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Binance launches a tax calculation tool for crytocurrency traders
Dubbed 'Binance Tax', this new tool aims to solve the tax dilemma for Binance's users, as it produces a variety of reporting formats that tax authorities often want. The service, which is completely free, allows users to generate well-organised cryptocurrency tax reports, which can then be uploaded for tax reporting.
Reporting requirements for cryptocurrencies continue to evolve at a breakneck pace, often lacking clear guidance from regulators.
Users can use Binance Tax to streamline and automate their cryptocurrency tax processes in one centralized location. The software will be piloted in France before being expanded to other markets around the world later this year.
As the adoption of crypto-currencies continues to grow, many jurisdictions around the world have made tax reporting of virtual currencies mandatory. This move highlights how regulators are not only concerned with combating cryptocurrency-related crime, but also with hunting down those who use the digital asset class to hide their wealth or avoid paying taxes.
As such, Binance Tax addresses needs that are evolving as the cryptocurrency landscape continues to grow. Users can access a breakdown of trading activity by logging into their Binance account. Once logged in, users can select 'Capital Gains Made', 'Income Gains' or 'Trades' and this will then generate a downloadable tax report, with a summary of gains or losses.
"We're always looking to create products that make our customers' lives easier and that often means listening and responding directly to user feedback. We heard that our users wanted an easier way to see and understand their taxes, so we're excited to bring this new free tax tool to our community, starting with France," says Mayur Kamat, product manager at Binance.
Binance says it has worked with professional tax advisors to ensure that the calculation logic is in line with the guidance and laws available for crypto-currency tax reporting in each supported jurisdiction.
Recently, there have been numerous reports of tax authorities cracking down on crypto traders. The US Internal Revenue Service (IRS) has also sent letters to taxpayers who may have failed to report income and pay taxes resulting from cryptocurrency transactions.
In particular, the authority amended previous instructions to include non-fungible tokens (NFTs) and stablecoins, replacing the term "virtual currency" with "digital assets".
The IRS said it plans to make criminal tax evasion cases involving cryptocurrencies public, opening a new front in the agency's burgeoning scrutiny of the industry.
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