Why Crypto Taxes Are No Longer Optional but a Necessity

In 2025, the tax burden on the crypto industry will become undeniable for everyone, from garage miners to primary DeFi founders. The illusion of cryptocurrencies existing in a "grey zone" is gone: regulators worldwide are implementing tools to track transactions, demanding reports from exchanges, and actively imposing back taxes on investors.

The reasons are clear:

• Exchanges now share transaction data with tax authorities.

• Income from trading, mining, and staking is classified as taxable.

• In some countries, tax evasion can result not only in fines but also in criminal liability.

If you trade, stake, farm, or hold assets, you need to understand how tax authorities classify these actions and how to declare them properly.

What Counts as a Taxable Event

The tax base is formed based on so-called "taxable events." Key examples include:

• Selling for Fiat. You earned $5,000 by selling BTC—you must pay tax on the profit.

• Crypto-to-crypto trades. Even without a fiat, this is considered a sale and purchase.

• Mining. Treated as income from an activity.

• Staking/farming. Rewards are taxable income.

Tax rates vary by jurisdiction. For instance, in Germany, holding assets for over a year exempts you from taxes, while in Japan, a progressive tax scale can reach up to 55%. In the U.S., any profit is taxable, and a new form, 1099-DA, was introduced in 2024. Meanwhile, the UAE currently does not impose taxes on cryptocurrencies.

Common Mistakes by Crypto Investors

Even experienced market participants make tax-related errors. The most common include:

• Ignoring small transactions. Any transaction can be included in a report.

• Incorrect accounting of fees and expenses. This leads to overstated profits.

• Missing declaration deadlines. Often penalised with fines.

• Mixing income types. Trading, mining, and staking are taxed differently.

• Losing transaction data. Without a transaction history, it’s impossible to prove costs or purchase prices.

These mistakes can result in fines or unfavourable tax recalculations.

How to Keep Records and Calculate Taxes Correctly

Key practices:

• Record the exchange rate at the time of each transaction.

• Save exchange reports and receipts from crypto exchanges.

• Account for fees and transaction costs—they reduce the taxable base.

• Uses specialised tax calculation and accounting services:

  • CoinTracking. Flexible analytics and reporting.

  • Koinly. User-friendly interface and support for multiple countries.

  • Accounting. Portfolio analytics and declaration exports.

These tools can import data from exchanges or CSV files, automatically calculate taxes, and generate reports. For large portfolios, paid versions are often worthwhile.

When to Consult a Professional

Seek expert help if:

• You have numerous transactions across multiple exchanges.

• You actively trade in DeFi or participate in IDOs.

• You deal with international transfers or complex derivatives.

• You’ve made reporting errors in the past.

Paying for a professional consultation is often more cost-effective than facing fines or legal fees later.

Conclusion: The Rules Are Changing

In 2025, tax authorities view digital assets as a full-fledged asset class, scrutinising them more closely than bank accounts. Delaying declarations is no longer an option.

To minimise risks:

✅ Gather documents in advance.

✅ Keep records of all transactions.

✅ Calculate taxes honestly, accounting for exchange rates, fees, and holding periods.

✅ Don’t hesitate to consult specialists.

The market is maturing, and investors must mature with it. Cryptocurrency taxes are no longer an abstract concept but a critical part of a professional capital management strategy.