Is cryptocurrency taxable?
What crypto transactions are taxable and at what rates?
|No.||Type of cryptocurrency transaction||Taxable||Tax classification|
|1||Buying cryptocurrency from fiat money||No||–|
|2||Selling cryptocurrency to fiat money||Yes||Captial gains tax|
|3||Trading cryptocurrency for an equivalent cryptocurrency||Yes||Capital gains tax|
|4||Paying cryptocurrency a merchant for product/service(Crypto debit cards)||Yes||Captial gains tax|
|5||Receiving cryptocurrency airdropped tokens from hard fork||Yes||Income tax|
|6||Mining cryptocurrency||Yes||Income tax|
|7||Getting paid in cryptocurrency (salary, sale of product/service)||Yes||Income tax|
|8||Transferring cryptocurrency between wallet/exchange||No||–|
|9||Gifting/donating cryptocurrency (within admissible limits)||No||–|
Note: The information provided is very general and applies to most countries including US, UK, Australia, etc. Some countries like Dubai don’t charge taxes where you can cash out crypto tax-free legally. So, check if your country taxes crypto the same way and the respective tax rates.
Reporting taxes on cryptocurrency
1. Know the Crypto laws in your country
Knowing the regulations and tax rates should be your first step to staying compliant with the tax department. Don’t worry, we have done the footwork for you. Download our crypto taxation manual for every country
2. Collect the list of crypto transactions made
3. Calculate crypto taxes
4. Add it to the tax form
Crypto predominantly is taxed under capital assets. So, if you have made and capital loses it can balance it out against crypto gains or vice versa minimizing taxes. Further you can also do the same withing crypto assets. So be aware of the best practices and optimize taxes in the best way or contact a Tax optimization expert at it.
5. File your crypto taxes
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