How are crypto payments taxed for merchants in 2024?

The boom of the crypto market caused governments around the world to pay closer attention to cryptocurrencies. Governments soon realized that crypto is a trillion-dollar industry, and everyone participating in it must share their profits with their countries. Today, many nations worldwide have introduced strict laws regulating the process of crypto taxation. Merchants, that accept cryptocurrencies as payment, often wonder, “Is there tax on cryptocurrency?” The answer to this question is yes, and such merchants can no longer expect their crypto profits to be free from taxes. Businesses dealing with crypto should take the matter of taxation seriously and make sure to pay all of the duties.

Key Points:

How are crypto payments taxed for merchants in 2021?
  • Cryptocurrencies are taxed in the majority of countries worldwide.
  • Businesses featuring crypto payments in the UK and Australia have to pay income tax on crypto profits.
  • NOWPayments’ crypto payment gateway tools make it easy for companies to monitor their crypto transactions and thus maintain fiscal transparency.

What are cryptocurrency taxes?

Cryptocurrency taxes, just like any other taxes, are the money that individuals owe to their government. Crypto taxes concern digital assets, which are considered property in the majority of countries. The particular procedures involving cryptocurrencies which are eligible for taxation vary from nation to nation. Yet, usually, crypto owners have to pay taxes on their crypto earnings every time they make a gain on their tokens. Thus, every business that sells products or services for crypto has to report on their crypto earnings and pay a corresponding tax. Moreover, in some countries, people who buy products with crypto also must pay taxes. For example, a person who bought one Bitcoin in 2012 for less than $100 and spent it in 2021 on a new car for $50,000 will have to pay a tax on their gains.

Do taxes complicate crypto payments?

What are cryptocurrency taxes?

Taxes do not complicate crypto payments, just like any other process of getting paid or selling. During the exchange itself, neither merchant nor client has to think about taxes. Nevertheless, a good practice for everyone would be to record the price of the cryptocurrency when they buy, sell, pay with it or accept it. This will facilitate the tax calculation in the future and will make it less stressful. Merchants that use NOWPayments can see each transaction they accepted in their account, so there is no need for them to keep their own record, yet, precautionary measures never hurt anybody.

How do merchants pay crypto taxes in different countries?

Countries around the world have different approaches to crypto taxes and have designed numerous laws that regulate them. Learn about the most exciting crypto tax cases.


Crypto taxes in USA

In the USA, merchants who accept cryptocurrency as payment are subject to specific tax obligations, such as Income Tax or Capital Gains Tax. The IRS treats cryptocurrencies as property for tax purposes, which means that any transaction involving cryptocurrency is considered a barter transaction. Merchants must report the fair market value of the cryptocurrency at the time of the transaction as part of their gross income. This value is determined in U.S. dollars on the date the transaction takes place. Additionally, any gain or loss made when the cryptocurrency is later exchanged or sold must also be reported as capital gains or losses. Merchants are advised to keep detailed records of their cryptocurrency transactions, including the date of transaction, the amount in cryptocurrency, the dollar value at the time of transaction, and the purpose of the transaction, to comply with IRS regulations and facilitate accurate reporting of income and capital gains.


Crypto taxes in Australia

As of 2024, merchants in Australia who accept cryptocurrency as a form of payment are subject to specific tax obligations under Australian tax law. The Australian Taxation Office (ATO) classifies cryptocurrencies as property and, therefore, subject to capital gains tax (CGT). When a merchant receives cryptocurrency in exchange for goods or services, the value of the cryptocurrency in Australian dollars at the time of the transaction is considered for tax purposes. This amount must be included in the merchant’s income for tax purposes.

Merchants must keep detailed records of all cryptocurrency transactions, including the date of transactions, the value in Australian dollars, the purpose of the transaction, and the parties involved. This information is essential for accurate tax reporting and compliance.

Additionally, any capital gain or loss that arises when the cryptocurrency is later disposed of (either by selling it, exchanging it, or using it to pay for business expenses) also needs to be reported. The cost basis for calculating the gain or loss is the market value of the cryptocurrency when it was first received.


“How do taxes work on cryptocurrency?” and “What is the tax on cryptocurrency” are popular searches on Google in the UK, and it is not surprising since the country has hundreds of businesses that accept crypto. The UK firms welcoming customers with crypto have to include all of the crypto funds they receive in exchange for their products and services in the trading profits. This also concerns companies that pay with crypto to their suppliers. Additionally, the company will have to pay Corporation Tax, and all of the crypto profits generated by it will be subject to Generally Accepted Accounting Practice (GAAP).

Starting April 2024, UK cryptocurrency users need to be aware of changes in tax regulations affecting capital gains and income from crypto activities. Capital Gains Tax (CGT) is now due on gains exceeding £3,000, reduced from £6,000. Taxable activities include profiting from trading as a business, earning income from mining, airdrops, or DeFi rewards, and receiving crypto as salary. For individuals, HMRC distinguishes crypto assets as exchange tokens, utility tokens, and security tokens, each potentially subject to different tax treatments.


Singapore is well-known for its welcoming stance towards cryptocurrencies.

Singapore does not impose capital gains tax on individuals who are not engaged in regular trading or business activities with cryptocurrencies, effectively making it a tax-free environment for casual crypto investors. However, an 8% goods and services tax (GST) is applied to fees incurred during the purchase, sale, or conversion of cryptocurrencies on centralized exchanges.

Singapore can be considered a heaven for companies that accept crypto as payment. All crypto revenue generated by businesses that feature a crypto payment method is taxed according to the standard income tax rates. Moreover, such businesses also can enjoy tax deductions in different situations. Every company in Singapore that accepts crypto must keep a record of all transactions and determine the total value of each payment they receive. Since there is no capital gains tax in Singapore, businesses do not have to pay any taxes when disposing of their cryptocurrency funds.

While there’s no capital gains tax, individuals trading crypto as a business or earning cryptocurrency in exchange for goods and services may be subject to income tax. Tax rates for residents vary from 0% to 22%. For non-residents, employment income is taxed at a flat rate of 15%, and other types of income at 22%.


The Income Tax Department (ITD) in India has provided guidelines for taxing Virtual Digital Assets (VDAs) like cryptocurrencies, NFTs, and tokens. Under the Finance Act 2022, which first recognized VDAs, a flat 30% tax rate applies to profits from selling, swapping, or spending these assets.

Additionally, a 1% Tax Deducted at Source (TDS) is required on VDA transfers, which exchanges may handle or may need to be managed by investors directly in cases like P2P trades or international transactions. Losses from VDAs cannot be offset against profits or carried forward. Certain transactions, such as crypto mining or staking, might be taxed at the individual’s slab rate.

For reporting, profits from crypto transactions must be included in the Schedule VDA of the ITR for FY 2022-2023.

How businesses can accept crypto

How businesses can accept crypto

Businesses that wish to accept cryptocurrencies can use NOWPayments crypto payment gateway solutions. NOWPayments offers tools such as crypto invoices and a virtual Point-of-Sale terminal that are easy to deploy and can be used by both online and brick-and-mortar stores.

Additionally, merchants with eCommerce stores can set up a crypto payment gateway with plugins. Bloggers and charities can accept crypto donations.

Final words

More and more governments are taxing crypto since it constitutes a potentially massive source of national revenue. Merchants that decide to accept cryptocurrencies should always comply with the existing taxation legislation. NOWPayments’ solutions for facilitating crypto payments allow businesses to easily track all of their transactions.