Hello 👋,
Correctly labelling your withdrawal transactions allows you to justify your cryptocurrencies operations in the eyes of the tax authorities and to ensure that they are properly add in the calculation of capital gains.
The choice of label impacts the calculation of your capital gains or losses. Labelled transactions that are not taxable will not be taken into account in the calculation of your capital gains. Don't use labels if you aren't sure of their different impacts.
Here is a table explaining the withdrawal labels available to Belgian users and their tax consequences:
Withdrawal labels
Withdrawal labels | Impact on your crypto inventory | Taxable transaction |
Hack or loss | ✅ Decrease | ❌ No |
Donation | ✅ Decrease | ❌ No |
Payment | ✅ Decrease | ✅ Yes |
Fees | ✅ Decrease | ❌ No |
Add liquidity | ✅ Decrease | ❌ No |
Other withdrawal | ✅ Decrease | ❌ No |
Transfert between accounts | ✅ Decrease | ❌ No |
Liquidation | ✅ Decrease | ❌ No |
Add staking | ❌ No | ❌ No |
Add collateral | ❌ No | ❌ No |
💡 Here are two examples to understand :
1️⃣ - You make a purchase in cryptocurrency (goods, services...). On the withdrawal transaction, you apply the label "Payment". This withdrawal will decrease the amount of your cryptos in stock and will be a taxable transaction (miscellaneous income at 33%).
2️⃣ - You deposit ETH in staking on a platform. On the withdrawal transaction, you apply the label "Add staking". This withdrawal will not decrease the amount of your cryptos in stock and the transaction will not be taxable.
If you have any further questions, please feel free to contact us via the Chatbot just at the bottom right of your screen! 💬
The Waltio team