How Ethereum is taxed
ETH is treated as property in all supported jurisdictions. Every disposal - selling for fiat, swapping for another token, spending ETH on a purchase - triggers a capital gain or loss. Receiving ETH as staking rewards, income, or payment is taxable income at fair market value on the date of receipt.
Taxable events: selling ETH, swapping ETH for any token, spending ETH on goods or services, receiving ETH as payment, staking rewards received, ETH spent on gas fees (a disposal at current market price).
Not taxable: buying ETH with fiat, transferring ETH between your own wallets, holding.
Ethereum staking taxes
Since The Merge (September 2022), ETH staking rewards are distributed directly to validators and delegators. These rewards are taxable income in most jurisdictions:
- Direct staking: rewards received are generally taxable income at fair market value on the receipt date
- US: IRS Rev. Rul. 2023-14 confirms staking rewards are ordinary income in the year received
- UK: HMRC generally treats staking rewards as miscellaneous income, if the activity does not amount to a trade
- Canada and Australia: staking rewards are generally treated as taxable income on receipt, though the characterization depends on the facts
- Liquid staking (stETH, cbETH, rETH): receipt token received on deposit may be a disposal event; daily rebases are additional income events
Ethereum DeFi tax complexity
ETH is the base layer for thousands of DeFi protocols. Every on-chain interaction has potential tax implications in most jurisdictions, depending on the protocol structure:
- DEX swaps (Uniswap, Curve, 1inch): disposal of input token, acquisition of output token at fair market value
- Lending (Aave, Compound): depositing may be a disposal event; interest received is generally taxable income
- Liquidity pools: providing liquidity and withdrawing are both potentially taxable in most jurisdictions, depending on jurisdiction and protocol structure
- Gas fees: ETH spent on gas is a disposal of ETH at the market price at the time of the transaction
DYOR.tax applies provisional classifications to recognized protocol activity. Ambiguous deposits, wrapper or receipt tokens, bridges, and unsupported interactions are flagged for review.
ETH wallet scanning - 40+ supported networks from one address
Add your Ethereum address (0x...) and DYOR.tax scans your complete on-chain history:
- Covers all EVM-compatible chains: Ethereum mainnet, Arbitrum, Optimism, Base, Polygon, and 35+ more
- Supported DeFi interactions are attributed; ambiguous events are flagged for review
- Merged with your exchange CSV for unified cost basis tracking
- Cross-source self-transfer detection avoids double-counting
Ethereum taxes by country
- Short-term gains (held 1 year or less): taxed as ordinary income, up to 37%
- Long-term gains (held more than 1 year): 0%, 15%, or 20% depending on income
- Staking income reported on Schedule 1 (Rev. Rul. 2023-14)
- Form 8949 + Schedule D for capital gains; deadline April 15
- Section 104 pooling applies to ETH and all ERC-20 tokens
- stETH rebases treated as miscellaneous income, generally, if the activity does not amount to a trade
- CGT rates: 18% (basic rate), 24% (higher rate) - updated October 2024
- Annual exempt amount: £3,000 (2024/25); SA108 Cryptoassets, deadline January 31
- ACB method applies across all ETH purchases including tokens acquired through DeFi
- Staking rewards commonly reported as income depending on the facts
- 50% inclusion rate under current law; Schedule 3, deadline April 30
- The calculator applies FIFO cost basis; 50% CGT discount if held 12 months or more
- Staking rewards are assessable income at fair market value on receipt
- The ATO generally treats token swaps as CGT events; tax year July 1 - June 30
- No formal CGT; ETH and ERC-20 token gains are taxable as income if acquired with the purpose of disposal
- Staking rewards are generally taxable income on receipt
- IRD's view is that most crypto trading is taxable - the non-taxable exception is narrow; tax year April 1 - March 31
- 30% flat tax on all ETH and token gains under Section 115BBH
- No loss offset between crypto assets - DeFi losses cannot offset staking income or other crypto gains
- Schedule VDA on ITR-2 or ITR-3
- Revenue or capital depending on intention and frequency of trading
- CGT inclusion rate: 40% for individuals
- Annual exclusion: R40,000 for years of assessment 2017–2026; R50,000 for the 2027 year of assessment
The Merge and its tax implications
When Ethereum moved from Proof of Work to Proof of Stake in September 2022, the transition itself was not a taxable event. ETH held before and after The Merge is the same asset, with the same cost basis.
What changed post-Merge: new ETH is issued as staking rewards to validators and delegators, not miners. These rewards are taxable income at fair market value when received.
ETH spent on gas - both before and after The Merge - is a disposal of ETH at the market price at the time of the transaction.
Common Ethereum tax mistakes
- Missing DeFi interactions. Every token swap on a DEX is a disposal - these are not non-events.
- Treating gas fees as non-reportable. ETH paid as gas is a disposal of ETH at market price.
- Not tracking staking rewards. Staking income is taxable in the year received, not when sold.
- Assuming wrapped tokens are non-taxable. Wrapping ETH to WETH, or stETH to wstETH, is treated as a disposal in most jurisdictions.
Related DeFi guides and calculators
Uniswap Tax Calculator · Aave Tax Calculator · Lido Staking Taxes · DeFi Lending Taxes · Crypto Staking Taxes