Tax obligations
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MetaMask doesn’t provide tax advice. This article represents our stance on guidance received to date, which may continue to evolve and change. None of this should be considered as advice or an individualized recommendation, but it’s important to us that our users have relevant information available to them in the most accessible way possible. Please consult a local tax professional regarding your own tax circumstances.
This guide is designed to help you understand the tax obligations you may have. The following information is general in nature. Tax rules vary depending on your jurisdiction. For a list of country-specific tax guides, see here.
Common taxable events in crypto
Many crypto transactions are considered taxable events, meaning you could end up paying taxes on them.
The tax treatment of specific events will vary depending on your local tax jurisdiction. Different tax treatment may apply if you are trading or investing in cryptocurrency as a business. This information is general in nature, and you should seek professional guidance when preparing your taxes.
The following are some common taxable events:
Crypto-to-crypto swaps
A crypto-to-crypto swap is when you exchange one cryptocurrency for another. In most cases, swapping crypto is treated the same as selling it, for tax purposes. If there’s a capital gain, meaning it's increased in value since you purchased it, you could pay taxes on it.
Staking
Staking allows you to earn rewards for locking your cryptocurrency up to support DeFi network operations. Generally speaking, staking rewards may be treated as income when you receive them and then as capital gains if and when you sell them.
Airdrops
When you receive an airdrop, you receive free cryptocurrency, usually as a part of a marketing campaign. Sometimes, you’ll have to complete certain actions to earn it, while other times, you won’t have to do anything. Like staking, your airdropped coins may be considered income when you receive them, and also subject to capital gains when you sell them.
Lending and borrowing
Borrowing cryptocurrency may not have any tax implications. However, lending cryptocurrency could create taxable income in the form of interest.
Depositing and withdrawing liquidity into a pool
Participating in a liquidity pool can result in a taxable event when you deposit and withdraw your funds. However, the tax treatment varies depending on where you live.
Rewards from liquidity pools and yield farming
Liquidity pools and yield farming are both ways to create liquidity in the crypto market. In both cases, you can earn rewards, similar to how you would when staking. Those rewards are likely to be considered taxable income.
Wrapping tokens
Wrapping tokens is the process of essentially creating a new coin to use on a non-native blockchain. There are different tax treatments for wrapping tokens depending on where you live.
NFTs
Some tax authorities often treat non-fungible tokens (NFTs) just like cryptocurrency for tax purposes. The treatment of taxable events varies slightly by country.
Capital gains on crypto transactions
Capital gains on crypto transactions are calculated much the same way as other investments, such as stocks and real estate. To calculate your gains, subtract your cost basis from the sale price. Your cost basis is the original price you paid for the crypto, including any fees. The sale price is the price you sold it for at the time of disposal, minus any fees.
How to calculate capital gains on crypto transactions
- Determine the cost basis: this is the price you originally paid for the cryptocurrency, including any transaction fees.
- Determine the selling price: this is the amount you received when you sold the crypto, minus any transaction fees.
- Calculate the gain or loss: subtract the cost basis from the proceeds
Taxable events in Australia
Learn about taxable events in Australia
Disclaimer: The following information applies to individual taxpayers and is general in nature. Different tax laws may apply if you are trading or investing in cryptocurrency as a business. You should seek professional guidance when preparing your taxes.
Selling crypto for AUD or other fiat currencies
Buying cryptocurrency with AUD isn’t usually a taxable event. However, there are tax implications for selling that crypto for fiat currency. In Australia, you are required to pay taxes on your capital gains from crypto.
The gain is the difference between the asset's cost base and the amount you sold it for. In Australia, your capital gains are taxed at the same rate as your other income – though you’ll be eligible for a CGT discount if you hold the asset for at least 12 months.
If your crypto has declined in value since you bought it, you’ll have a capital loss. You can subtract capital losses from your gains to reduce your net gain for the tax year. Any net capital loss can be carried forward to offset gains in future tax years.
Crypto-to-crypto swaps
Swapping one cryptocurrency for another in Australia is considered disposing of your original asset and buying another. As a result, you will have a CGT event and will be taxed on any gain (the difference between your cost base and the fair market value of the asset in AUD at the time of the swap).
For example, if you purchased $10,000 of Bitcoin (BTC) and later swapped it for Ethereum (ETH) when the BTC was worth $15,000, you could pay capital gains taxes on $5,000. Your new cost basis for the ETH is then $15,000.
Staking
In Australia, staking rewards are treated as income.
You must report their fair market value in AUD as income at the time you received them.
Later, if you sell your staking rewards for more than their initial value, you will trigger a CGT event. If you sell them for less than the original value, you can report this as a capital loss.
Airdrops
Airdrops in Australia are treated the same as staking rewards. When you receive an airdrop, the fair market value of the coins at that time is considered taxable income, and you must declare it on your tax return. Later, if you sell these rewards and the value has changed, you will need to report a capital gain or loss.
Lending and borrowing
Borrowing cryptocurrency isn’t usually considered a taxable event in Australia. Instead, it’s simply treated as any other debt you must repay. However, loaning your crypto could have several tax consequences.
First, in Australia, loaning out your crypto is considered a disposal event, meaning you could have a CGT event. For example, if your crypto was worth $100 when you purchased it but $120 when you lent it out, you’d likely have a capital gain of $20 that you’d have to pay taxes on.
Additionally, any interest you receive from the loan is considered ordinary income, and you’ll have to pay income taxes on it.
Depositing and withdrawing liquidity from a pool
Depositing funds into a liquidity pool is considered disposing of your crypto, which means you’ll have a CGT event if the asset’s value has appreciated since you acquired it.
When you withdraw your crypto from the pool (typically by exchanging a token representing your stake for your original assets), you may also face a taxable event if there has been a change in value.
Rewards from liquidity pools and yield farming
Any rewards you earn from liquidity pools or yield farming are treated as taxable income in Australia at the time you receive them. You are taxed on the market value of these rewards when they are credited to your account.
Later, if you sell these rewards at a profit, a CGT event will be triggered, much like with other crypto transactions.
Wrapping tokens
In Australia, wrapping and unwrapping crypto assets is treated as a crypto-to-crypto swap. You’ll have a CGT event when you wrap your crypto, and another if you decide to unwrap it later.
NFTs
The tax treatment of NFTs in Australia varies depending on several factors.
First, if you hold an NFT as a personal use asset – perhaps you buy it to display in your home – you may be exempt from capital gains taxes.
In cases other than personal use, you may be subject to capital gains or income taxes, depending on how you used the NFTs.
Bridging tokens
Bridging tokens allows you to transfer your crypto assets from one blockchain to another. It is generally regarded as a non-taxable event in Australia if you retain ownership of the tokens throughout the process.
However, some investors or tax experts may choose to treat bridging as a crypto-to-crypto swap, which could be considered a CGT event. It’s advisable to seek professional advice on your specific situation.
Taxable events in the United Kingdom
Learn about taxable events in the United Kingdom
Disclaimer: The following information applies to individual taxpayers and is general in nature. Different tax laws may apply if you are trading or investing in cryptocurrency as a business. You should seek professional guidance when preparing your taxes.
Selling crypto for GBP or other fiat currencies
In the United Kingdom, you are required to pay Capital Gains Tax (CGT) on the difference between what you paid for the asset and what you sold it for. If you made a profit, you will report a capital gain; if you made a loss, you will report a capital loss. Losses can be used to offset gains, reducing the total tax owed on your capital gains.
You are eligible for a CGT allowance on the first £3,000 of gains (or £1,500 for trusts) in the 2025 tax year. This means that you won’t pay any tax CGT tax until your total gains exceed this threshold. Note that this applies to all CGT assets, not just cryptocurrency.
Crypto-to-crypto swaps
Crypto-to-crypto swaps in the United Kingdom are treated as disposal events. When you exchange one cryptocurrency for another, you must calculate your capital gain or loss by comparing your original cost basis with the fair market value of the asset you disposed of at the time of the swap.
Staking
In the United Kingdom, staking rewards are generally treated as income. This means that when you receive staking rewards, the market value of the tokens in GBP at the time of receipt is added to your income and subject to income tax.
Airdrops
Like staking rewards, airdropped coins in the United Kingdom are treated as income. When you receive an airdrop, you must report the market value of the coins in GBP as income at the time of receipt. If you later sell these coins for a profit, you will need to pay Capital Gains Tax on the gain.
Lending and borrowing
Borrowing cryptocurrency in the United Kingdom typically does not have any tax implications.
However, if you lend your crypto and receive interest payments in return, those interest payments are usually treated as income and are taxable.
Additionally, if your loan collateral is liquidated due to a decline in its value, that event may be treated as a disposal, triggering a Capital Gains Tax event.
Depositing and withdrawing liquidity from a pool
Depositing into a liquidity pool%20earned%20from%20the%20pool%20are%20subject%20to%20income%20tax.,-Events%20subject%20to) is generally considered to be disposing of your crypto asset, meaning you may pay capital gains taxes on the difference between your cost basis and the value at the time of the disposal. Additionally, you could have a capital gains tax even when you withdraw your asset, depending on its value at that time.
Rewards from liquidity pools and yield farming
Rewards earned from liquidity pools and yield farming in the United Kingdom are generally treated as income. You must include the market value of these rewards in your income when you receive them. Later, if you sell these assets at an increased value, any additional gain is subject to Capital Gains Tax.
Wrapping tokens
The United Kingdom doesn’t provide clear guidance on the tax treatment of wrapping tokens.
However, if you consider wrapping tokens to be the equivalent of exchanging one crypto asset for another, then you would need to pay capital gains taxes on any increase in the value of the original asset that you’re wrapping.
NFTs
The tax treatment of NFTs in the United Kingdom is the same as that of cryptocurrency. When you sell an NFT for more than you purchased or received it, you’ll pay capital gains taxes on the portion of the sale that is profit.
Bridging tokens
The United Kingdom doesn’t provide clear guidance on the tax treatment of bridging tokens.
However, it explicitly states that you don’t have a disposal – and, therefore, won’t pay capital gains taxes – in any transaction where you retain ownership of the tokens.
Therefore, if you consider that you retain ownership of your tokens in a bridging transaction, you can assume the transaction is not a taxable event.
Crypto tax guides by country
Below are local guides from our expert tax partner, Crypto Tax Calculator. These guides will walk you through the local tax laws in your country and help you prepare a crypto tax report for your local tax authority.
- United States
- United Kingdom
- Australia
- Canada
- South Africa
- Ireland
- Germany (EN)
- Germany (DE)
- France (EN)
- France (FR)
- Sweden (EN)
- Norway (EN)
- Norway (NO)
- Spain (EN)
- Finland (EN)
- Belgium (EN)
- Italy (EN)
- Greece (EN)
- Japan (EN)
Other FAQs
Do I need to pay taxes on cryptocurrency purchases, or only on sales?
Buying cryptocurrency with fiat currency (aka the legal government currency in your country) isn’t usually a taxable event. However, there are usually tax implications for selling that crypto for fiat currency, especially if it's worth more than when you bought it.
How do I report gas fees or transaction fees for tax purposes?
Gas and transaction fees can often be deducted or factored into your crypto tax calculations, depending on your country’s tax laws. Below are some common types of fees and how they may be treated:
- Trading fees (buying/selling crypto) – Usually added to the cost basis or deducted from proceeds.
- Transaction fees for transfers (sending between wallets) – May not be deductible, but some tax authorities allow them as expenses.
- Staking, DeFi, or NFT-related fees – May be deductible as business or investment expenses, depending on local regulations.
While this may seem complex, a crypto tax tool like Crypto Tax Calculator can automatically track gas fees and categorize them in your tax reports.
Once all fees are recorded, generate the necessary reports and submit them to your tax authorities. If you’re unsure about specific tax rules, consult a local tax professional to ensure compliance.
Do I need to prepay taxes for releasing locked funds?
It depends on how the locked crypto is being released and your local tax laws.
- If the crypto was already yours (e.g., vested tokens, staking rewards unlocking, or time-locked assets you previously owned), you typically don’t need to prepay taxes just to access them. However, you may owe taxes when you dispose of them.
- If you’re receiving new income (e.g., protocol rewards, employer token grants, or locked airdrops becoming available), you may need to report and prepay estimated taxes to your local tax office based on your country’s tax rules.
That said, if someone is asking you to pay taxes upfront before releasing your funds, be cautious—it could be a scam. Always verify with official tax authorities before making any payments.
Since tax rules vary by location, it’s best to check with a tax professional to determine your obligations.
Am I required to pay taxes to access my funds?
No, simply accessing your funds in MetaMask is not a taxable event. As a self-custodial wallet, MetaMask does not report your transactions to tax authorities.
However, depending on your country’s tax laws, you may owe taxes when you engage in certain activities, including but not limited to:
- Selling crypto for fiat (e.g., USD, EUR)
- Swapping one crypto for another
- Using crypto for purchases
- Earning crypto through staking, mining, or rewards
Since tax regulations vary, we recommend consulting a local tax professional or using a crypto tax tool like Crypto Tax Calculator to track your transactions and ensure compliance.
MetaMask does not provide tax advice and this article should not be viewed as such. For questions relating to your specific situation we strongly recommend speaking with a tax professional.