Guide to Navigating and Understanding Your Tax Report (Austria)

Tax Team

Modified on: Tue, 9 Apr, 2024 at 12:10 PM

Introduction

Welcome to our guide on understanding and navigating your tax report. Designed with clarity in mind, this guide aims to decode the report's structure and translate it into straightforward, easy-to-understand information. In this guide, we'll show you how to interpret the data in your report.

Section 1: Settings

Users can tailor their preferences on the settings page prior to generating a report. This includes various options such as choosing a country and setting the tax report period. After the report has been generated and downloaded, users will be guided to the overview, as outlined in Section 2. The subsequent information highlights the most critical settings for this country.

Important Settings:
Accounting methode

We understand that proper financial management is crucial when dealing with cryptocurrencies. That is why we offer multiple accounting methods for you to choose from. We have developed a specific accounting method for Austria named ATM - FIFO for old stock and AVCO for new stock.

In the Austrian tax framework for individuals, assets acquired in the same depot are bundled together, and the average cost is calculated. This means the average cost is calculated for each coin separately. In addition, the old stock is subject to the FIFO method.

Additionally, we offer a variety of other accounting methods, including FIFO, LIFO, and HIFO. Please note that the ATM method is mandatory for Austria.

Crypto-to-Crypto Transactions

Transactions between different cryptocurrencies are treated as tax free. It is important to note that this regulation depends on the tax regime under which you fall, as it determines your taxation. Crypto-to-crypto transactions have been tax free since March 1, 2022.

In addition to the functionalities already discussed, our platform offers numerous additional settings. For each setting, you will find an 'I' symbol; this is the infobox which gives you detailed explanations about each setting. As you navigate the platform, these infoboxes will serve as your guide.

Section 2: Overview

Our tax report provides two distinct presentations. One pertains to the period before the new tax regulation, specifically before 2022, and the other to the period following the introduction of the new regulation in 2022.

For the report covering the period prior to 2022, profits derived from the purchase and sale of cryptocurrencies are considered taxable income, falling under progressive income tax. However, if the cryptocurrencies were held for longer than a year, they are regarded as tax-free.

Regarding the report for the period post-2022, transactions involving cryptocurrencies are typically classified into the category of capital gains from the purchase and sale of cryptocurrencies, while any income earned or received into your wallet is generally categorized as ongoing income.

The detailed explanations provided in the report help to understand the taxation rules of each country. By referring to these explanations, you can gain a clearer understanding. Furthermore, the specific tax details and differences between the two periods are further explained in the respective explanatory sections. We recommend carefully reviewing these areas to attain a comprehensive understanding of the tax implications of your cryptocurrency transactions.

In this section, we aim to decode the various transaction types that may appear in your tax report. Understanding these transactions is crucial for identifying their tax implications as well as their role as potential income sources.

1. Taxable Income from Trading Cryptocurrencies and NFTs

2. Taxable Ongoing Income from Trading Cryptocurrencies and NFTs

3. Non-Taxable Income from Trading Cryptocurrencies and NFTs

4. Other cryptocurrency and NFT payments

Taxable Income from Trading Cryptocurrencies

In the following section, we introduce basic transaction types. These include cryptocurrencies that were purchased at a specific time and later exchanged for another cryptocurrency, NFT, or fiat currency. Transactions usually triggering income gain include trade, spend, fees in cryptocurrency, remove, and provide liquidity.

It is important to note that the exact tax implications of such transactions may vary depending on the specific tax regulations in effect at the time of the transaction.

A purchases 1 BTC for 100 EUR on 01.07.2022 and another 1 BTC for 500 EUR on 01.08.2023. On 31.08.2023, he sells 1 BTC for 600 EUR. The average cost basis is calculated as 300 EUR, resulting in a profit of 300 EUR. This profit falls under section 1.1. Taxable income from the purchase and sale of cryptocurrencies according to § 27b par. 3 EStG.

Profits from Margin, Derivatives, and Futures Trading

Profits from margin trading, derivatives, and futures are classified as capital gains, as they result from the purchase and sale of assets, which is the precise definition of capital gains.

Transaction types typically regarded as capital gains from margins, derivatives, and futures include margin gain, derivatives/futures gain, margin loss, margin fee, derivatives/futures loss, and settlement fee.

On July 1, 2022, A made a margin profit of 100 EUR. The very next day, on July 2, 2022, A incurred a margin loss of 50 EUR. As a result, A realized a capital gain of 50 EUR (100 EUR profit - 50 EUR loss). This 50 EUR gain is documented under section 1.2. Taxable income from trading margin, derivatives and futures according to § 27 No. 4 EStG.

Taxable Income from Speculative Transactions with NFTs

In Austria, NFTs are considered intangible economic assets. If they are sold for a profit within one year of purchase, that profit is subject to taxation as speculative income, referred to as a speculative transaction. After the expiration of the one-year holding period, profits from the sale of NFTs are tax-free. This period is legally defined and serves to tax short-term speculative transactions.

On July 1, 2023, A purchased 1 APE for 100 EUR. Two months later, on September 1, A sold this 1 APE for 200 EUR. Consequently, A realized a profit of 100 EUR which falls under 1.3. Taxable income from speculative transactions with NFTs according to § 31 EStG.

Ongoing Income

Regardless of the specific tax regulation, income is taxed at the progressive income tax rate. This includes scenarios where you receive compensation for a service provided.

It is important to accurately capture and report all types of income in your tax report to ensure full compliance with your tax obligations. The following transaction types are considered income:

Staking, Lending, Income, Gift / Tip, Reward / Bonus, Airdrop, Masternode rewards, Dividends income, Interest income, Other income.

There are two distinct categories of taxable income related to cryptocurrencies as outlined in the EStG (Income Tax Act). The first is taxable ongoing income from cryptocurrencies, as specified in § 27b par. 2 Z 1 EStG. The second is taxable ongoing income from transaction processing services, as described in § 27b par. 2 Z 2 EStG. Income derived from mining (non-commercial) falls under the second category and should therefore be reported separately.

On July 1, 2022, A received a mining reward of 0.5 BTC, valued at 20,000 EUR. This income should be reported under Section 2.2. Taxable ongoing income from transaction processing services according § 27b par. 2 Z 2 EStG. Then, on July 2, 2022, A received an airdrop of 100 AVAX, valued at 100 EUR. This income should be reported under Section 2.1. Taxable ongoing income from cryptocurrencies according to § 27b par. 2 Z 1 EStG. Both types of income are subject to the standard income tax rate, according to the Austrian income tax act.

Non-Taxable Income from Speculative Transactions with Cryptocurrencies and NFTs

Another essential aspect of our tax report is the non-taxable income. This typically encompasses transactions between different cryptocurrencies or, as per the old tax regulation, cryptocurrencies that were held for longer than a year.

It is crucial to understand that although these transactions are not subject to taxation, they still must be included in your tax report. This ensures complete transparency and compliance with tax regulations.

A purchased 1 APE for 100 EUR on 01.01.2021. He held the APE for over a year. On 02.07.2022, he exchanged this 1 APE for 400 EUR. Despite the realized profit of 300 EUR from this trade,, this gain is tax-exempt in Austria after the one-year holding period and is categorized under section 3.1. Non-taxable income from speculative transactions with cryptocurrencies and NFTs.

Non-Taxable Income from Trading Cryptocurrencies and NFTs

Non-taxable income from cryptocurrencies refers to specific income categories, such as certain types of airdrops, that differ from capital gains and other income. We present this separately for clarity.

The following transaction types are typically considered as non-taxable income: Airdrop non-taxable, Income non-taxable.

On October 1, 2022, A received non-taxable income in the form of 1 BTC, valued at 40.000 EUR. This non-taxable income is documented under section 3.2. Non-taxable ongoing income according to § 27b par. 2 Z 2 S 2 EStG.

Other cryptocurrency and NFT payments

Donations, gifts, stolen/hacked/fraudulent transactions, lost assets, commercial mining, and minting are reported separately. This is because the taxation for these types of transactions often varies between countries. Therefore, to accommodate these differences, these transactions are displayed separately.

On September 1, 2022, A received a gift/tip in the form of 1 BTC, valued at 40.000 EUR. This gift is recorded under section 4.1. Incoming donations and gifts in the context of other cryptocurrency payments.