1. How to make the most of Binance Tax?
Binance Tax is a powerful tool that can help you with your crypto tax reporting. Depending on your tax jurisdiction, your Capital Gains and Income Gains report may not include specific tax calculation rules in your country of residence.
France and Canada
Currently, Binance Tax only offers country-specific tax rules in the following jurisdictions:
- France
- Canada
For these jurisdictions, specific detailed tax logic is applied to categorize transactions with reference to local tax rules.
While every effort has been made to ensure the accurate application of local tax rules, the accuracy of the tool is limited by several factors, not least of which is the absence of non-Binance transactions. As such, the reports generated cannot be relied upon as final, but are intended to be used to support you and your independent tax professional in compiling your tax reporting requirements in conjunction with all other non-Binance data required.
Other jurisdictions
For other jurisdictions, Binance Tax applies generic tax rules to help you determine capital gains, losses, and income generated through crypto transactions. Your Capital gains report will include the acquisition date, sell date, proceeds from sales, cost basis, gains, holding period, and transaction type. Similarly, your income gains report will include income gains and transaction type. We recommend working with a tax professional to determine whether country-specific rules, additions, or exclusions apply to the default handling applied below.
Table: Binance Tax transaction types and default tax handling
| Transaction Type | Category | Description | Tax Implication | Default Tax Handling |
| Receive | Gift | Receive cryptocurrency from someone other than yourself | A [Receive] transaction is a transaction that leads to an increase in your holdings, a transaction in which you are the beneficiary. | Non-taxable income |
| Receive | Mining | Receive cryptocurrency from mining | A [Receive] transaction is a transaction that leads to an increase in your holdings, a transaction in which you are the beneficiary. | Income gains |
| Receive | Airdrop | Receive cryptocurrency after a blockchain split | A [Receive] transaction is a transaction that leads to an increase in your holdings, a transaction in which you are the beneficiary. | Income gains |
| Receive | Payment | Get cryptocurrency as salary or in return for exchange for goods or services | A [Receive] transaction is a transaction that leads to an increase in your holdings, a transaction in which you are the beneficiary. | Income gains |
| Receive | Rebate | Receive cryptocurrency due to staking/card rebate | A [Receive] transaction is a transaction that leads to an increase in your holdings, a transaction in which you are the beneficiary. | Income gains |
| Receive | Fork | Receive cryptocurrency after a blockchain split | A [Receive] transaction is a transaction that leads to an increase in your holdings, a transaction in which you are the beneficiary. | Income gains |
| Receive | Reward | Receive cryptocurrency as rewards (e.g., staking/Binance Earn rewards, referral bonus, etc.) | A [Receive] transaction is a transaction that leads to an increase in your holdings, a transaction in which you are the beneficiary. | Income gains |
| Send | Gift | Send cryptocurrency for goods or services | A [Send] transaction is a transaction that leads to a decrease in your holdings, a transaction in which you are not the beneficiary. | Taxable event (Capital Gain) |
| Send | Donation | Send cryptocurrency to charities | A [Send] transaction is a transaction that leads to a decrease in your holdings, a transaction in which you are not the beneficiary. | Taxable event (Capital Gain) |
| Send | Reversal | Deduct the reversal amount of the corresponding income. Typically used to reverse a previous Receive or Reward | A [Send] transaction is a transaction that leads to a decrease in your holdings, a transaction in which you are not the beneficiary. | Negative receive or reward, i.e., your income gains decrease with the outgoing net worth of the Reversal |
| Send | Payment | Send cryptocurrency for goods or services | A [Send] transaction is a transaction that leads to a decrease in your holdings, a transaction in which you are not the beneficiary. | Taxable event (Capital Gain) |
| Send | Internal | Move cryptocurrency between your accounts | A [Send - Internal] transaction is a transaction where your cryptocurrency is moved from one of your accounts to a different account that is also yours. These can be between two Binance wallets/accounts (e.g., from Spot to Funding Wallet), or between a Binance and off-chain account/wallet (e.g., from Coinbase to Binance). Please note that the second type of transfer may involve a fee that can be offset against your P&L in countries that allow it. | Non-taxable event |
| Buy | - | Sell fiat currency to buy cryptocurrency | A [Buy] transaction leads to an increase in your crypto holdings, and a decrease in your fiat holdings. | Non-taxable event |
| Sell | - | Sell cryptocurrency to buy fiat currency | A [Sell] transaction leads to a decrease in your crypto holdings, and an increase in your fiat holdings. | Taxable event (Capital Gain) |
| Trade/Swap/Convert (Label: Trade) | - | Sell one cryptocurrency to buy another cryptocurrency | A [Trade] transaction is a transaction where one cryptocurrency is traded/swapped/converted to another cryptocurrency. | Taxable event (Capital Gain) |
| Transfer | - | Move cryptocurrency between your accounts | A [Transfer] transaction is a transaction where your cryptocurrency is moved from one of your accounts to a different account that is also yours. These can be between two Binance wallets/accounts (e.g., from Spot to Funding Wallet), or between a Binance and off-chain account/wallet (e.g., from Coinbase to Binance). Please note that the second type of transfer may involve a fee that can be offset against your P&L in countries that allow it. | Non-taxable event |
| Costs | - | Binance Tax currently shows the following transactions as costs:
| - | TBD |
| Deposit | - | When you deposit fiat currency into Binance | A [Deposit] transaction is a transaction where fiat currency is deposited to Binance. | Non-taxable event |
| Withdrawal | - | When you withdraw fiat currency from Binance | A [Withdrawal] transaction is a transaction where fiat currency is withdrawn from Binance. | Non-taxable event |
Cost Basis Method
Binance Tax supports the frequently-used cost basis methods, including First-In-First-Out (FIFO), Last-In-First-Out (LIFO), and Average Cost Basis. After selecting a cost basis method, the tool will determine your gains and losses based on the chosen method.
Please note that the Binance Tax tool is subject to this Disclaimer.
2. What do the warning labels mean?
When you use Binance Tax, you may see the following error messages in your tax summary.
| Type of Error | Filter Label | Reason for the Error | Description and Solution |
| The system cannot categorize the âreceiveâ transaction | Uncategorized receive transaction | This error occurs when a âreceiveâ transaction does not have a label | This transaction cannot be categorized. It will be treated as a âgiftâ in your tax calculations. Please note that this may impact your tax calculations. You may manually edit the transaction label to another category. |
| The system cannot categorize the âsendâ transaction | Uncategorized send transaction | This error occurs when a âsendâ transaction doesnât have a label | This transaction will be treated as an off-chain transfer to yourself in your tax calculations. You may manually edit the transaction label to another category. |
| The purchase history for <Amount> <Token> is missing and may affect your tax calculations | Missing purchase history for âcurrency amountâ âcurrency nameâ e.g., Missing purchase history for 3 ETH | This error occurs when there is no incoming transaction for a cryptocurrency | The cost basis for this transaction will be set to fair market value (FMV) at the time of sale. Please note that this may impact capital gains. You may manually add an incoming transaction for the missing amount. |
| The currency conversion rate is missing | Missing currency conversion rate | This error occurs when Binance canât fetch the conversion rate of crypto at a specific time | The conversion rate for this transaction is missing and has been set to 0. You may manually edit the incoming amount for this transaction. |
3. How many transactions does Binance Tax currently support?
Currently, Binance Tax supports up to 100,000 transactions on the Binance platform. In the future, you will be able to import transactions from other wallets and blockchains into Binance Tax.
4. How many reports can a user generate?
There is no limit on the number of reports you can generate. Currently, you can generate a Capital Gain Report, Income Gain Report, or a report of all their transactions in the 2022 tax year. If you edit or manually add a new transaction, you can request a new report anytime, as your tax liability may be recalculated.
To learn more about crypto tax calculation, check out this Academy article.
5. What is the use of Capital Gains and Income Gains Reports?
The Capital Gains report summarizes all your trades and transactions on Binance during the reporting year that generate a capital gain or loss, such as converting your crypto to fiat currency. Please note that Binance Tax currently does not support transactions related to certain Binance products, such as Futures and NFTs. You can add these transactions manually or take them up elsewhere on your tax return.
The Income Gains Report summarizes all transactions during the reporting year that increase or decrease your income, such as airdrops, staking, mining, etc.