Just like any other part of your assets, your crypto assets must be declared to the tax authorities. The moment you do not pass on your bitcoin (BTC), ethereum (ETH) or other crypto currency, this can lead to trouble such as fines in the future. The tax authorities also have resources to trace every transaction on the blockchain, making keeping your crypto assets hidden is a major risk.
Binance, the world’s largest crypto exchange, has launched a new tool to help crypto owners file tax returns.
Binance tax
Called ‘Binance Tax’, this new tool helps users understand their crypto tax obligations for up to 100,000 Binance transactions at no additional cost. For the average bitcoin HODLer, the tax return is not very complicated. For a detailed explanation of how the tax system of boxes and cryptocurrencies works, take a look at our bitcoin tax return page. However, it is a bit more complicated for traders and Binance wants to conjure up the right data with Binance Tax with just one click of a button.
In the announcement today announced that Binance Tax is currently in a pilot phase in France and Canada before expanding to other global markets from the Binance ecosystem later in the year. In addition, it is currently only available for information held on Binance, but indicates that it plans to expand in the future to integrate with other industry platforms.
Crypto and tax
The moment you own crypto as a private individual with the aim of holding it for the long term, this will be taxed in box 3. According to the tax authorities, January 1 is the reference date of someone’s assets, which means that you must use the value of your crypto assets on January 1 for the tax return. However, you will not have to pay tax on the first €50,000.
However, once trading crypto has become a daytime activity, your profit will almost certainly be taxed in box 1. This box relates to income from work and home.
