No matter where you are in the world, trying to report your cryptocurrency transactions on Binance and other exchanges can be a nightmare.
It’s difficult to keep track of your cryptocurrency gains, losses, and income — especially if you’ve transferred your crypto between different wallets and exchanges.
In this guide, we’ll break down everything you need to know about how Binance transactions are taxed. We’ll also share a simple process to help you report your Binance taxes in minutes.
Originally founded in 2017 by Changpeng Zhao, Binance is one of the largest and most popular exchanges in the world. Currently, the exchange offers investors access to buy, sell, and trade more than 600 cryptocurrencies.
Binance currently does not operate in the United States. The company serves its American customers through its subsidiary Binance.US.
For more information on Binance US, check out our complete guide to Binance.US taxes.
In most countries, cryptocurrency is subject to capital gains and income tax.
Capital gains tax: When you dispose of cryptocurrency, you’ll incur a capital gain or loss depending on how the price of your crypto changed since you originally received it. Examples typically include selling your cryptocurrency or trading your cryptocurrency for another cryptocurrency.
Income tax: When you earn cryptocurrency, you’ll recognise income based on the fair market value of your crypto at the time of receipt. Examples include earning staking or referral rewards.
For more information, check out our complete guide to cryptocurrency taxes.
Because Binance does not currently operate in the United States, it’s unlikely that the exchange reports to the IRS.
It’s likely that Binance provides tax reporting information to tax authorities in the countries in which it operates.
In 2021, Binance implemented Know Your Customer (KYC) requirements for all customers.
It’s likely that this decision was made partly due to the increasing scrutiny on cryptocurrency exchanges by governments around the world. Now, Binance can provide customer information to tax agencies upon request.
Because investors often transfer their cryptocurrency between different wallets and exchanges, exchanges have trouble tracking capital gains and losses.
Luckily, there’s an easier way to keep track of your cryptocurrency taxes. Crypto tax software like CoinLedger helps investors around the world file their taxes in minutes.
With CoinLedger, you can generate a cryptocurrency tax report in minutes.
CoinLedger allows you to upload transactions from Binance, the Binance Smart Chain, and other exchanges and blockchains!
Want to generate a crypto tax report today? CoinLedger can help.
More than 300,000 investors around the world use CoinLedger to save hours of time and effort and take the stress out of tax season.