Frequently asked questions about the TAX Report

At Bit2Me, we are committed to providing you with all the necessary information to declare your cryptocurrency income tax simply and securely. To this end, we offer you the TAX report, which you can download and obtain immediately, with a summary of all your activity. In this article, we aim to answer any questions that may arise so you can interpret the report, thus facilitating its understanding and review:

TABLE OF CONTENTS

• 1. Understanding Bit2Me Tax
  • What is Bit2Me Tax?
  • How can Bit2Me Tax help me?
  • What does the Bit2Me Tax tax report include?
  • Where does the data in the report come from?
  • When is it advisable to download the movements Excel sheet?
  • Can I generate the report if I had no activity during the year?
• 2. How to interpret the Tax tax report
  • What is the FIFO method for calculating gains or losses?
  • How are commissions taken into account?
  • Example 1: Buying BTC with euros
  • Example 2: Selling BTC for euros
• 3. Frequently Asked Tax Questions
  • What taxes should I declare if I have traded cryptocurrencies?
  • I only had losses, do I still need to declare?
  • Do I need to declare transactions between cryptocurrencies or only when I sell them?
  • How are airdrops, Earn yields, and cashback treated?
  • What happens if I pay for goods or services with cryptocurrencies?
  • Do I have to pay taxes if I transfer cryptos from one wallet to another?
  • What happens if I don't declare cryptocurrencies?
  • Are payments made with Bit2Me Card taxable?
• 4. Tax Advisory
  • When should I consult a tax advisor?
  • Can I book an appointment with a tax advisor through Bit2Me?

1. Understanding Bit2Me Tax

What is Bit2Me Tax?

It is a tool that allows you to generate a tax report in PDF based on the activity registered on Bit2Me. Its goal is to help you prepare your taxes in a simpler, faster, and more convenient way, without the need to manually reconstruct all your activity within the platform.

How can Bit2Me Tax help me?

Bit2Me Tax can help you understand and review your tax activity generated within Bit2Me through a PDF report and an Excel sheet of movements. Its aim is to reduce the effort required to prepare your taxes and provide you with a clear basis for the activity registered on the platform.

What does the Bit2Me Tax tax report include?

It is generated from the activity registered within the Bit2Me ecosystem during the corresponding fiscal year. It includes operations and movements with tax relevance in products such as:

• Buying and selling on Bit2Me Pro.
• Bit2Me Earn (Staking).
• Bit2Me Card (Payments and Cashbacks).
• Airdrops, Loans, and other registered events.

Where does the data in the report come from?

The data comes exclusively from the activity registered on Bit2Me. The report is built with the transactional information available within the platform for the selected fiscal year.

When is it advisable to download the movements Excel sheet?

The Excel sheet is especially useful for reviewing your transactions in more detail or when your activity goes beyond Bit2Me. The Excel sheet allows you to complement the report information and review your case with greater traceability. You should download it if:

• You have made blockchain deposits or withdrawals.
• You have traded on other exchanges.
• You have conducted OTC trading.
• You want to review your activity in more detail or use external tax tools

Can I generate the report if I had no activity during the year?

No. If the system does not detect any tax-relevant activity in your account during the selected fiscal year (purchases, sales, exchanges, Earn rewards, or Bit2Me Card movements), it will not be able to generate either the PDF tax report or the Excel file of movements.

Since there are no transactional records to process, the system will indicate that no data is available for that period. Please note that the report is built exclusively from the actual transactions executed within the platform.

2. How to interpret the Tax tax report

What is the FIFO method for calculating gains or losses?

FIFO stands for "First In, First Out." To calculate gains or losses, it is assumed that the first units you bought are the first ones you sell or exchange. From there, the gain or loss is calculated by comparing the acquisition cost of those units with their transmission value at the time of disposal.

How are commissions taken into account?

Commissions are already integrated into the calculation of each transaction. You do not need to do anything extra with them. They are deductible, and the Bit2Me system takes them into precise account in the calculation of each transaction to determine the actual capital gain or loss.

The report may include the section "Undeducted total transaction values - Fee". This is purely informative and sums the total commissions for the year in euros. "Undeducted" does not mean they are missing for deduction; it means you do not have to subtract them separately, as they are incorporated into each transaction.

Example 1: Buying BTC with euros

You buy 0.00117 BTC for 100.00 EUR. The commission is 0.000001 BTC, valued at approximately 0.09 EUR.

This example is illustrative and shows how this type of transaction might appear in the report.

What happens in this case:

• The commission is deducted from your balance.
• The report treats it as a small transfer of the asset used to pay for it.
• As that BTC was just bought at the same price, the gain is 0.00 EUR.
• The cost of that commission is already reflected in the calculation of the transaction.
  
  

Example 2: Selling BTC for euros

You sell 0.00117 BTC for 100.00 EUR. The commission is 0.000001 BTC, valued at approximately 0.09 EUR.

This example is illustrative and shows how this type of transaction might appear in the report.

What happens in this case:

• The gain from the sale is already calculated on the BTC sold.
• The commission is registered separately as another small transfer.
• In this example, the commission generates a small additional gain of 0.01 EUR because the BTC used to pay for it was originally acquired at a lower price than its current value.

3. Frequently Asked Tax Questions

What taxes should I declare if I have traded cryptocurrencies?

The tax implications of cryptocurrencies can vary depending on the user's tax residence country. In general, if you have realized gains, losses, or certain income related to cryptocurrencies, you may be obligated to declare them according to the applicable regulations in your jurisdiction.

I only had losses, do I still need to declare?

In many cases, yes. Cryptocurrency losses must also be declared and, depending on the applicable regulations, may be relevant for offsetting gains or other tax results. The exact treatment depends on the country and the user's specific situation.

Do I need to declare transactions between cryptocurrencies or only when I sell them?

Depending on the applicable tax jurisdiction, exchanges between cryptocurrencies may have tax relevance even if there is no conversion to euros. Therefore, it is important to keep adequate records of these transactions and review how they are treated in your country.

How are airdrops, Earn yields, and cashback treated?

The tax treatment may vary depending on the user's tax residence country and the type of transaction. For the Bit2Me Tax report, these movements are reflected according to the applicable tax logic in the corresponding jurisdiction. Generally speaking:

• Airdrops may have specific tax treatment from the moment they are received.
• Yields obtained through services like Earn, staking, or lending may be reflected as income according to applicable treatment.
• Cashback from the Bit2Me Card is recorded in the report and treated according to the defined tax logic for that type of event.

What happens if I pay for goods or services with cryptocurrencies?

Paying with cryptocurrencies can have tax implications, as this type of transaction may involve the transfer of the asset used as a means of payment. In such cases, the transaction may require calculating the difference between the acquisition cost of the asset and its value at the time it is used for payment.

Do I have to pay taxes if I transfer cryptos from one wallet to another?

Generally, a transfer between wallets of the same owner does not, in itself, imply a capital gain or loss. However, the treatment may depend on how the transaction is interpreted in each jurisdiction and whether there are other associated elements.

What happens if I don't declare cryptocurrencies?

Tax obligations related to cryptocurrencies can vary according to the applicable regulations in each country. Failure to correctly declare transactions or income with tax relevance may lead to issues, inquiries, or penalties from the corresponding tax authority.

Are payments made with Bit2Me Card taxable?

The taxation of your purchases depends directly on the wallet you use as the payment source:

• Payments with the Euro wallet: When using fiat currency to pay for a service or product, there is no exchange of digital assets. No swap occurs, and therefore, these transactions are not subject to taxation.
• Payments with Crypto wallets: When making a purchase, the system automatically executes a sale (exchange) of your cryptocurrencies for euros to complete the payment. Tax-wise, this has the same implications as a regular sale.

4. Tax Advisory

When should I consult a tax advisor?

Bit2Me Tax covers the tax needs of a significant majority of users who operate on Bit2Me. However, it is advisable to consult an advisor when you need to understand how the regulations apply to your specific case or when your activity is more complex than usual. For example, it may be particularly useful if:

• You have traded on multiple exchanges.
• You have made blockchain deposits or withdrawals.
• You have conducted OTC transactions.
• You need to confirm how to treat a specific transaction on your tax return.
• You want to review your situation before filing your tax return.

Can I book an appointment with a tax advisor through Bit2Me?

Yes. Bit2Me offers you the option to book an appointment with an external tax advisor specializing in the field through the app or website in the TAX section, so you can review your case with professional support.