Tax bills for Binance: The basics of Binance taxes

Trading on Binance? You’re not alone – over 200 million users rely on the world’s largest crypto exchange for access to altcoins, low fees, and high-volume markets (as of this writing).

Given the scale of Binance’s operations and the complexity of crypto tax rules, it’s no surprise many traders have questions about Binance taxes. How much does Binance share with tax authorities? How are Binance trades taxed? What’s the difference between Binance’s global platform and Binance.US when it comes to tax reporting in the United States?

In this guide, we’ll explain how Binance tax reports work and what transaction details you’ll need when it’s time to file.

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Are Binance transactions taxable? 

Tax rules can vary significantly from country to country, so every Binance user should check the tax laws and regulations applicable to crypto assets in their jurisdiction to understand their specific obligations. That said, governments typically tax cryptocurrencies in one of two instances:

• If you sell or otherwise dispose of cryptocurrency for another asset at a profit, you're generally liable for capital gains taxes.
• If you receive cryptocurrency rewards or income on platforms like Binance, you must report these rewards as income.

These crypto tax policies may apply to Binance in a few specific circumstances:

Selling crypto for fiat

Whenever you cash out of a crypto position into a fiat currency like the U.S. dollar, you must report the total capital gain (profit) or loss. The taxable amount depends on the difference between the amount realized on the sale and the asset’s cost basis (its acquisition price). If the position is profitable, you’ll owe capital gains taxes based on your income bracket and how long you held the asset. If the sale resulted in a loss, you can generally use the loss to offset other capital gains. If you have losses in excess of gains, you may be able to claim a tax deduction or carry it forward, depending on the jurisdiction’s tax laws.

Trading crypto to crypto

Generally, swapping one cryptocurrency for another on Binance is the same as selling for fiat when it comes to capital gains or losses. Taxpayers calculate their gains and losses based on the difference between the amount realized from the disposition of the cryptocurrency relative to its cost basis. However, some countries (like Austria, France, and Italy) do not tax crypto-to-crypto exchanges. Most jurisdictions that impose capital gains taxes treat these swaps as taxable events, so it’s essential to confirm with local guidance.

Staking rewards, interest, or airdrops

Binance offers users in select countries several ways to earn passive income, such as staking or airdrops. Keep in mind that the value of these rewards is often taxed as income, in which case this amount becomes your cost basis for calculating capital gains or losses upon disposition of the assets.

Spending crypto for goods and services

If you use crypto from your Binance account to purchase goods or services, you’ll need to calculate the capital gain or loss for each transaction. Many tax authorities determine this based on the FMV of the crypto at the time of spending minus your original cost basis.

Holding crypto in countries with wealth taxes

In some jurisdictions, such as the Netherlands or Switzerland, holding crypto may trigger wealth tax obligations, even if no transaction occurs. These taxes are typically based on the portfolio’s fair market value at year-end.

Does Binance report to the IRS? How Binance taxation works

Binance originally served U.S. users through its global platform, Binance.com, but in 2019, the company launched Binance.US as a separate entity designed to comply with U.S. regulations following concerns raised by American regulators.

Unlike the global Binance.com platform, Binance.US complies with American laws, including transparency requirements for tax authorities like the IRS. Currently, if U.S. taxpayers receive $600 or more in income-type transactions (such as staking rewards or referral bonuses) on Binance.US, Binance does send a 1099-MISC. In line with new legislation, Binance.US will begin sending Form 1099-DA starting in 2026 for the 2025 tax year. This form will report gross proceeds from digital asset sales. Taxpayers will still need to calculate their own cost basis and capital gains.

Outside the U.S., Binance may share transaction details with authorities and issue tax documents depending on local laws and the exchange’s relationship with regulators. Following the broad acceptance of the Organisation for Economic Co-operation and Development’s (OECD’s) Crypto-Asset Reporting Framework (CARF), exchanges like Binance will need to share transaction data with relevant authorities in participating countries. CARF is expected to take effect in most jurisdictions in 2027.

How to track and report Binance taxes

Until regulations require Binance to share transaction details with clients through policies like the CARF or Form 1099-DA, it's each user's responsibility to access their transaction data and report on their income tax return. To help with this, Binance offers a dedicated tax portal where users can generate API keys to connect with crypto tax software like CoinTracker or manually download their yearly transactions.

Generate API keys on Binance

To create API keys from a Binance account, select “API Management” under your username icon in the top right-hand corner of the homepage. From here, you can create a label to remember the purpose of the key (e.g., "CoinTracker taxes"). After passing security steps like two-factor authentication (2FA), your API key, secret code, and QR code will appear on the screen. Copy and paste this information into CoinTracker to automatically link your Binance account and populate your transaction history.

By using API keys, you allow third-party tools to pull your complete transaction history from Binance in real time. Keep in mind that some transfers aren’t taxable – like sending crypto to a self-custodial wallet or donating to a registered charity. Tools like CoinTracker can help distinguish between taxable and non-taxable events by connecting to your Binance account, other exchanges, wallets, and decentralized applications (dApps) you use. CoinTracker can also compile this data into compliant crypto tax forms for easier reporting.

Access tax files manually 

For users who prefer not to use API keys, Binance offers a proprietary tax portal at binance.com/en/tax or binance.us/tax, depending on your location. These sites allow you to link your Binance transaction history and generate tax forms based on your jurisdiction and the selected tax year. While Binance automatically estimates gains and losses, you can manually adjust the data – for instance, correcting a transaction that was flagged as a sale when it was actually a transfer to a self-custodial wallet.

How to reduce your Binance taxes

Paying taxes on crypto gains isn’t exactly enjoyable, but with the right approach, you might be able to reduce what you owe. While there’s no way around paying capital gains or income tax on certain Binance transactions, there are strategies that can help.

• Use tax-loss harvesting: Some crypto traders strategically sell digital assets at a loss to offset yearly gains. This tax-loss harvesting strategy takes advantage of annual deductions for capital losses (e.g., up to $3,000 in the U.S.). 
• Hold for the long term: Countries like the U.S. incentivize investors to hold their cryptocurrencies longer rather than trading in and out of positions. To qualify for more favorable capital gains taxes, investors typically need to hold digital assets on Binance or a self-custodial wallet for over one year. 
• Consider cost basis methods: How you calculate gains on Binance can significantly impact your total taxable liability. For example, "First In, First Out" (FIFO) is the default method in the U.S., using the cryptocurrency’s earliest purchase price as the cost basis. FIFO can lead to higher taxable gains if crypto prices increase over time. By contrast, "Last In, First Out" (LIFO) means the most recently purchased assets are sold first, which may result in lower gains if those purchases were made at higher prices. To use a method other than FIFO, such as Specific Identification or LIFO, you must maintain adequate records that clearly identify which lots were sold and when. Keep in mind that allowable cost basis methods vary by country.
• Consider tax-friendly jurisdictions: Since Binance is a global platform, some traders may benefit from using the exchange in countries with more favorable crypto tax laws. In some cases, residents of countries like the United Arab Emirates (UAE) or the Bahamas may be subject to little or no income or capital gains tax on crypto. Other jurisdictions offer preferential treatment for specific types of activity. For instance, Portugal and Germany generally exempt long-term crypto gains from taxation, whereas Austria, France, and Italy typically do not tax crypto-to-crypto swaps. These benefits often depend on factors like residency status, holding periods, transaction types, and local regulations. For U.S. citizens, keep in mind that the U.S. taxes worldwide income regardless of where you live. It’s important to consult with a tax advisor before relocating or relying on foreign tax benefits.

Link exchanges to CoinTracker for easy crypto tax reporting

Whichever crypto exchanges and wallets you use, CoinTracker can take the hassle out of crypto tax reporting. By linking your API keys and importing public wallet addresses into CoinTracker's Portfolio Tracker, you get instant access to a detailed transaction history and real-time monitoring for your entire web3 portfolio. CoinTracker also automatically generates IRS-compliant tax reports like Schedule D and Form 8949 ready to send to a CPA or import to TurboTax or H&R Block. 

Get started with a free CoinTracker account today and experience how simple staying on top of your cryptocurrencies can be.

Disclaimer: This post is informational only and is not intended as tax advice. For tax advice, please consult a tax professional.