Streamlining cryptocurrency tax payments
Major crypto asset (virtual currency) exchange Binance announced on the 6th the tax calculation tool “Binance Tax”.
Taxes can get complicated, especially in crypto.
To help, we’ve added a new tool called #Binance Tax.
Launching initially in France, with plans to introduce it to other regions, Binance Tax allows users to better understand the taxes they owe.https://t.co/r4ffSew8R3
—Binance (@binance) February 6, 2023
The purpose of tool development is to reduce the burden on users regarding tax payment, but the launch is still in the early stages. The official website lists it as “beta” and does not support all transactions on Binance at this time.
The official announcement explains that it can be used by users living in France, but overseas media reports that it can also be used in Canada. Blockchain media “Decrypt”, which interviewed Binance representatives, reported that they plan to increase the number of compatible markets later this year. A Binance representative did not disclose the specific country name or timing.
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In an official announcement, Binance explained that in the future, in addition to increasing the region where it can be used, it will support more blockchains and support wallet services other than Binance. Transactions currently do not support futures trading or NFT (non-fungible token) trading.
What is futures trading?
A transaction that promises to buy or sell a specific asset at a price currently agreed upon on a predetermined date in the future. Futures trading is conducted not only for virtual currencies but also for other assets, and is one of the representative derivative trading.
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Features of the tool
Users can use Binance Tax for free. Up to 100,000 transactions can be calculated.
Futures and NFTs are not yet supported, but it supports spot trading, donations, rewards from blockchain forks, etc. With one click, you can import transactions on Binance into Binance Tax and calculate profit and loss.
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Binance said in its announcement that the timing of tax payments is a big burden, especially for crypto traders. Day traders make thousands of transactions each year, so calculating taxes accurately takes time and effort, he explained.
On the other hand, there are also issues on the side of tax collection for virtual currencies. In October last year, Japan’s Cabinet Office released materials from the “Expert Meeting on Improving the Tax Payment Environment (9th).” As one of the “research cases that are feared to have an adverse effect on tax fairness,” he cited a research into cryptocurrency transactions.
At this time, the National Tax Agency raised the following two issues, using virtual currency as an example.
- It is difficult to obtain information on transactions made on overseas exchanges
- If a large amount of profit is undeclared, it may be subject to non-declaration additional tax.
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