Crypto Tax Question

[Agbe]

OP you listen to them if you want to find yourself in trouble with the tax authorities in your country.

It is this statement that will make the Op to have problem with the tax authority if he listens to you. All those people you quoted are the same country with the Op and they all know what they are saying. We are doing crypto transactions every week so we know how it works in the country. Crypto Currency in Nigeria is not something external bodies will come and tell us.

As many others have said well, it depends on the laws of your country

They don't have the knowledge in the crypto taxe in the country. When I joined the crypto community in 2022 to 2023, there was no tax in the exchange amd we were selling without paying taxes but now we pay. And because new crypto tax law which many of us were not aware making most of us to ask questions. VAT is new in the crypto community in the country. And the most active international exchange that is in the country operating are Bitget and Bybit which all traders must pay the Value Added Tax (VAT) in crypto.

[malikking92]

No, the taxes deducted by your cryptocurrency exchange when you make a withdrawal do not fully cover your tax obligation to the government.

Think of it as a partial payment or withholding. You are still required to file a separate tax return for your cryptocurrency income. When you file, you report all your crypto transactions, including trading, staking rewards, or other taxable events, and calculate your total tax liability.

The amount already deducted by the exchange will typically count as a credit against your overall taxes. If you owe more, you’ll need to pay the difference. If they withheld too much, you might get a refund.

Keep detailed records of all your crypto transactions to ensure accurate reporting and avoid penalties!

[NotFuzzyWarm]

No, the taxes deducted by your cryptocurrency exchange when you make a withdrawal do not fully cover your tax obligation to the government.<snip>
Keep detailed records of all your crypto transactions to ensure accurate reporting and avoid penalties!

Spot on and Merit given for that!. NEVER trust that something happens automatically. Keep accurate records and file your taxes based on those records along with information the exchange will provide that covers how much they have deducted.

[zasad@]

No, the taxes deducted by your cryptocurrency exchange when you make a withdrawal do not fully cover your tax obligation to the government.<snip>
Keep detailed records of all your crypto transactions to ensure accurate reporting and avoid penalties!

Spot on and Merit given for that!. NEVER trust that something happens automatically. Keep accurate records and file your taxes based on those records along with information the exchange will provide that covers how much they have deducted.

I'm willing to agree with you if you do a few hundred trades a year on the exchanges and you can cross-check everything well.
But what if you make several thousand trades or several tens of thousands of trades?
In the stock market, the tax has long been calculated by certified software.

[NotFuzzyWarm]

But what if you make several thousand trades or several tens of thousands of trades?
In the stock market, the tax has long been calculated by certified software.

Very true but - at that level of trading you REALLY need to be using a tax professional to file your taxes. It is their job to sift through all of the records created by the software to ensure that you are paying the correct amount in tax and do not pay more than is required.

[Ultegra134]

Why do you speak so categorically about what you have no idea about? OP you listen to them if you want to find yourself in trouble with the tax authorities in your country. As many others have said well, it depends on the laws of your country but in general you can not trust what you deduct the exchange because maybe there are three bands, 15%, 20% and 25% and the exchange deducts the minimum because they do not know if you have accounts in other exchanges and what is the total. Or maybe it is taxed as earned income and then they apply a fixed percentage but what you have to pay will depend on other income and deductions.

Dude, are you for real? What are you talking about? The OP hadn't disclosed what deduction was going through the withdrawal process; he replied a few posts after mine, as he hadn't disclosed any details. How are you going around blaming others for what the OP hadn't specified in the first place? As Lucius already mentioned, and according to the OP, the Nigerian government decided to apply an extra tax on all cryptocurrency transactions, 7.5% on the transaction fees; an example is also included. It's not a major amount, nor is it income tax; the OP and every citizen in Nigeria still have to declare their profits as income.

[Free Market Capitalist]

If you go to the Nigerian local board... I think the VAT is the reason Davidvictorson started this topic because he is a Nigerian.

Ok, so what is this thread doing here and not on the Nigerian board?

It is this statement that will make the Op to have problem with the tax authority if he listens to you. All those people you quoted are the same country with the Op and they all know what they are saying. We are doing crypto transactions every week so we know how it works in the country. Crypto Currency in Nigeria is not something external bodies will come and tell us.

What are you doing talking about a Nigerian issue on the Legal board for the whole world, then?

Dude, are you for real? What are you talking about?

Yes, I am for real, and if you are talking about a specifically Nigerian issue I don't know what you are doing talking about it on this board. I am talking about what can happen around the world, as befits this board.

The OP could have already stated that he was referring to nigeria and that he just wanted to know what is going on there, besides posting it on your local board.

[zasad@]

But what if you make several thousand trades or several tens of thousands of trades?
In the stock market, the tax has long been calculated by certified software.

Very true but - at that level of trading you REALLY need to be using a tax professional to file your taxes. It is their job to sift through all of the records created by the software to ensure that you are paying the correct amount in tax and do not pay more than is required.

I don't think a tax accountant uses a calculator for calculations. If there is software for this purpose, you can use it yourself. In the tax code there are no penalties for small mistakes, but if, for example, an error on tax reduction of more than 25% of the amount, then penalties will follow.