Cryptocurrency Tax 101: Your Primer for Tax Season

Zug, Switzerland. - October 12th, 2022. No matter where you’re located, reporting your crypto taxes can sometimes feel like a nightmare.  Cryptocurrency’s unique properties make it difficult for investors to keep track of capital gains, losses, and income—especially when using multiple wallets and exchanges. In this guide, we’ll break down how cryptocurrency is taxed, how crypto tax software can help you save hours of time and effort during tax season, and the reason why more than 300,000 investors around the world choose CoinLedger.  How is cryptocurrency taxed?  In most countries, cryptocurrency is subject to capital gains and income tax.  Capital gains tax: When you dispose of cryptocurrency, you’ll incur a capital gain or loss depending on how its price has changed since you originally received it. Examples of disposals typically include selling your crypto or trading it for another crypto.  Ordinary income tax: When you earn cryptocurrency, you’ll recognize income based on the fair market value of your crypto at the time of receipt. Examples of income typically include staking and referral rewards.  Let’s quickly walk through the tax implications of cryptocurrency in a few different European countries.  United Kingdom  In the United Kingdom, capital gains above £12,300 are taxed between 10-20% depending on your income level. Your income from earned cryptocurrency will be taxed between 0-45%.  Read more about cryptocurrency taxes in the United Kingdom.  Switzerland  At this time, capital gains from selling or exchanging your cryptocurrency are not subject to income tax for those considered ‘private investors’ in Switzerland. Instead, Switzerland has a wealth tax, which is calculated based on the total value of assets (including cryptocurrency) held at the end of the year. You are determined to be a ‘private investor’ based on five criteria, including your holding period, your crypto profits relative to your net income, your trading volume relative to your portfolio, whether you traded cryptocurrency on margin, and your derivative and futures trading activity.  Regardless of whether or not you’re considered a private investor, you will be subject to income tax on earned cryptocurrency. Income tax from federal, state, and municipal tax combined can be as high as 36% in Switzerland.  Germany  In Germany, cryptocurrency income and short-term capital gains above €600 are subject to tax between 0-45%. Disposing of your cryptocurrency after 12 months of holding is considered tax-free.  Read more about cryptocurrency taxes in Germany.  Spain  In Spain, cryptocurrency disposals are subject to tax between 19-26%. How much your crypto income is taxed varies depending on where you live in Spain. Income tax rates are set by the state and individual autonomous communities.  In addition, your crypto holdings may be subject to wealth tax depending on your total net worth.  Ireland  In Ireland, capital gains are subject to a standard tax of 33%. Crypto income is taxed between 20-40% depending on your income level.  Read more about cryptocurrency taxes in Ireland.  Why do I need crypto tax software? Investors often transfer their crypto-assets between different wallets and exchanges, making calculating capital gains and losses difficult.  Let’s take a look at an example.  Hans buys €1,000 of ETH on Exchange A.  Hans transfers his ETH to his cold wallet.  Years later, Hans transfers his ETH to Exchange B and sells it for €1,800.  In this case, Hans’s capital gain should be €800.  However, Exchange B has no record of Hans’s original cost basis. All the exchange knows is that he sold his ETH for €1,800. Unless Hans has kept records of his crypto transactions, he may be liable for €1,800 of capital gain.  It’s important to remember that the example above is heavily simplified. Often, investors interact with multiple exchanges, wallets, and decentralized protocols in a year, making tax reporting even more difficult.  Luckily, crypto tax software can help. Platforms like CoinLedger can aggregate your transactions and help you generate a comprehensive crypto tax report. Whether you’re using a wallet like MetaMask or an exchange like Lykke, the platform can pull your transactions in minutes!  Why is CoinLedger the best crypto tax platform?  While there are several options on the market for crypto tax platforms, there’s a reason why more than 300,000 investors across the globe choose CoinLedger.  User-friendly CoinLedger is the most user-friendly crypto tax software on the market. That’s part of the reason why the platform is rated 4.8 stars with more than 500 reviews on Trustpilot.  Affordability  CoinLedger is the most affordable crypto tax platform. You can get started importing your wallets and exchanges for free! The cheapest tax report is just €44.  World-class support  No matter what pricing tier you’re in, you can reach out to CoinLedger’s support team if you need help!  But don’t take our word for it! Get started with a free CoinLedger account and see for yourself why investors around the world love the platform. 

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Lykke and Koinly Integration: How To Do Your 2022 Crypto Taxes 

Zug, Switzerland. - September 27, 2022. Your 2021 taxes are not done yet? Or are you slowly starting to collect data and getting ready for your 2022 tax reporting? We are pleased to announce that Koinly supports Lykke and makes tax reporting a piece of cake.  As announced to our active users approximately a month ago, Lykke .csv transaction history files can be easily uploaded to Koinly.  How to Export Transaction History from Lykke To get your CSV file with all the executed trades, you need to login into your Lykke Wallet. (Please note that this CSV file is not covering the trades done via API. Lykke is currently exploring what would be the most efficient way to help our API traders with the taxes.) After successful login, you get your CSV file in three easy steps: 1. click on ‘FUNDS’ in the top menu, 2. select ‘HISTORY’, and 3. click on ‘EXPORT TO CSV’ button in the top right corner.  Once you are done, you can easily upload the Lykke .csv file into the Koinly interface. The instructions are available here. The whole process should not take more than 2 minutes of your time. What Else Can You Do with Koinly?  Koinly offers a visual dashboard of your transactions history, including ROI (Return on Investment) for every single transaction. These functionalities are free of charge. When testing, we were very pleased with all the functionalities Koinly has to offer and how useful they can be to monitor your trading profits (or losses). In addition to the above, Koinly is also active in terms of crypto taxes awareness and understanding. It has published numerous guides on how to do your taxes in various countries. These guides are updated regularly. To mention few of them, check the 2022 Cryptocurrency Tax Guides for Switzerland, Germany, France, Netherlands, Denmark, Ireland and the UK.  About Koinly  Koinly is a leading global crypto tax platform managed by tax experts. It supports 700+ exchanges, wallets, and blockchains and consolidates all your transactions to calculate your taxes. Koinly offers a variety of plans, whether you’re a newbie, hodler, or active trader.  About Lykke Lykke Exchange is a cryptocurrency trading platform which does not charge any trading fees, deposit, or withdrawal fees on wire transfers. The Lykke platform can be acessed through a web-terminal, and on iOS, Android, and Huawei. 20+ selected cryptocurrencies and several fiat pairs (CHF, EUR, GBP, USD, etc.) are available for trading at zero transaction fees at Lykke.

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Lykke’s financial statements and income for the year 2020

We are happy to share with you an independent audit of Lykke’s financial statements and income for the year 2020. The report has been conducted by the respected firm of Grant Thornton. Please click here to download the report.Thank you for being with Lykke. We value your participation.

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Lykke Wallet Lists Compound for Trading with No Fees

Zug, Switzerland. - August 1st, 2022. Lykke is thrilled to announce that we have listed Compound (COMP) on our crypto exchange! From now on, you can deposit, trade, and withdraw COMP using the following trading pairs: COMP/EUR COMP/USD COMP/CHF COMP/GBP COMP/BTC COMP/ETH COMP/USDT …with no fees at all!  Compound - Short Overview  Compound is the superstar of DeFi applications. This Ethereum-based protocol is mainly focused on lending and borrowing cryptocurrencies. Lending and borrowing in the DeFi space eliminate the need for third-party intermediaries (read: banks), while anyone can lend their money and earn interest or borrow crypto without having to perform any credit checks.  Both lenders and borrowers are supposed to lock their cryptos in one of the Compound’s liquidity pools. Fun fact: from the moment it was put before the public back in 2017 to this day, more than $8.9 million were locked in the Compound ecosystem.  However, borrowers are obliged to lock in more than they want to borrow while lenders are rewarded with annual interest rates that can fluctuate. Either way, both lenders and borrowers are being given a certain amount of COMP tokens we’re going to talk about more in a bit! Compound is immensely popular among the DeFi world enthusiasts who believe that traditional finance doesn’t provide equal opportunities for everyone while decentralized finance does.  More About COMP COMP is the backbone of the Compound ecosystem that is entirely self-governed. Every day, as soon as new Ethereum blocks are mined, a certain amount of COMP tokens is distributed to all lenders and borrowers. COMP holders are given exclusive benefits and voting rights that can be delegated to other holders. At the time of writing, COMP is traded at $48,67. In 2021, COMP touched $854, yet, its price flopped significantly shortly after because of the unfavourable market conditions. COMP has a limited supply of 10,000,000 tokens while more than 7 million tokens are circulating in the market.   How to Trade COMP With 0 Fees Trading COMP is a breeze with Lykke, the zero-fee crypto exchange. To acquire COMP, all you have to do is to register, pass the KYC verification procedure, deposit your funds, and exchange fiat to COMP. Simple as that! About Lykke Lykke is a crypto platform that makes it possible to buy, store, and trade cryptocurrencies with no bother, no matter whether you are a newbie or a well-versed trader. The best thing of all? You can make multiple trades a day and still pay 0 fees. This zero fee policy actually helps you, traders, make greater profits. Available in 100+ countries worldwide, Lykke makes it easy to trade crypto no matter where you are, and even on the go, by using our intuitive mobile app. Lykke puts security first and it is compliant with KYC and AML policies, which contributes to providing a safe trading environment for everyone.  Sign up today and get your share of COMP (or any other desired token) with the best zero-fee crypto exchange out there! 

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Lykke Wallet Lists DAI for Trading Without Fees

Zug, Switzerland. -  August 1st, 2022. Starting from today, Lykke Wallet’s users can get their share of DAI, the stablecoin that has been in the spotlight for a few months now, without paying any fees! You can now deposit, trade, and withdraw DAI on the Lykke exchange using the following 22 pairs: ADA/DAI AVAX/DAI BCH/DAI BNB/DAI BTC/DAI DOGE/DAI DOT/DAI EOS/DAI ETH/DAI KSM/DAI LINK/DAI LTC/DAI MATIC/DAI UNI/DAI XLM/DAI XRP/DAI XTZ/DAI DAI/CHF DAI/EUR DAI/GBP DAI/USD DAI/USDT A Word or Two About MakerDAO MakerDAO is a DeFi lending platform launched on Ethereum and known for its utility token – MKR, and its stablecoin – DAI. MKR is a governance token that, as assumed, gives holders voting rights. MKR holders decide on the platform’s liquidity ratio and DAI savings rate, while MKR can be used for paying fees as well.  DAI, on the other hand, simplifies lending and borrowing and makes it easy to predict the amount that should be repaid. Locking up a portion of Ethereum in MakerDAO’s smart contract makes it possible to mint DAI. By paying off the loan, you can unlock your ETH.  More About DAI  DAI, as well as other stablecoins (coins whose value is pegged to the US dollar), protect crypto traders from frequent price fluctuations. Yet, compared to these other stablecoins, such as Tether, DAI is entirely decentralized, which means that no centralized organization (bank or another institution) can take control over it. Also, it is backed by a plethora of crypto assets such as Wrapped Bitcoin and Ethereum, unlike USDT and USDC.  DAI token, which has an unlimited supply, is entirely managed via DAO (decentralized autonomous organization) that controls its savings rate and stability fee. You can use it to make payments, transfer it, as leverage, and for earning interest by locking in your share of tokens in the DAI Savings Rate contract.  Not so long ago, right before Terra’s UST downfall, DAI was the second most popular stablecoin. However, the collapse of UST brought DAI back to the top. The interest in it rose dramatically, and investors started stacking up DAI. If you want to stack up some as well, make sure to register with Lykke today and enjoy no-fee trading.  How to Trade DAI With Zero Fees Lykke exchange now supports trading DAI with no fees. You can buy a portion of tokens as soon as you register yourself as a user, pass the KYC procedure, and deposit the desired amount of fiat money. By the way, Lykke charges 0 fees on crypto deposits, just in case this method works better for you. About Lykke  Based in Switzerland, Lykke is among a few crypto exchanges that charge 0 fees. In other words, you can buy, store, and trade crypto with us without paying abnormally high fees and ending up ripped off. Lykke gives you access to dozens of cryptocurrencies, is available worldwide, and has both web and mobile apps so you can do trades from wherever you want! Create an account today and enjoy a seamless crypto experience with our zero-fee exchange! 

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Lykke and CryptoTaxCalculator Integration: Crypto taxes at a discounted rate

Zug, Switzerland. – June 13th, 2022. Lykke, a Swiss-based commission-free cryptocurrency exchange and CryptoTaxCalculator, a tool to help identify, track and organize all your crypto activity across hundreds of exchanges and blockchains with ease, announce their partnership and the integration of the two platforms. The integration will allow cryptocurrency traders to generate a tax report by using CryptoTaxCalculator for their transactions on the Lykke Wallet cryptocurrency exchange. This partnership makes the life of Lykke users again easier.  Lykke users will receive a special discount for CryptoTaxCalculator. To apply the discount, the user will add the code during checkout and receives 30% off in the first year with CryptoTaxCalculator. This offer is only valid for a limited time. The plan allows Lykke users to sort out their crypto taxes without using Excel. To connect their Lykke account to the CryptoTaxCalculator the user needs to register. Additional instructions are available here. “We are delighted to announce the partnership with CryptoTaxCalculator and offer our users to benefit from the intuitive interface and the visually configurable tax reports of the CryptoTaxCalculator. As the crypto tax regulation evolves, our active users need to comply with the tax laws. The integration of the CryptoTaxCalculator with the zero-fee cryptocurrency exchange Lykke aims to address exactly this.” - Richard Olsen,CEO and founder of Lykke. “At CryptoTaxCalculator, we’re working on making crypto users’ lives easier, no matter where they are in the world - which is why this partnership with Lykke made perfect sense. We’re excited to work together to make crypto tax compliance more accessible for their multitude of users.” - Shane Brunette, CEO and co-founder of CryptoTaxCalculator. About Lykke Lykke is an umbrella term for a group of entities that offer blockchain-powered solutions on a B2B and a B2P level. Lykke runs a proprietary cryptocurrency trading platform Lykke Wallet exchange. Lykke Wallet is a commission-free exchange which offers zero trading fees both to retail and high-frequency, or algorithmic, traders. Lykke has been on the market since 2015, and it has gained a reputation as a fully-functional, transparent and reliable cryptocurrency trading platform with highly cost-effective trading conditions. Lykke not only offers cryptocurrency trading without fees but also maintains low buy-sell spreads on all crypto and fiat trading pairs. There are some 20 selected cryptocurrencies, and the list is growing. To start trading, download the app or get registered on our website! About CryptoTaxCalculator CryptoTaxCalculator is building the platform to make understanding your tax obligations simple and straightforward. Their tools help identify, track and organize all your crypto activity across hundreds of exchanges and blockchains with ease and accuracy.

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