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Crypto taxes on Ethereum: You’re in the right place
Filing cryptocurrency taxes can feel overwhelming. The rules are confusing, and official guidance often does not answer all the important questions.
Meanwhile, the Tax Office is gaining more and more access to blockchain data and to information from crypto services that run on or connect to Ethereum. A growing number of exchanges, brokers, and wallet providers are now required to share details about your transactions.
That’s exactly why Divly exists. We created a tool that guides you step by step through filing your taxes in full compliance with local regulations, without the stress or uncertainty. In this guide, we’ll show you exactly how to report your transactions made on Ethereum.
What is Ethereum
Ethereum is a blockchain network introduced in 2015, known for its smart contract functionality, which allows users to create decentralized applications. It's the platform behind Ether (ETH), the second-largest cryptocurrency by market capitalization.
Following the significant upgrade to Ethereum 2.0, which transitioned its consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS), the network has become more energy-efficient, cutting its energy usage by 99%
For those navigating the implications of Ethereum's innovations on tax obligations, our guide offers comprehensive insights into Ethereum taxes, ensuring compliance and optimization.
How are my Ethereum transactions taxed?
Based on your country's tax laws many transactions made via the Ethereum blockchain could be taxable. This includes, staking Ethereum; trading Ethereum for other currencies, tokens and nfts; providing liquidity; earning interest through DeFi platforms; and participating in yield farming.
These activities might generate taxable events such as capital gains or income, depending on your country's approach to crypto assets.
It's important to maintain detailed records of all your transactions, including dates, amounts in both crypto and fiat currencies, and the purpose of each transaction. This documentation is crucial for accurately reporting your taxes and minimizing potential liabilities.
A lot is possible with Ethereum, to see exactly which transactions are taxed in your country please see our country specific tax guides. Each guide covers how cryptocurrencies are taxed in the country as well as how to declare them to your local tax authority.
A few of our tax guides are linked here below.
| Country | How to Declare Crypto Taxes Guide |
|---|---|
| 🇺🇸 | US Crypto Tax Guide |
| 🇸🇪 | Sweden Crypto Tax Guide |
| 🇫🇮 | Finland Crypto Tax Guide |
| 🇩🇰 | Denmark Crypto Tax Guide |
| 🇳🇴 | Norway Crypto Tax Guide |
| 🇪🇪 | Estonia Crypto Tax Guide |
| 🇩🇪 | Germany Crypto Tax Guide |
| 🇬🇧 | UK Crypto Tax Guide |
How do I calculate my cryptocurrency taxes?
There are multiple ways to calculate your Ethereum taxes. You can either do so manually if you're handy with a spreadsheet, hire a specialized crypto account, or can do so with the aid of crypto tax software.
Regardless of your choice there are three main steps to calculating your cryptocurrency taxes.
Step 1: How to export your Ethereum transaction history
If you're declaring your Ethereum taxes the first thing you should do is access your Ethereum transaction history.
I've used an Ethereum Wallet
If you've used an Ethereum cryptocurrency wallet then all of your transactions are already publically stored on the blockchain. To use this information for your taxes all that is needed is your wallet address. If you're using a tax tool, such as Divly, then you can import your wallet address to retrieve your transaction history.
I have Ethereum on an exchange
If you own Ethereum on an exchange then you can retrieve your transaction history directly from them. Not every file provided by an exchange is relevant for your taxes, so we suggest reading our exchange specific guides to make sure you get the correct transaction history files.
Automatic import
Divly has built an integration that lets you automatically import your Ethereum transaction data directly from the Ethereum blockchain. Divly's integration uses your public Ethereum Address to fetch all transactions. Divly will never ask for your private keys, remember to always keep them secret!
- Copy and paste your Ethereum Address into Divly.
- Select the blockchain Ethereum (ETH) from the dropdown.
- Click the button Save Wallet Address and Import. Divly will import your transactions and calculate your taxes.
Step 2: Calculate Your Cryptocurrency Taxes
Once you have your transaction history you can use it to calculate your taxes. If you've used a cryptocurrency tax platform such as Divly, then this step will be automatically done for you.
If you're manually calculating your taxes then the first thing you should do is familarize yourself with your country's tax laws to ensure that you're treating every transaction correctly.
Step 3: Declare Your Cryptocurrency Taxes
Each country has it's unique reporting requirements. This means that the process to declare as well as exactly what you need to declare can vary greatly between countries. Our tax guides also cover how to navigate your tax declaration for your country.
If you've used Divly for your taxes, then you can also benefit from Divly's tax reports which help you navigate your cryptocurrency declaration in your declaration country.
Why is Divly the best choice for Ethereum taxes?
Divly is built specifically for each country with a focus on accuracy. Unlike generic tools, we automatically generate the compliant, localized tax report you need for your country. We handle all the complex local rules of your local tax legislation so you don't have to.
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Fast Import: Fast import of Ethereum transactions from your wallet address that combines with your other wallets and exchanges.
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Accurate Calculations: Accurate calculation of your taxes with gains/losses and the right cost method (e.g. FIFO), including common on-chain activity such as swaps and staking rewards.
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Local Tax Report: Simple download of a local tax report with a step-by-step guide on how to declare in your country.
Frequently asked questions (FAQ?)
Yes, in most countries you are required to pay taxes on crypto. For more details see your country-specific crypto tax guide.
Crypto typically incurs a capital gains tax in the majority of jurisdictions. This means you need to pay taxes on the difference between what you bought crypto for and what you sold it for (minus fees).
If you received crypto through other methods (e.g. salary), methods like income tax will apply.
Yes, you can use Divly to declare crypto taxes for previous years that you missed. In many countries you can self-report mistakes and not get penalized for it.
Divly provides localized guides on how to fix previous years for many of our supported countries.
It is a criminal offense to not pay your taxes. It is also difficult to avoid since crypto transactions are recorded publicly on the blockchain and exchanges have been forced to hand over information to local tax authorities.
Yes, you need to file a tax report even if you lost money. The good news is that by filing your losses you may be able to reduce your taxes.
Divly is a premium service to help people calculate and submit their crypto taxes. We use industry standard practices to secure your data.
- We do not sell your information to third parties such as other companies or government agencies.
- We do not perform any KYC. Divly only requires an email address and your pseudonymous crypto transactions to generate your taxes.
Feel free to use a temporary email / protonmail. You can also delete all your transactions and synched wallets at any time.
Yes. You can safely ask your accountant to create and manage a new Divly account for you, or invite them to see and/or edit your existing Divly account. Divly provides accountants with a special feature to manage multiple clients with crypto.
Any tax-related information provided by us is not tax advice, financial advice, accounting advice, or legal advice and cannot be used by you or any other party for the purpose of avoiding tax penalties. You should seek the advice of a tax professional regarding your particular circumstances. We make no claims, promises, or warranties about the accuracy of the information provided herein. Everything included herein is our opinion and not a statement of fact. This article may contain affiliate links.
