New Tax tool launched by Binance for Crypto users
Credits: cryptodaily

New Tax tool launched by Binance for Crypto users

Credits: Bitcoin News

Binance Tax,’ the tool aims to resolve the tax dilemma for the exchange users since it produces a variety of filing formats that the tax authorities often require. This service, which is completely free, enables users to generate well-organized crypto tax reports, which can then be downloaded for tax filing. The new tool will be free for users and will include details specific to the customer’s location to make it easier for people to access their tax information that may need to be included in returns.

“We’re always looking at how we can build products to make our customers’ lives easier and that often means listening and reacting directly to user feedback,” said Mayur Kamat, head of product at Binance. “We heard that our users wanted an easier way to be able to see and understand their taxes, so we’re excited to bring this new, free-to-use tax tool to our community, starting  in France.”

Following the initial pilot in France, Binance will look to launch the tool in other markets around the world later this year. The feature is in the first stages of development and aims to provide a better understanding of transactions from the Binance platform for the purpose of tax liabilities. The current version doesn’t integrate with other platforms or wallets but there will be plans to develop this, looking at which integrations and future improvements would be beneficial in the future for this product.

Binance Launches New Crypto Tax Reporting Tool for Certain Users
Credits: CryptoPotato

“Binance Tax is still in an early launch phase, and as such, its algorithm does not yet cover all the types of transactions within our vast ecosystem. Binance users should adjust accordingly in their final tax report,” the announcement notes.

Binance users can use its advanced tax tool without paying any additional fees. Even the most active members of Binance can use this tool, which enables up to 100,000 reportable transactions. To assist in filing the taxes, Binance Tax offers detailed data on the transactions users carry out, including spot trades, crypto donations, and even incentives for blockchain forks.

Unfortunately, the tool may have been introduced slightly too late for users in many locations; the tax deadline for crypto traders in the UK, for example, was January 31.

U.S. traders will have slightly longer to do their taxes, until April 18, but it’s unclear if Binance’s tool will be available for them to use before then. In terms of paying capital gains taxes, many long-term investors may not have much to declare given the nuclear crypto winter that set in over the last tax year.

Binance says it has worked with professional tax advisers to ensure that the calculation logic complies with available guidance and laws for filing crypto taxes in each supported jurisdiction.

Recently, there have been numerous reports emerging of tax authorities clamping down and going after cryptocurrency traders. The US Internal Revenue Service (IRS) also sent letters to taxpayers who might have failed to report income and pay the resulting tax from cryptocurrency transactions.

Most notably, the authority tweaked the previous instructions to include non-fungible tokens (NFTs) and stablecoins, replacing the term “virtual currency” with “digital assets”.