PayPal and Coinbase have invested in a company that automates crypto tax reporting for traders, exchanges and merchants.
Winklevoss Capital — founded by billionaire twins Tyler and Cameron — have also injected capital into TaxBit.
The investment comes as PayPal prepares to allow merchants to accept crypto payments through its platform. A new service that allows millions of consumers to buy, sell and spend digital assets is also gradually being rolled out around the world.
TaxBit was founded by a group of accountants, tax attorneys and software developers with a view to simplifying tax returns and fueling mainstream adoption. The company’s CEO and founder Austin Woodward said:
“This investment will help us achieve our aim of being the most innovative and trustworthy provider of cryptocurrency tax technology.”
America’s Internal Revenue Service recently announced it was ramping up efforts to crack down on people who fail to declare profits generated through crypto trading — and a question about virtual currencies now appears prominently on its income tax forms.
It’s also just been announced that South Korea will force anyone who makes more than $2,300 in annual profit from crypto trading to pay a flat rate of 20% in tax. This threshold for capital gains is substantially lower than the ones offered for profits made on the stock market.
Selling cryptocurrency at a profit is a taxable event — something that many newcomers to the space may not realize. It’s likely that PayPal will be keen to integrate some form of tax software into its platform to ensure that users are aware of their obligations.
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