For information on the tax treatment of NFT, please refer to the National Tax Agency's site (Japanese only).
By using this method of uploading NFT trades, they are treated in the same way as other cryptocurrency trades and the pnl is calculated as miscellaneous income. To download the custom file format, please refer to "Custom File for any other trades".
Started Support for OpenSea for NFT Transactions in DeFi Functionality (as of August 18, 2023)
- We have started to support the history of purchasing/selling multiple NFTs in a single payment as of March 4, 2024. However, as there are exceptional cases depending on the transaction, we plan to check and improve on a case-by-case basis if you contact support when an issue arises.
- Regarding the history of NFT exchange, there are no clear rules for calculating profit and losses, so automatic support is not provided.
Others
- Curently order book based decentralized exchanges like dYdX, and NFT related transactions are not fully supported. Please select "Fee Only" as a transaction type to exclude the transaction and then add transactions by custom file manually.
- Also, as of 16th Mar 2023, we have temporarily suspended support for ERC1155 at Avalanche.
- We've identified an issue where certain Avalanche transaction history information is not available through the API. Our development team is working on a solution, but we can't provide a specific update schedule. If urgent, consider manually editing the transaction history using convert function or excluding it in the DeFi overview and adding necessary details using a custom file.
Contents:
2.2 Giving away the NFT you created
2.3 Selling the NFT you created
4. Free minting, airdrops, giveaways
1. How to upload NFT Trades
With the following method, the pnl for the NFT trades themselves, and the pnl for the cryptocurrency used to trade the NFT can be calculated.
For NFTs, please use custom coins to create a custom file (*). Custom file formats can be downloaded from this link. In the below, we outline an example of custom file entries for an NFT called "ABC".
(*) In the case of DeFi, for NFTs, please use DeFi tokens.
1.1 Buying NFTs
Example: You bought an NFT called ABC and paid 0.5 ETH. As a fee, you paid 0.01 ETH.
| Timestamp | Action | Source | Base | Volume | Price | Counter | Fee | Fee Ccy | Comment |
| Transaction datetime | BUY | Any | USER-ABC | 1 | 0.5 | ETH | 0.01 | ETH | Any |
Example: You bought an NFT and paid 3,000 JPY. As a fee, you paid 500 JPY.
| Timestamp | Action | Source | Base | Volume | Price | Counter | Fee | Fee Ccy | Comment |
| Transaction datetime | BUY | Any | USER-ABC | 1 | 3000 | JPY | 500 | JPY | Any |
1.2 Selling NFTs
Example: You sold an NFT called ABC and received 0.6 ETH. As a fee, you paid 0.01 ETH.
| Timestamp | Action | Source | Base | Volume | Price | Counter | Fee | Fee Ccy | Comment |
| Transaction datetime | SELL | Any | USER-ABC | 1 | 0.6 | ETH | 0.01 | ETH | Any |
2. How to upload NFT minting
2.1 Minting your own NFT
Example: You created (minted) your own NFT called ABC and paid 0.1 ETH.
| Timestamp | Action | Source | Base | Volume | Price | Counter | Fee | Fee Ccy | Comment |
| Transaction datetime | BUY | Any | USER-ABC | 1 | 0.1 | ETH | 0 | JPY | Any |
2.2 Giving away the NFT you created
Example: You created a digital artwork, minted it as an NFT, and gave it away for free.
ANSWER: According to NTA's FAQ, no tax liability arises from this scenario.
* If a corporation created a digital artwork, minted it as an NFT and gave it away for free, then it will be subject to corporate income tax.
* Please note that if you receive NFT as a gift, you may be subject to gift tax.
2.3 Selling the NFT you created
Please create the custom file entry as described in 1.2 Selling NFTs above.
3. Swapping NFTs
As of July 27, 2023, there are no clear guidelines on how such cases should be treated. Please consult your own tax adviser and your local tax office for guidance. We have also consulted our tax advisors who have expert knowledge in cryptocurrency assets and they suggested the below as one option for processing such a scenario.
Example: You swapped NFT ABC with NFT DEF (i.e. you bought NFT DEF for the price you sold NFT ABC).
| Timestamp | Action | Source | Base | Volume | Price | Counter | Fee | Fee Ccy | Comment |
| Transaction datetime | SELL | Any | USER-ABC | 1 | (*1) | JPY | 0 | JPY | Any |
| Timestamp | Action | Source | Base | Volume | Price | Counter | Fee | Fee Ccy | Comment |
| Transaction datetime | BUY | Any | USER-DEF | 1 | (*1) | JPY | 0 | JPY | Any |
(*1) For cryptocurrencies, the price is usually set to the market price. For NFTs, please note that how to calculate the market price is at your discretion. For example, you may consider using the average purchase price for the NFT, or the floor price of a similar NFT collection.
4. Free mints, airdrops, giveaways
As of July 27, 2023, there are no clear guidelines on how free mints, airdrops, and giveaways should be treated. Please consult your own tax adviser and your local tax office for guidance. Please refer below as one of the options for processing such scenarios.
- A free mint, as we understand it, is the act of giving away the rights to digital artworks for free and the rights to mint them as NFTs. The gas fee is paid by the recipient, and the recipient needs to mint them as NFTs.
=> The recipient of free mints may refer to 2.1 Minting your own NFT to upload the transaction history.
- An airdrop, as we understand it, is the act of giving away digital artworks that are already minted as NFTs for free. Unlike free mints, the distributor mints the digital artworks as NFTs and distributes them. The gas fee is paid by the distributor.
=> The recipient of airdrops may refer to how BONUS is uploaded for cryptocurrencies. (*1) Please choose the price at your discretion.
| Timestamp | Action | Source | Base | Volume | Price | Counter | Fee | Fee Ccy | Comment |
| Transaction datetime | BONUS | Any | USER-ABC | 1 | (*1) |
JPY*2 |
0 | JPY*2 | Any |
*2 "Counter currency" and "Fee ccy" - please make sure to input the fiat currency. If fees are incurred in cryptocurrency, please provide a separate record for LOSS history.
- A giveaway, as we understand it, is a generic term used for a project that distributes NFTs for free. Most often, it is used in the same sense as an airdrop, but it may refer to free mints and other things. Please also be mindful that there have been reports of scams and token thefts related to NFT giveaways.
5. Handling gas fees
We understand that gas fees incurred during DeFi transactions are recognized as necessary transaction fees and can be recorded as losses. In this case, you will need to upload a separate history of gas fees recorded as losses. Please refer to the help page below for instructions on how to enter this information.
6. Gas Fees Associated with DeFi transactions
*If you are using DeFi functions, all gas fees will be recognized as DEFIFEE (recorded as a loss). Currently, DEFIFEE cannot be edited.
Additionally, when uploading NFT transactions via a custom file, you can also include gas fees in the "Fees" field. In this case, the treatment of fees can either be incorporated into the average acquisition cost (Pattern A) or deducted from the realized gain or loss of the corresponding transaction (Pattern B). For more details on how to handle fees, please refer to 3. Fee handling
Example: Paid 0.5 ETH to acquire the NFT ABC and 0.01 ETH as gas fees.
| Timestamp | Action | Source | Base | Volume | Price | Counter | Fee | Fee Ccy | Comment |
| Transaction datetime | BUY | Any | USER-ABC | 1 | 0.5 | ETH | 0.01 | ETH | Any |
[Related articles]
NTA - Tax Treatment of NFTs (Japanese only)
What is the tax treatment of NFTs? How to calculate PNL and how to file tax returns (Japanese only)