, we agree that it is unreasonably complicated even for someone with a fair amount of prior knowledge. However, there’s an easy way to file your crypto taxes using crypto tax software called Kryptos.

All you need to do is log in on the platform, add all your trading accounts, wallets, and DeFi accounts and sip coffee while Kryptos does all the heavy lifting for you. The platform auto-fetches all your transactions from the tax year and generates a legally compliant tax report within minutes while also suggesting ways to lower your tax bill. It works like magic; all you need to do is try it once.

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‍All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge, and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position/stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!

As the global economy increasingly integrates digital assets, countries are adapting their tax policies to accommodate the growing popularity of cryptocurrencies and other virtual assets. The Czech Republic, known for its forward-thinking approach, has implemented significant changes in the taxation of virtual digital assets starting January 1, 2025. These changes aim to provide clarity, foster investment, and align with international standards.

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Key Tax Reforms for 2025

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The Czech government introduced a series of amendments to its tax laws, focusing on cryptocurrencies and digital assets. The reforms include the following notable provisions:

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1. Tax Exemption for Long-Term Holders

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Under the new legislation, individuals who hold cryptocurrencies or other virtual digital assets for more than three years are exempt from capital gains taxes upon selling these assets. This policy mirrors the tax treatment of traditional securities, encouraging long-term investment in the digital asset sector.

This "three-year rule" applies retroactively, meaning assets acquired before January 1, 2025, will also qualify for the exemption if held for the requisite period. For example, if an individual purchases Bitcoin in 2022 and sells it in 2025 or later, they can benefit from the tax exemption.

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2. Annual Income Threshold for Reporting

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Cryptocurrency transactions generating an annual income below 100,000 CZK (approximately $4,200) are not subject to tax reporting. This provision reduces the administrative burden on small-scale investors and those using digital assets for minor transactions.

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3. Tax-Free Everyday Transactions

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To simplify the use of cryptocurrencies as a medium of exchange, the government declared that everyday transactions, such as purchasing goods or services with Bitcoin or other cryptocurrencies, will not be considered taxable events. This reform supports the practical adoption of digital currencies in daily life.

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4. Regulatory Support for Crypto Businesses

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The Czech government also introduced measures to address challenges faced by crypto-related businesses. The new laws ensure that these businesses have fair access to banking services, reducing the risk of discrimination and fostering a supportive environment for the crypto industry.

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Compliance and Verification

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While the reforms significantly benefit digital asset holders, the government has outlined measures to ensure compliance. Key considerations include:

• Ownership Verification: Taxpayers must maintain accurate records of their cryptocurrency transactions to verify the duration of ownership. This includes timestamps of purchases, sales, and wallet transfers.
• Asset Coverage: The reforms apply to cryptocurrencies and other recognized digital assets. Non-fungible tokens (NFTs) and other blockchain-based assets may require additional classification guidelines.
• Professional Advice: Taxpayers are encouraged to consult with tax professionals or financial advisors to navigate the complexities of the new rules and ensure proper compliance.

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Implications for Investors and Businesses

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The tax reforms are expected to have a profound impact on the digital asset ecosystem in the Czech Republic:

1. Encouraging Long-Term Investment: By incentivizing long-term holding, the reforms aim to stabilize the cryptocurrency market and attract investors looking for tax-efficient opportunities.
2. Promoting Crypto Adoption: The elimination of taxes on everyday transactions removes barriers for businesses and individuals to integrate cryptocurrencies into their daily operations.
3. Fostering Innovation: With a supportive regulatory environment, the Czech Republic positions itself as a hub for blockchain innovation, attracting startups and entrepreneurs in the digital asset space.
4. Alignment with Global Trends: The Czech approach reflects a growing global trend toward recognizing and integrating digital assets within traditional financial systems.

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As the new regulations take effect, the Czech Republic’s proactive stance on digital asset taxation underscores its commitment to embracing technological advancements. These changes not only simplify the tax landscape for crypto investors but also set a benchmark for other countries seeking to navigate the complexities of digital asset regulation.

Taxpayers, investors, and businesses in the Czech Republic should closely monitor any additional guidance from tax authorities to ensure they fully understand their rights and responsibilities under the new framework. With its balanced approach, the Czech Republic is poised to become a leader in the global digital economy.

The Philippines is ranked second in the world in Chainalysis’s Global Crypto Adoption index, only behind its ASEAN neighbour Vietnam. There are two main reasons for this:

1. High remittance payments and the lack of an easily accessible financial infrastructure

2. A tech-savvy population and the government’s positive outlook on crypto

The Philippines President Ferdinand Marcos Jr. is an ardent crypto supporter and is a firm believer in the potential of crypto and the future of blockchain-based businesses in the region. A crypto-friendly leader at the helm with a vision of transforming the Philippines into the Asian crypto valley is one of the primary reasons why crypto adoption has seen a huge uptick towards the end of 2022 and the trend has continued ever since.

However, despite the mass adoption of crypto, the subject of crypto taxation is still a grey area in the Philippines as there’s no concrete regulatory framework in place. The authorities have released a few guidelines and rules dictating the tax implications of simple crypto transactions, but there are still no guidelines dictating the taxation of gains from complex transactions like ICOs, DeFi, and DAOs.

This article aims to summarise the current regulatory landscape while also offering a first-hand view of the future crypto regulations in the region.

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Is Crypto Legal in the Philippines?

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Cryptocurrency is not explicitly illegal in the Philippines. The country does not have specific laws that declare cryptocurrencies illegal. Instead, the regulatory approach in the Philippines is to define and regulate cryptocurrencies, primarily categorising them as securities or "tokenized securities products."

The Securities and Exchange Commission (SEC) of the Philippines has issued advisories and draft rules related to cryptocurrencies and digital financial products. These rules aim to enforce regulations and provide consumer protection within the crypto space. In the absence of comprehensive cryptocurrency legislation, the SEC's guidelines and the Financial Products and Services Consumer Protection Act play a significant role in shaping the regulatory landscape.

Individuals and businesses involved in cryptocurrency activities in the Philippines must adhere to the SEC's regulations and use regulated exchanges to ensure compliance with the evolving regulatory framework.

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Can the Authorities Track Crypto?

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In the Philippines, government agencies have established a robust regulatory framework to oversee cryptocurrencies, ensuring their safe and lawful usage. The Bangko Sentral ng Pilipinas (BSP), the country's central bank, has taken the lead in issuing circulars and guidelines aimed at promoting the secure use of cryptocurrencies. These guidelines are crucial in providing users with confidence in the crypto ecosystem.

The Securities and Exchange Commission (SEC) plays a significant role in this regulatory landscape. As the authority responsible for monitoring and regulating securities, investments, and financial instruments, including cryptocurrencies, the SEC ensures that crypto activities comply with existing rules and regulations.

One notable aspect of the regulatory framework is the comprehensive oversight of cryptocurrency exchanges. Under the recently issued Virtual Currency Exchange (VCE) rules, any cryptocurrency exchange operating within the country must obtain prior approval from the BSP. These regulations also mandate that crypto exchanges implement Know Your Customer (KYC) processes, adding an extra layer of security and accountability to the crypto ecosystem.

Moreover, the Philippines has introduced tax reporting requirements for its citizens involved in cryptocurrency transactions. Filipino crypto owners and traders are obligated to report their capital gains during their annual tax filings. This move aims to bring crypto transactions into the formal financial system, ensuring that they are subject to appropriate taxation.

To bolster efforts in combating illegal activities related to cryptocurrencies, the Philippines has also implemented AML and CFT measures that apply to cryptocurrency exchanges. These measures necessitate exchanges to establish robust AML/CFT programs, conduct customer due diligence, and report suspicious transactions to authorities.

This comprehensive approach significantly reduces the risk of illegal financial activities associated with cryptocurrencies.

Furthermore, international cooperation is a key component of the Philippines' strategy to combat crypto-related illegal activities. By collaborating with global organisations and foreign counterparts, authorities can share critical information and coordinate efforts to address cross-border issues like money laundering and fraud.

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How is Crypto Taxed in the Philippines?

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Cryptocurrency taxation in the Philippines encompasses various considerations and depends on the categorization and use of these digital assets. The primary form of taxation applied to cryptocurrency transactions is the capital gains tax (CGT), which can reach up to 15 per cent, though the specific rate may vary based on the type of transaction. Filipino citizens engaged in cryptocurrency ownership or trading are obligated to report their capital gains during their annual tax filings, making it imperative for individuals to include these profits in their income tax returns.

For individuals or entities actively trading cryptocurrency with the intent of short-term resale, these digital assets could be classified as inventory. Consequently, any income generated from the sale or exchange of cryptocurrency could potentially be subject to value-added tax (VAT) if it meets the applicable threshold, typically set at 12 per cent in the Philippines.

In contrast, cryptocurrency held for investment purposes, such as capital appreciation over an extended period, is more likely to be considered an intangible asset. Under this classification, cryptocurrency becomes a capital asset for tax purposes. Gains resulting from the sale or exchange of such assets would then be subject to ordinary income tax.

It's important to note that the landscape of cryptocurrency taxation in the Philippines is dynamic. The government has expressed its intention to implement further regulations and potentially introduce new taxes on cryptocurrency transactions in the near future. As such, individuals and entities involved in cryptocurrency activities should remain vigilant regarding changes in tax regulations and seek professional guidance to ensure compliance with evolving tax laws. The lack of precise guidelines can lead to varying interpretations, making professional tax advice crucial for those navigating the cryptocurrency tax landscape in the Philippines.

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Future of Crypto Regulations in the Philippines

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The future of crypto regulations in the Philippines appears to be evolving with a cautious but proactive approach. While the country has taken significant steps to develop a comprehensive regulatory framework for cryptocurrencies, several key indicators suggest what the future might hold.

The Philippines' financial regulator, the Securities and Exchange Commission (SEC), has demonstrated its commitment to a well-thought-out approach by partnering with the University of the Philippines Law Center (UPLC) to develop guidelines for digital assets. This collaboration indicates a concerted effort to ensure that regulations are not only robust but also well-informed.

The fact that the Implementing Rules and Regulations of Republic Act No. 11765 were opened for public comment shows a commitment to transparency and stakeholder involvement in shaping regulations. This inclusive approach is likely to continue in the future, ensuring that the crypto community and businesses have a say in the development of the regulatory framework.

The Philippines has emphasised investor protection as a priority in its regulatory approach. The delayed release of the crypto framework to study the reasons behind market failures, like the collapse of the FTX exchange, underscores the commitment to safeguarding investor interests.

Despite the absence of explicit references to "crypto" or "blockchain" in the legislation, the regulator's willingness to work on guidelines for digital assets indicates an adaptable regulatory environment.

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Frequently Asked Questions (FAQs)

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1. Is cryptocurrency legal in the Philippines?

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Yes, cryptocurrency is not explicitly illegal in the Philippines. The country does not have specific laws that declare cryptocurrencies illegal. Instead, the regulatory approach is to define and regulate cryptocurrencies, primarily categorising them as securities or "tokenized securities products."

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2. What are the key regulatory bodies overseeing cryptocurrency in the Philippines?

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The key regulatory bodies overseeing cryptocurrency in the Philippines include the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP). The SEC monitors and regulates securities, investments, and financial instruments, including cryptocurrencies, while the BSP, as the central bank, plays a crucial role in issuing guidelines to promote the secure use of cryptocurrencies.

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3. How is cryptocurrency taxed in the Philippines?

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Cryptocurrency taxation in the Philippines includes considerations such as capital gains tax (CGT), which can reach up to 15 per cent. Filipino citizens involved in cryptocurrency ownership or trading are required to report their capital gains during their annual tax filings. Depending on the classification of cryptocurrency as either inventory or an intangible asset, it may be subject to value-added tax (VAT) or ordinary income tax.

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4. How can individuals and businesses stay compliant with cryptocurrency regulations in the Philippines?

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To stay compliant with cryptocurrency regulations in the Philippines, individuals and businesses should adhere to guidelines issued by the SEC and BSP. This includes using regulated exchanges, implementing Know Your Customer (KYC) processes, and reporting capital gains during annual tax filings. Given the dynamic nature of crypto taxation, seeking professional tax advice and staying informed about regulatory changes is crucial.

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‍All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position/stance, you should always consider seeking independent legal, financial, taxation or other advice from professionals. Kryptos is not liable for any loss caused by the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!

Vietnam has been ranked no. 1 two times in a row in Chainalysis’s Global Crypto Adoption Index, and there are good reasons for it. According to a report by Statista, over 69% of the Vietnamese population does not have access to traditional financial services like banking. Moreover, Vietnam is one of the biggest beneficiaries of remittance payments, receiving over $13.5 billion in 2022 alone. With more than 60% of the Vietnamese population residing in rural areas without access to a bank account, Bitcoin and other cryptocurrencies offer a great alternative.

Moreover, Vietnam is one of the few countries lacking a proper framework to regulate cryptocurrencies. Almost all crypto transactions are tax-free in the country, as there is no official statement from the State Bank of Vietnam or other central authorities that categorises cryptocurrencies as an asset or security.

Now, there are regulations governing the categorisation of assets in Vietnam and facilitating their taxation. However, interpreting these regulations in the context of crypto assets is a fairly complicated task and is beyond the expertise of regular citizens. The goal of this article is to explain the current crypto regulatory landscape and summarise the future of crypto taxation in the country.

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Is Crypto Legal in Vietnam?

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In Vietnam, cryptocurrencies are categorised as assets or goods based on legal definitions provided in the 2015 Civil Code and the Commercial Law 2005. These laws broadly define property to include objects, money, valuable papers, property rights, as well as movable property, including those that may form in the future. This classification implies that cryptocurrencies can be traded within the country.

However, despite their categorization as assets or goods, the legal status of cryptocurrencies in Vietnam is complex and multifaceted. The State Bank of Vietnam, which serves as the country's central bank, does not recognize cryptocurrencies as a legal means of payment. This position is outlined in Article 1 of Decree 80/2016/ND-CP on non-cash payments. The State Bank's stance is further reinforced in Document No. 5747/NHNN-PC dated July 21, 2017.

The Investment Law 2020 does not explicitly prohibit virtual currency investment in its list of industries where business investment is prohibited. Moreover, there is no specific directive that forbids individual investors from participating in virtual currency investments.

However, it's essential to note that certain securities-related entities in Vietnam, such as public companies, securities companies, fund management companies, and securities investment funds, are prohibited from engaging in illegal issuance, trading, and brokerage activities related to virtual currencies. This directive aligns with an Official Letter, specifically Official Letter 4486/UBCKGSDC, dated July 20, 2018, issued by the State Securities Commission.

However, buying and selling crypto assets is legal in Vietnam, and there are no regulations restricting individual investment in crypto assets in the region.

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Can the Authorities Track Crypto?

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Although the authorities have made attempts to regulate exchanges and crypto service providers based in the region, the task has proved to be more challenging than expected due to the lack of a concrete regulatory framework.

The absence of AML and reporting regulations has posed significant challenges for authorities in the country. First off, the lack of investor protection measures has left individuals exposed to various scams and fraudulent schemes within the crypto sector. Without regulatory safeguards, it becomes easier for malicious actors to deceive unsuspecting investors, leading to financial losses.

Second, the absence of a well-defined regulatory framework makes it challenging for authorities to track and combat fraudulent and criminal activities associated with crypto, including money laundering. The decentralised nature of crypto transactions can impede efforts to trace wrongdoers, leaving a gap in law enforcement.

Moreover, the volatile and uncertain business environment in the crypto sector adds complexity to the situation. Investors often lack the necessary guidance and information to make informed decisions, contributing to increased risks.

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How is Crypto Taxed in Vietnam?

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The taxation of cryptocurrency in Vietnam has been a subject of legal disputes and ambiguity due to the lack of a proper regulatory framework. The story starts with a 2016 guidance issued by the Ministry of Finance (MOF) in response to a query from a local tax authority.

According to the MOF's Official Letter No. 4356/BTC-TCT, cryptocurrency transactions, specifically buying and selling digital currency, were initially classified as taxable commercial business activities. These activities were subjected to various taxes, including Value-Added Tax (VAT), Corporate Income Tax (CIT) for businesses, and Personal Income Tax (PIT) for individuals. This interpretation was based on the view that digital currency was a form of property and a movable commodity.

However, this approach led to disputes, with taxpayers challenging the tax assessments imposed by local tax authorities. The legal battle culminated in a court case, which resulted in a significant decision. The court ruled that cryptocurrencies were not officially defined as an asset or good within Vietnamese law. Furthermore, the court found that the MOF's official letter had exceeded its authority.

Adding to the complexity, the State Bank of Vietnam does not recognize virtual currencies like Bitcoin as legal currencies or accepted means of payment. Decree No. 96/2014/ND-CP, issued by the government, outlines administrative penalties for the illegal issuance, supply, and use of means of payment involving virtual currencies.

As a result of these legal intricacies and inconsistencies, there has been a lack of substantial progress or clear guidance regarding crypto taxation in Vietnam. The absence of a well-defined regulatory framework leaves the taxation of crypto income in a state of uncertainty, making it challenging for both taxpayers and tax authorities to navigate this evolving landscape.

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Future of Crypto Regulatory Landscape in Vietnam

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The future of cryptocurrency regulations in Vietnam is transforming, led by a series of official decisions, directives, and guidelines.

In August 2017, Decision No. 1255/QD-TTg by the Prime Minister initiated the establishment of a legal framework for managing virtual currencies, electronic money, and virtual assets. This decision recognized the need for regulatory clarity in the cryptocurrency space, indicating the government's awareness of its growing importance.

Following this, April 2018 saw the issuance of Official Directive No. 10/CT-Ttg, which defined the roles and responsibilities of state agencies in overseeing crypto-related activities. This directive underlines how various government bodies should manage and regulate the cryptocurrency sector, solidifying the government's commitment to maintaining control.

A pivotal development came with Decision 942/QD-TTg, a recent move that outlines the e-government development strategy, charting a path toward a digital government by 2030. This decision designated the State Bank of Vietnam as the primary entity responsible for researching, building, and piloting the use of virtual money based on blockchain technology between 2021 and 2023. It underscores the government's commitment to exploring the potential of cryptocurrencies and blockchain for modernising the economy and governance.

Moreover, the Ministry of Finance established a Study Group on virtual assets and currencies in April 2020 under Decision No. 664/QD-BTC. This group's mission is to conduct research and propose policy frameworks and management mechanisms for regulating digital assets. This initiative reflects the government's proactive stance in comprehending and regulating the crypto landscape.

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Frequently Asked Questions (FAQs)

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1. Is cryptocurrency legal in Vietnam?

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Cryptocurrency's legal status in Vietnam is currently in a state of transition. While there isn't a comprehensive regulatory framework governing cryptocurrencies, it's not explicitly illegal. The State Bank of Vietnam does not accept cryptocurrencies as legal currencies or means of payment. Decree No. 96/2014/ND-CP prohibits the illegal issuance, supply, and use of means of payment such as Bitcoin. However, this implies an outright ban on crypto transactions. The government is actively exploring the use of virtual money based on blockchain technology, signalling a potential shift in stance.

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2. How are cryptocurrencies taxed in Vietnam?

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Cryptocurrency taxation in Vietnam remains uncertain due to the lack of a clear legal framework. However, some directions have been issued. Digital currency is considered a taxable commercial business activity, subject to Value-Added Tax (VAT), Corporate Income Tax (CIT) for businesses, and Personal Income Tax (PIT) for individuals. The application of these taxes is yet to be fully defined.

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3. What is the current status of cryptocurrency regulations in Vietnam?

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As of now, Vietnam lacks a comprehensive regulatory framework for cryptocurrencies. The government is exploring options and has issued directions for managing virtual currencies and digital assets. This regulatory landscape is evolving, and the legal status of cryptocurrencies remains a subject of debate.

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4. Do I need to report my cryptocurrency holdings to tax authorities in Vietnam?

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There is no specific requirement to report cryptocurrency holdings to tax authorities as of now. However, due to the evolving regulatory environment, it's advisable to stay informed about any changes in reporting obligations.

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All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position/stance, you should always consider seeking independent legal, financial, taxation or other advice from professionals. Kryptos is not liable for any loss caused by the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!

Global crypto adoption has skyrocketed in recent years despite the inflation-induced market slump, and authorities worldwide are confronted with the challenge of regulating the space with strict guidelines to protect investors and prevent malpractices while maintaining an open ecosystem for cryptocurrencies to thrive.

South Korea is no exception. The country has always been at the forefront of adopting and implementing new technologies. According to a recent report published by the National Tax Service (NTS) of South Korea, crypto assets account for 70% of the total overseas assets, amounting to almost $100 million.

Since crypto assets are neither viewed as a currency nor as a financial asset, crypto transactions are mostly tax-free in the country. The regulators have recently announced a new set of guidelines for crypto taxation, which were scheduled for 2024, will now be enforced in 2025 due to the lack of a proper regulatory framework.

However, there are guidelines that dictate the operative prerequisites for crypto exchanges and taxation of certain crypto transactions. The article aims to summarise the current regulatory landscape around cryptocurrencies in South Korea while taking a look at what the future of crypto would look like in the country.

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Is Crypto Legal in South Korea?

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Like most other countries in the world, South Korea doesn’t consider crypto to be legal tender and while the regulations around crypto taxations are still being deliberated, it is likely that the authorities will not grant legal tender to crypto assets. Because doing so would mean making all crypto transactions tax-exempt.

Cryptocurrencies are currently being regulated under Anti-Money Laundering (AML) and securities regulations enforced by the Financial Services Commission (FSC). Crypto service providers follow guidelines rather than laws, and these guidelines are vital for understanding the cryptocurrency landscape. South Korea's regulatory approach has evolved, with recent moves to deregulate the industry, including the legalisation of security tokens and a shift in stance towards Initial Coin Offerings. The legislature intends to enact the Digital Asset Basic Act to regulate all aspects of virtual/digital assets, the ambit of which extends to non-security type tokens.

Key legislation includes the Electronic Financial Transactions Act, defining cryptocurrencies as "electronic currency" and specifying rules for their use, and the Act on Reporting and Use of Specific Financial Information, requiring financial institutions to report suspicious crypto-related transactions. South Korea has recently introduced comprehensive cryptocurrency legislation through the Digital Asset Basic Act (DABA), creating a favourable environment and a two-lane regulatory framework for ICOs. This proactive approach aims to protect crypto investors and solidify South Korea's position as a regional leader in cryptocurrency adoption and regulation.

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Can the NTS Track Your Crypto Transactions?

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Crypto exchanges in South Korea are subject to several regulations, which have been implemented to enhance transparency and security within the cryptocurrency market. One significant regulation mandates that traders link their cryptocurrency trading accounts to real-name bank accounts. This means that users must have a bank account with the same financial institution as their cryptocurrency exchange. Additionally, the South Korean Government banned the use of anonymous accounts in cryptocurrency trading.

In addition to real-name bank accounts, South Korean crypto service providers are required to implement enhanced Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) processes based on a risk-based strategy. This involves conducting customer due diligence and reporting suspicious transactions. These requirements are aimed at preventing illicit activities such as money laundering and terrorist financing, bolstering the integrity of the cryptocurrency market.

To further strengthen cybersecurity, crypto companies are obligated to obtain a certificate from the Korea Internet & Security Agency for an Information Security Management System (ISMS). This certification ensures that these companies have robust cybersecurity measures in place to protect user data from potential cyber threats.

Moreover, crypto service providers are mandated to provide the financial intelligence unit with various pieces of information, including the company's details and bank account information. This facilitates regulatory oversight and helps authorities monitor transactions and activities on cryptocurrency exchanges.

So as far as tracking crypto transactions goes, the NTS has enough resources to easily track individual crypto transactions and identify any suspicious transactions.

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How Will Crypto Transactions Be Taxed?

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On December 31, 2024, South Korea officially enacted the 2025 Tax Reform Bill following its approval by the National Assembly on December 10, 2024. Unless stated otherwise, the provisions of the 2025 Tax Reform will generally apply to fiscal years starting on or after January 1, 2025

As per the latest guidelines, a 20% tax will apply to profits from cryptocurrency transactions exceeding 50 million Korean won (KRW) annually (approximately $35,900 USD).

Taxable gains will be calculated as the difference between the selling price and the acquisition cost, adjusted for any transaction fees. For individuals unable to provide detailed acquisition cost records, the government will allow up to 50% of the sale price to be treated as the acquisition cost.

Starting in the second half of 2025, businesses involved in cross-border virtual asset transactions are required to register with authorities and report their transactions to the Bank of Korea monthly.

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Future of the Crypto Regulatory Landscape in South Korea

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South Korean authorities are taking significant steps to protect cryptocurrency investors. The approval of the Virtual Asset User Protection Act is a pivotal move towards ensuring investor safety. This legislation requires crypto service providers to implement robust security measures, including the safeguarding of user assets and holdings of insurance. The provision of real-name bank accounts for traders and maintaining transaction records enhances transparency and accountability within the crypto ecosystem.

Moreover, penalties for activities like price manipulation and false promotion of crypto assets demonstrate the commitment to maintaining market integrity. These measures aim to build trust and confidence among investors, for the healthy growth of the crypto market.

The future of cryptocurrency in South Korea appears promising yet cautiously regulated. The government acknowledges the importance of fostering innovation while ensuring consumer protection. The forthcoming Digital Asset Basic Act (DABA) is expected to provide a comprehensive legal framework for the cryptocurrency sector. It will establish clear rules for virtual asset providers, covering areas like listing, disclosure, business qualifications, and advertisement regulation.

The changing regulatory environment aims to find an equilibrium between security and innovation. It acknowledges that too many regulations can act as a barrier to crypto adoption, while a lack of concrete regulations can create uncertainty and unrest. South Korea's emphasis on safeguarding investors and promoting cautious expansion positions it as an exciting hub for the cryptocurrency's future.

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Frequently Asked Questions (FAQs)

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1. How are capital gains from cryptocurrencies taxed in South Korea?

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As per the latest guidelines, a 20% tax will apply to profits from cryptocurrency transactions exceeding 50 million Korean won (KRW) annually (approximately $35,900 USD).

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2. What is the impact of the Digital Asset Basic Act on cryptocurrency taxation in South Korea?

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South Korean President Yoon Suk-yeol has deferred taxation on crypto investment gains in the latest guidelines. The new rules will impose a 20% tax on crypto gains exceeding $35,900 per year.

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3. How does the transparent nature of blockchain technology affect cryptocurrency taxation in South Korea?

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The transparent nature of blockchain technology makes cryptocurrency transactions traceable. Individuals and businesses must consider the tax implications of holding and trading cryptocurrencies in South Korea.

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4. How does South Korea adapt its cryptocurrency tax policies to the changing landscape?

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The South Korean government is revising its cryptocurrency tax policies in response to evolving circumstances. This adaptability reflects the dynamic nature of the cryptocurrency market and its regulatory environment.

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All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position/stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!

Step by step on how to declare your tax report

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Start by logging in to Skatteverkets website and navigate to "Inkomstdeklaration 1".

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When you are on the Inkomstdeklaration 1(Income tax) page, click the "Bilagor" link

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Then add the enclosure "Försäljning av värdepapper m.m. (K4)"

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Click the "Övriga värdepapper, andra tillgångar (kapitalplaceringar t.ex. råvaror, kryptovalutor) m.m" link.

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Then fill in all your purchases and remember to separate profit and loss into two different columns.
(It is only possible to fill in integers).

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When everything is filled in and finished, go to "Ändra"(Change) and then "Övriga upplysningar"(other information). In that form you will write the exact amount of crypto in decimals that you have sold or lent out.

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Check that everything is correct and then send it in.

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Disclaimer

We at kryptos.io strive for the information to be correct in all respects. However, we can not guarantee this, and therefore can not take any responsibility for any losses caused by incorrect information on this web service. However, we are grateful for all remarks about inaccuracies. If you have found something that seems wrong, feel free to send us a message at contact@kryptos.io.

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All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position / stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!

Declaration guide for file transfer of SRU files.

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When transferring SRU files to the Swedish Tax Agency, the following two files must be transferred:


BLANKETTER.SRU

INFO.SRU
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You may not rename the files after they have been created. If you do, the transfer will not work.

The form BLANKETTER.SRU must not be larger than 5 Mb.

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The first thing you should do is choose the tax year for the year you want to declare, you do it here on kryptos.io/tax-reports. Then download the SRU files that contain the information you need to declare.

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To download the files, go to Reports and select k4 SRU Forms and then click "DOWNLOAD REPORT"

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Once the files are downloaded, the content will look like this

Notice that BLANKETTER contains more information, it's the same information as in the k4 form section D but now in SRU code.

What you need to do now in the BLANKETTER och INFO files is to enter your personal information:

BLANKETTER.sru

On the file line #IDENTITET enter your social security number (12 digits).

On the file line #NAMN enter your name.

INFO.sru

On the file line #ORGNR enter your social security number (12 digits).

On the file line #NAMN enter your name.

On the file line #POSTNR enter your postal code.

On the file line #POSTORT enter your street address.

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When the files have been downloaded, log in to the Swedish Tax Agency and proceed to Income Tax return ("Inkomstdeklaration").

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Then choose "Transfer files" ("Överföra filer").

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Select the SRU files: "forms" ("blanketter") and "info" ("info").

Then click "Add" ("Lägg till") and then "Transfer" ("Överför >>")
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When the SRU files have been transferred, it will look like this (please note that this is a test file).
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You can also make this file transfer when you declare the Income Tax Return ("Inkomstdeklaration").

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When you are on the "Inkomstdeklaration 1" (Income tax) page, click the "Bilagor" link.

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Then add the appendix "Sale of securities etc. (K4)" ("Försäljning av värdepapper m.m. (K4)") and select "Import" (Importera).

Instead of entering all the events separately, you simply transfer the SRU files which contains all the necessary information.

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For more information click here -> Information about SRU

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Disclaimer

We at kryptos.io strive for the information to be correct in all respects. However, we can not guarantee this, and therefore can not take any responsibility for any losses caused by incorrect information on this web service. However, we are grateful for all remarks about inaccuracies. If you have found something that seems wrong, feel free to send us a message at contact@kryptos.io.

‍

All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position / stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!

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Deklarationsguide för filöverföring av SRU-filer.

Vid filöverföring av SRU-filer till Skatteverket är det de två följande filerna som ska överföras:

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BLANKETTER.SRU

INFO.SRU

Du får inte döpa om filerna efter det att de har skapats. Då fungerar inte överföringen.

Filen BLANKETTER.SRU får inte vara större än 5 Mb.

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Det första du bör göra är att välja taxeringsår för de åren du vill deklarera, det gör du här kryptos.io/tax-reports. Ladda sedan ner SRU-filerna som innehåller den information som du behöver för att deklarera.

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För att ladda ner filerna går du till Reports och väljer k4 SRU Forms och klickar sedan på "DOWNLOAD REPORT"

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När filerna är nedladdade kommer innehållet att se ut så här

Lägg märke till att i filen BLANKETTER är det mer information, det är den samma informationen som finns i k4-blanketten avsnitt D fast här i SRU-kod.

Det du måste göra nu i BLANKETTER och INFO-filerna är att skriva in din personliga information:

BLANKETTER.sru

På filraden #IDENTITET skriver du in ditt personnummer (12 siffror).

På filraden #NAMN skriver du in ditt namn.

INFO.sru

På filraden #ORGNR skriver du in ditt personnummer (12 siffror).

På filraden #NAMN skriver du in ditt namn.

På filraden #POSTNR skriver du in ditt postnummer.

På filraden #POSTORT skriver du in din postort.

När filerna är nedladdade loggar du in på Skatteverket och går vidare till "Inkomstdeklaration".
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Välj sedan "Överföra filer".

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Välj SRU-filerna: "blanketter" och "info". Klicka på "Lägg till" och sedan på "Överför >>".
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När överföringen av filerna är färdig kommer det se ut så här (observera att detta är en testfil).
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Du kan även göra denna filöverföring när du deklarerar "Inkomstdeklarationen".

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När du är inne på "Inkomstdeklaration 1" ska du välja "Bilagor"

Lägg sedan till bilagan "Försäljning av värdepapper m.m. (K4)" och välj "Importera"

Istället för att skriva in alla skattepliktiga händelser var för sig, överför du SRU-filerna som innehåller all nödvändig information.

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För mer information klicka här -> Information om SRU

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Ansvarsfriskrivning

Vi på kryptos.io strävar efter att informationen ska vara korrekt i alla avseenden. Vi kan dock inte garantera detta, och kan därför heller inte ta något ansvar för eventuella förluster som orsakats av felaktig information på denna webbtjänst.
Vi är dock tacksamma för alla påpekanden om felaktigheter. Om du hittat något som verkar fel får du gärna skicka ett meddelande till oss på contact@kryptos.io.

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All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position / stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!

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Steg för steg om hur du deklarerar

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Börja med att logga in på Skatteverkets hemsida och navigera till "Inkomstdeklaration 1".

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När du inne på Inkomstdeklaration 1 ska du välja "Bilagor"

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Lägg sedan till bilagan "Försäljning av värdepapper m.m. (K4)"

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Gå vidare till "Övriga värdepapper, andra tillgångar (kapitalplaceringar t.ex. råvaror, kryptovalutor) m.m".

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Fyll sedan i alla dina köp och kom ihåg att separera vinst och förlust i två olika kolumner. (Det är bara möjligt att fylla i heltal).

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När allting är ifyllt och färdigt, gå sedan till "Ändra" och lägg till övriga upplysningar.
Här ska du skriva den exakta mängd krypto i decimaler som du har sålt eller lånat ut.

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Kontrollera så allt stämmer och skicka sedan in.

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Ansvarsfriskrivning

Vi på kryptos.io strävar efter att informationen ska vara korrekt i alla avseenden. Vi kan dock inte garantera detta, och kan därför heller inte ta något ansvar för eventuella förluster som orsakats av felaktig information på denna webbtjänst.
Vi är dock tacksamma för alla påpekanden om felaktigheter. Om du hittat något som verkar fel får du gärna skicka ett meddelande till oss på contact@kryptos.io.

‍

All content on Kryptos serves general informational purposes only. It's not intended to replace any professional advice from licensed accountants, attorneys, or certified financial and tax professionals. The information is completed to the best of our knowledge and we at Kryptos do not claim either correctness or accuracy of the same. Before taking any tax position / stance, you should always consider seeking independent legal, financial, taxation or other advice from the professionals. Kryptos is not liable for any loss caused from the use of, or by placing reliance on, the information on this website. Kryptos disclaims any responsibility for the accuracy or adequacy of any positions taken by you in your tax returns. Thank you for being part of our community, and we're excited to continue guiding you on your crypto journey!

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