Frequently Asked Questions about the TAX Report

At Bit2Me, we are committed to providing you with all the necessary information so that you can carry out your cryptocurrency tax return simply and securely. For this, 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 that you can interpret the report, thus facilitating its understanding and review:

TABLE OF CONTENTS

• 1. Understand Bit2Me Tax
  • What is Bit2Me Tax?
  • How can Bit2Me Tax help me?
  • What does the Bit2Me Tax report include?
  • Where does the report data come from?
  • When should I download the CSV?
• 2. How to interpret the Tax report
  • What is the FIFO method in calculating gains or losses?
  • How are fees taken into account?
  • Example 1: Buying BTC with euros
  • Example 2: Selling BTC with euros
• 3. Frequently Asked Tax Questions
  • What taxes must I declare if I have traded cryptocurrencies?
  • I have only had losses, Do I still have to declare?
  • Do I have to declare trades 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 do not declare cryptocurrencies?
  • Are payments made with the Bit2Me Card taxed?
• 4. Tax Advice
  • When should I consult a tax advisor?
  • Can I book an appointment with a tax advisor from Bit2Me?

1. Understand Bit2Me Tax

What is Bit2Me Tax?

It is a tool that allows you to generate a PDF tax report based on the operations registered on Bit2Me. Its objective is to help you prepare your taxes in a simpler, faster, and more comfortable 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 the tax activity generated within Bit2Me through a PDF report and a transaction movements to Excel. Its objective is to reduce the effort required to prepare your taxes and give you a clear basis on the operations registered on the platform.

What does the Bit2Me 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:

• Buy/Sell and Bit2Me Pro.
• Bit2Me Earn (Staking).
• Bit2Me Card (Payments and Cashbacks).
• Airdrops, Loans, and other registered events.

Where does the report data come from?

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

When should I download the transaction movements to Excel?

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

• Blockchain deposits or withdrawals.
• Traded on other exchanges.
• OTC operations.
• You want to review your activity in more detail or use external tax tools

2. How to interpret the Tax report

What is the FIFO method in 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 value of those units with their transmission value at the time of exit.

How are fees taken into account?

The fees are already integrated into the calculation of each operation. You don't have to do anything extra with them. They are deductible, and the Bit2Me system accurately takes them into account in the calculation of each operation to determine the real capital gain or loss.

In the report, the section "Total transaction values not deducted - Fee" may appear. This is just an informative piece of data that sums the total fees for the year in euros. "Not deducted" does not mean they are yet to be deducted, but rather that you do not have to subtract them separately, since they are incorporated into each operation.

Example 1: Buying BTC with euros

You buy 0.00117 BTC paying 100.00 EUR. The fee is 0.000001 BTC, with an approximate value of 0.09 EUR.

This example is illustrative and reflects how this type of operation can be shown in the report.

What happens in this case:

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

Example 2: Selling BTC with euros

You sell 0.00117 BTC for 100.00 EUR. The fee is 0.000001 BTC, with an approximate value of 0.09 EUR.

This example is illustrative and reflects how this type of operation can be shown in the report.

What happens in this case:

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

3. Frequently Asked Tax Questions

What taxes must I declare if I have traded cryptocurrencies?

Cryptocurrency taxation can vary depending on the user's country of tax residence. In general, if you have obtained gains, losses, or certain income linked to cryptocurrencies, there may be an obligation to declare them in accordance with the applicable regulations in your jurisdiction.

I have only had losses, Do I still have to declare?

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

Do I have to declare trades 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 a proper record of these operations and review how they are treated in your country.

How are airdrops, Earn yields, and cashback treated?

Tax treatment may vary depending on the user's country of tax residence and the type of operation. In the case of the Bit2Me Tax report, these movements are reflected in accordance with the tax logic applicable in the corresponding jurisdiction. In general:

• airdrops may have specific tax treatment from the moment they are received
• yields obtained through services such as Earn, staking, or lending may be reflected as yields according to the applicable treatment
• Bit2Me Card cashbacks are recorded in the report and treated according to the tax logic defined for that type of event

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

Paying with cryptocurrencies may have tax effects, as this type of operation may involve the transmission of the asset used as a means of payment. In these cases, the operation may require calculating the difference between the acquisition value of the asset and its value at the time it is used to pay.

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

In general terms, a transfer between wallets belonging to the same owner does not usually imply a capital gain or loss in itself. However, the treatment may depend on how the operation is interpreted in each jurisdiction and whether there are other associated elements.

What happens if I do not declare cryptocurrencies?

Tax obligations related to cryptocurrencies can vary according to the applicable regulations in each country. Not correctly declaring operations or income with tax relevance can lead to incidents, requirements, or sanctions by the corresponding tax authority.

Are payments made with the Bit2Me Card taxed?

The taxation of your purchases depends directly on the wallet you use as a funding 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 exchange occurs and, therefore, these operations are not subject to taxation.
• Payments with Crypto wallets: When making a purchase, the system automatically executes a sale (exchange) of your cryptocurrencies to euros to complete the payment. For tax purposes, this has the same implications as a standard sale.

4. Tax Advice

When should I consult a tax advisor?

Bit2Me Tax covers the tax needs of a significant majority of users operating on Bit2Me. However, it is advisable to have an advisor when you need to interpret how the regulations apply to your specific case or when your operations are more complex than usual. For example, it can be especially useful if:

• you have traded on multiple exchanges
• you have made blockchain deposits or withdrawals
• you have done OTC operations
• you need to confirm how to treat a specific operation in your return
• you want to review your situation before filing the return

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

Yes. Bit2Me offers you the possibility of booking an appointment with a specialized external tax advisor from the app or web in the TAX section, so you can review your case with professional support.