Cryptocurrency exchange Binance announced the launch of “Binance Tax,” a tool to help its users calculate their tax obligations on crypto transactions. The launch comes as many governments worldwide have increased their scrutiny over crypto transactions to ensure individuals do not evade their financial duties.
Binance announced on Monday the launch of a new tax tool that allows users to calculate the tax associated with crypto trading activities. Binance Tax can support up to 100,000 transactions and allow users to download a tax summary report of gains and losses using the Binance platform. The information includes spot trades, crypto donations, and blockchain-based fork rewards, but not futures trading and NFTs.
Binance Tax is Currently Only Available to Users in France and Canada
The newly launched tool is in its pilot phase and is only available to users in France and Canada, but Binance said it would extend the initiative to other global markets in the Binance ecosystem later in the year. The beta version of Binance Tax, as it stands, cannot integrate with other platforms or wallets. The exchange said it plans to develop such integrations and assesses which integrations and improvements “would be beneficial in the future for this product.”
Binance Tax Becomes Crucial as Governments Clamps Down on Revenue Collection
Binance tax could not have come soon enough as governments are honing in on crypto transactions to ensure they do not lose out on any possible revenue. In December, Italy introduced a capital gains tax regime on cryptocurrencies, imposing a 26% capital gains tax on crypto profits. The new law, which took effect on January 1, 2023, also requires crypto holders to disclose their current holdings and pay a 14% tax on any such holdings.
Similarly, Portugal, which was regarded as a crypto tax haven for a long time, announced in its 2023 budget proposal a 28% tax on cryptocurrencies held for less than a year. In addition, the budget also detailed a 4% taxation fee on free transfers of cryptocurrencies in instances of inheritance. Further, policymakers suggested imposing a 10% tax on free cryptocurrency transactions, including airdrops. Notably, India introduced the most brutal crypto tax regime by levying a 30% capital gains tax on cryptocurrencies. Additionally, citizens must pay a 1% tax deducted at source on every transaction.
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Source: https://cryptodaily.co.uk/2023/02/binance-launches-a-crypto-tax-reporting-tool