Tax on Liquidity Pools
Calculate your taxes on DeFi liquidity pool deposits and withdrawals.
How are liquidity pools taxed?
Providing liquidity on a DEX (Uniswap, PancakeSwap, etc.) creates several taxable events. Depositing tokens into a pool may constitute a taxable exchange. Trading fees collected are taxable income. Withdrawal generates a capital gain or loss based on the difference between the value at deposit and withdrawal.
Tracking LP transactions
Taxes Crypto automatically detects your interactions with liquidity pools. LP tokens received, rewards collected and withdrawals are all tracked and valued in euros. The calculation takes into account the price variations of both tokens in the pool for accurate tax computation.
Liquidity pool tax report
Taxes Crypto generates a detailed report of all your liquidity activities with taxable amounts calculated according to your country's official method. Compatible with French (2086, 2042-C), German (Anlage SO) and Spanish (Modelo 100) tax forms.
Frequently asked questions
Is depositing into a liquidity pool taxable?
In most countries, yes. Depositing two tokens into a pool is generally considered an exchange (you swap your tokens for LP tokens), which constitutes a taxable event.
How are LP fees taxed?
Fees collected as a liquidity provider are generally treated as taxable income at the time they are received or claimed. Taxes Crypto calculates the euro value of these fees.
Can I deduct liquidity losses?
Losses realized when withdrawing liquidity (including impermanent loss) can generally be deducted from your capital gains. Taxes Crypto calculates these losses automatically.
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