Understanding your tax obligations when investing in cryptocurrency can be overwhelming—especially in regions like Taiwan, where regulations are still evolving. If you’ve earned profits from digital assets, the question isn’t if you should report them, but how to accurately calculate what you owe without making costly mistakes.
Fortunately, there’s a powerful, free tool that can help: the Binance Tax Calculator. While not a legally binding document for tax submission, it offers a clear, automated way to estimate your capital gains and income from trading activities on Binance. This guide walks you through how to use it effectively, understand Taiwan’s current tax landscape, and make informed decisions with your crypto earnings.
Understanding Cryptocurrency Taxation in Taiwan
One of the biggest challenges for investors in Taiwan is the lack of clear, official guidance on how cryptocurrency gains are taxed. There's no dedicated crypto tax law yet, which leads to confusion and varying interpretations.
However, here's what we know based on current practices and financial authority guidelines:
- Source of Funds Matters: Whether your crypto profits are considered domestic or foreign income often depends on where the funds originate.
- If you withdraw funds through a Taiwan-based exchange (such as ACE or MAX), those proceeds may be classified as domestic taxable income, subject to comprehensive income tax.
- On the other hand, if you receive profits via international wire transfers (e.g., USD) from offshore exchanges, you may have the opportunity to declare them as overseas investment income.
Domestic vs. Overseas Tax Treatment
Domestic Income (via Local Exchanges)
If your withdrawals go through regulated local platforms, your gains could fall under Taiwan’s standard progressive income tax system:
Taxable Income = Total Income – Deductions (exemptions, special deductions, living expense allowance)
This means your crypto profits would be added to your annual total income and taxed accordingly.
Additionally, frequent trading might attract attention under business tax rules. For example:
- Selling stablecoins (like USDT) regularly could be seen as a commercial activity.
- If monthly turnover exceeds NT$80,000, you may need to register as a business and potentially pay 5% business tax.
Overseas Investment Income
For offshore-sourced gains (e.g., Binance), most experts agree these can be reported under foreign investment income, governed by the Alternative Minimum Tax (AMT) framework:
- Tax-free threshold: Up to NT$6.7 million per year.
- Above NT$6.7 million: The excess is taxed at 20%, unless your regular income tax rate is higher—in which case that applies.
- Mandatory reporting: Any overseas investment income exceeding NT$1 million must be declared annually.
When receiving USD transfers from abroad, use the SWIFT code "268 – Cryptocurrency Investment Gains" during bank reconciliation. This helps establish the nature of the funds and supports your claim during audits.
Note: Final classification always rests with the National Taxation Bureau. Always keep detailed records and consult a tax professional.
How to Use the Binance Tax Calculator
Few users realize Binance offers a built-in tax estimation tool—Binance Tax—located discreetly at the very bottom of the desktop homepage under “Tax.” It’s only accessible via the web version, not the mobile app.
Here’s how to use it in five simple steps:
Step 1: Access and Log In
Visit the Binance Tax page and click “Get Started.” You’ll be prompted to log into your Binance account. Use the account containing the transaction history you want analyzed.
Step 2: Select Jurisdiction and Currency
Choose your tax jurisdiction. Since Taiwan isn’t listed, select "Other Countries." Set your base currency to USD (recommended for consistency), agree to the terms, and proceed to import transactions.
Step 3: Confirm and Wait for Data Sync
After agreeing to the disclaimer, Binance begins syncing all historical trades, staking rewards, C2C transactions, and more. This process typically takes 3–4 hours, after which you’ll receive an email notification.
Step 4: Review Transactions and Adjust Fees
Once imported, review each transaction for accuracy. While core details (date, type, assets) cannot be edited, you can adjust:
- Transaction fees (e.g., convert gas fees to TWD)
- Notes or labels for clarity
This ensures greater precision when estimating net gains.
Step 5: Generate Your Tax Report
Click on "Tax Reports" at the top to view summaries. You can generate three key reports:
- Realized Capital Gains Report
- Income Gains Report (from staking, bonuses, etc.)
- Transaction Report (full activity log)
Each report includes:
- Time period covered (selectable by year)
- Total gains/losses
- Cost basis method (FIFO, LIFO, etc.—adjustable in settings)
Use these figures as a starting point for discussions with your accountant.
👉 Generate accurate cross-exchange tax reports even if you're using multiple platforms beyond Binance.
What to Do After Generating Your Report
The Binance Tax Calculator is an excellent estimation tool, but it has limitations:
- It only covers activity within Binance.
- It doesn't include DeFi protocols, NFT trades on other marketplaces, or wallets like MetaMask.
- It cannot replace official tax filings or professional advice.
Therefore:
- Export your reports.
- Combine data from other exchanges manually or via third-party tools.
- Consult a licensed tax advisor familiar with crypto regulations.
- Maintain thorough records: transaction IDs, timestamps, wallet addresses, and bank statements.
Frequently Asked Questions (FAQ)
Q: Is using the Binance Tax Calculator mandatory?
A: No. It's optional and purely for personal estimation. It does not submit data to any government agency.
Q: Can I use this report for official tax filing in Taiwan?
A: Not directly. While helpful, it lacks official recognition. Always verify with a tax professional before submission.
Q: Does Binance report my activity to Taiwanese authorities?
A: Currently, there's no public agreement between Binance and Taiwan’s tax bureau. However, exchanges may comply with international AML standards if required.
Q: What cost basis method should I use?
A: FIFO (First In, First Out) is commonly accepted unless local rules specify otherwise. Check with your advisor.
Q: Are staking rewards taxable?
A: In many jurisdictions, yes—when received. Taiwan hasn’t clarified this yet, but treating them as income is prudent.
Q: Can I calculate taxes for multiple years?
A: Yes. The tool allows you to switch between years (e.g., 2023, 2022) easily in the report settings.
Remember: While tools like Binance Tax simplify tracking, they’re just one piece of the puzzle. As regulations evolve globally, staying proactive about compliance protects both your assets and peace of mind.