Kraken Taxes 101: Reporting, Rules, and Tools

Tax season can be stressful enough, and crypto adds another layer of complexity. Kraken taxes remain a major concern, with many traders unsure how to report gains, staking rewards, or airdrops. In a 2025 Kraken survey, nearly half of respondents reported issues with crypto tax filing, and over a third cited complexity as their top challenge.

Naturally, this raises one pressing question: Does Kraken report taxes to the authorities? The answer directly affects how traders prepare their filings. Yet confusion lingers, with the same survey showing that nearly 90% of crypto holders felt unclear about at least one part of their obligations. Regulators are aware, but guidance often arrives slower than traders would like.

So let’s clear things up and break down how Kraken handles tax reporting, the tools available to users, and key points to keep in mind before your subsequent filing.

Did you know?

Want to get smarter & wealthier with crypto?

Subscribe - We publish new crypto explainer videos every week!

What is Shiba Inu Coin? (Explained with Animations)

SUBSCRIBE

ON YOUTUBE

Does Kraken Report Taxes?

Let’s start with the basics: Kraken is a regulated exchange, which means it must follow the rules of every country where it operates. In practice, this often involves collaborating with tax authorities and sharing the necessary information to enforce compliance. Put simply, when I talk about Kraken taxes, I’m referring to how the platform balances user activity with government regulations.

In the United States, for example, Kraken issues 1099 forms to eligible customers. These forms facilitate the tracking of taxable events and their subsequent reporting to the IRS. Over in the European Union, the United Kingdom, and Canada, the exchange follows similar requirements. The details differ, but the principle remains the same:

Exchanges must disclose certain account and transaction data if local laws require it.

Additionally, Kraken may also share information in response to court orders or lawful requests from regulators. In practice, this could involve anti-money laundering checks, sanctions enforcement, or fraud investigations. The bottom line here is that your activity on Kraken is not invisible to the authorities, especially in jurisdictions with strict reporting obligations.

Altogether, Kraken follows global financial regulations by disclosing user data when legally required. That doesn’t mean every trader automatically gets reported, but it does mean you should be prepared to include your activity when filing taxes. In a later chapter, I'll dive into how different countries handle crypto taxation, so you’ll know what to expect where you live.

📚 Read More: Kraken Review

The Most Liked Findings

Looking for more in-depth information on related topics? We have gathered similar articles for you to spare your time. Take a look!

Cryptocurrencies

15 Best Meme Coins to Buy Now

Cryptocurrencies

Layer-1 Crypto List: From Bitcoin to Solana and Beyond

Exchanges

Coinbase Taxes Explained

How to Do Your Kraken Taxes

So, what does it actually mean to handle taxes on Kraken? In simple terms, it comes down to reporting every taxable event linked to your account. This includes capital gains from selling or trading, income earned through staking, and even rewards or airdrops that appear in your balance. Each of these activities must be declared in accordance with your local tax laws.

Now, when people ask "how to do your Kraken taxes?", the process usually starts with gathering all their transaction data. Both Kraken and Kraken Pro provide this data, but in slightly different ways. Kraken keeps it simple with records of basic buys and staking, while Kraken Pro provides more detailed information on various order types.

Having a complete log ensures you are not missing anything that could trigger a tax review later. In fact, there are built-in tools, like the Document Center, that make it easier to access account statements and reports. I’ll show you how to open and export those in the next chapter.

Once the records are in hand, the next step is calculating your gains and losses. This part can be tricky, especially when transactions accumulate across multiple trading pairs. Short-term gains, long-term gains, and income must be separated clearly. For many users, manually working through these numbers can feel overwhelming.

That is why tax software is beneficial in this situation. Instead of trying to crunch everything in spreadsheets, you can upload your Kraken Pro taxes data to a tool like Crypto Tax Calculator and let the software handle the math.

Later on, you’ll see in the tutorial section that there are three ways to connect Kraken:

• OAuth;
• API;
• CSV upload.

Each method pulls your transaction data into the calculator so it can generate compliant reports.

Finally, the last step is filing with your tax agency. Whether it is the IRS, HMRC, the CRA, or another authority, the reports you generate from your exported data or tax calculator will guide you.

How to Open and Access Kraken Tax Reports

Before you can calculate your Kraken taxes, you need to gather your records. The exchange offers multiple ways to export transactions and reports, but, as I mentioned earlier, the steps can differ slightly between Kraken and Kraken Pro.

On the regular Kraken platform, you’ll find basic reports such as your account statements and balance summaries. Kraken Pro, on the other hand, offers more advanced export options, including your whole ledger and trade history. These records are essential for detailed tax reporting.

All of these files are managed through the Document Center, a centralized hub where you can generate exports or download account-related documents. In the Document Center, you’ll see two categories:

• Exports. On-demand files you create (account statement, balances, ledger history, trades).
• Account documents. Pre-generated files such as monthly statements, tax forms (where available), and occasional regulatory reports.

Now that you know where your records live, it’s time to connect your data with a tax tool.

Connecting Kraken to Crypto Tax Calculator

Kraken doesn’t calculate taxes directly, but lets you export or sync your transactions. Linking your account to a crypto tax calculator (CTC) allows automatic import of trades and staking rewards, simplifying tax report preparation. So, here are the three ways to connect Kraken with CTC:

Uploading Transactions via OAuth

If you want the simplest method with almost no setup, OAuth is the best option. It creates a direct link between Kraken and CTC, letting your data sync instantly without generating files or keys.

Here’s how to connect with OAuth:

Uploading Transactions via API Connection

If you prefer a slightly more technical setup that allows for continuous syncing, an API connection is a reliable option. This involves generating API keys on Kraken Pro and importing them into CTC.

Generate API Keys on Kraken Pro

API keys serve as a secure bridge, enabling CTC to access your transaction history without exposing your login credentials. Let me show you how to generate them:

• Query;
• Query closed orders & trades;
• Query ledger entries.

Import API Keys into Crypto Tax Calculator

After generating your keys, the next step is to link them to your crypto tax calculator account, allowing the system to automatically sync your trades.

With the import complete, your Kraken Pro account is now connected, and your trade data will be available in the calculator.

Uploading Transactions via CSV File

For users who prefer working with files or require a backup method, CSV exports offer a reliable way to transfer Kraken data into the CTC.

Export CSV from Kraken Pro

CSV files offer a more manual approach, but they provide complete visibility of your records before importing. Here’s how you can download your Kraken Pro data as a CSV:

Import CSV to Crypto Tax Calculator

After generating your CSV file from Kraken Pro, the next step is to upload it to the CTC. The platform will read your trades, deposits, withdrawals, and staking activity to calculate accurate taxes. Here’s how to do it:

All done! You can now upload historical data at once or store extra backups of your trades. With everything in place, your Kraken Pro taxes are organized and ready for review.

Country-by-Country Kraken Taxes Guide

Tax rules can vary significantly depending on your location, and Kraken supports users across multiple regions. To make things clearer, I’ll break down the Kraken tax guidelines for some key countries and territories.

United States

The IRS has classified digital assets as property since 2014, meaning most crypto activities fall under capital gains or ordinary income tax. US crypto regulations make the holding period a major factor for traders.

Short-term gains are taxed at standard income brackets, while long-term gains are capped at 20%. Staking, mining, and airdrop rewards, on the other hand, are treated as ordinary income.

Table: Kraken taxes overview in the United States

In practice, this means your crypto tax outcome depends on both your activity and your timing. For example, rewards from Kraken staking services must be reported as income when you gain control over the assets, following IRS Revenue Ruling 2023-14. The fair market value at the time you receive the tokens establishes the taxable amount.

For income, digital asset activities are reported on Form 1040, with additional schedules applying in special cases, such as self-employment or nonresident status. Notably, the IRS has added a direct digital asset disclosure question to the first page of the 1040, requiring every taxpayer to declare whether they engaged with cryptocurrency during the year.

Failing to comply carries serious risks. Late filings and underreporting can trigger penalties, while deliberate evasion may lead to criminal charges. On the other hand, strategic planning, such as holding assets longer than a year or donating to charities, can help reduce liabilities.

Canada

The Canada Revenue Agency (CRA) makes a key distinction between capital gains and business income. For most retail investors, taxes on Kraken trades are subject to capital treatment, where only half of the profit is taxable.

However, for those who trade frequently or in a professional capacity, the CRA may treat the activity as business income. To put it another way, the full amount is subject to income tax. The CRA determines this classification on a case-by-case basis, weighing factors such as repetition, commercial intent, and whether the activity resembles a business operation.

Table: Kraken taxes overview in Canada

The way you calculate gains and losses is also unique compared to other countries. Canada uses the average cost basis method, which means that rather than tracking the original cost of each coin individually, you determine an adjusted cost base across all units of the same asset.

For instance, if you acquired multiple BTC at different prices, you add up the total cost (including fees) and divide it by the number of coins you hold. This provides a blended figure used to calculate gains or losses when you dispose of the asset.

A further complication is the superficial loss rule, designed to prevent taxpayers from engineering losses. If you sell crypto at a loss and reacquire the identical property within 30 days, the loss will be disallowed. As a result, timing disposals is crucial for anyone considering tax-loss harvesting as part of their strategy.

Another important detail is the new rule for large investors. For annual gains above CAD 250,000, the CRA now requires two-thirds of the amount to be included as taxable income, up from the usual half. This higher inclusion rate significantly changes the effective tax liability for high-volume traders and long-term holders, resulting in substantial profits.

Kraken crypto taxes in Canada often involve complex calculations. To simplify the process, many investors use crypto tools that integrate with Kraken and automatically apply the average cost basis along with the superficial loss rule.

Penalties for missed or inaccurate reporting can be severe. The CRA enforces compliance through audits, reassessments, and financial penalties that escalate rapidly for late or incorrect filings. On the positive side, proactive planning, such as contributing to a Registered Retirement Savings Plan (RRSP) or carefully timing disposals, can help offset tax exposure and reduce the final bill.

📚 Read More: Best Crypto Tools

Did you know?

Want to get smarter & wealthier with crypto?

Subscribe - We publish new crypto explainer videos every week!

How to Learn Crypto The Easy Way? (Trending Beginners' Strategy)

SUBSCRIBE

ON YOUTUBE

United Kingdom

The UK takes a structured approach to taxing crypto, with HMRC treating it as property that can either generate capital gains or be taxed as income. For most Kraken users, the primary concern is how transactions are classified for tax purposes.

Selling assets for pounds, swapping one token for another, spending crypto on goods, or gifting it to anyone other than a spouse or civil partner all count as taxable disposals. Each of these triggers the need to calculate a gain or loss, which is a central part of doing your taxes on Kraken in the UK.

Table: Kraken taxes overview in the United Kingdom

To determine gains, the UK does not simply apply the first-in, first-out accounting method. Instead, HMRC applies a “pooling” system that groups tokens of the same kind into one pool and assigns them an average cost basis. This prevents selective selling at favorable prices and ensures consistent tax treatment.

There are also special rules, such as the same-day rule and the thirty-day “bed and breakfasting” rule, which apply when you sell and repurchase assets within tight timeframes. Together, these rules shape how Kraken trades must be reported on your tax return.

HMRC also distinguishes between regular investors and those trading as a business. Individuals who trade at scale, frequently, and with commercial intent may be classified as businesses, affecting how their profits are taxed.

In such cases, profits are taxed as trading income rather than capital gains. This classification is rare for most retail investors, but it is worth noting for those with high Kraken volumes or those who run crypto as a primary source of livelihood.

Pros

• Secure and reliable
• Accepts fiat currencies
• Lots of trading options

Main Features

• Reputable exchange
• Accepts fiat currencies
• Offers various trading options

Visit Site

Pros

• Beginner-friendly
• Secure
• Decent trading and withdrawal fees

Main Features

• Crypto.com Visa Card
• Automated tools & bots
• Ecosystem synergy with CRO

UP TO 1 BTC IN CRO

Pros

• Accepts fiat currencies
• Simple to use
• Supports only trusted cryptocurrencies

Main Features

• A leading cryptocurrency exchange platform
• Best for all type investors
• Accepts fiat currencies

GET $200 REWARD

EU Countries

The rules for Kraken taxes vary across Europe. Each country sets its own financial year, deadlines, and tax treatment for crypto gains and income. While the European Union works toward greater harmonization, investors must still comply with the specific rules of their local tax authority.

Spain

Spain has one of the most complex crypto tax frameworks in Europe, primarily due to the fact that taxation depends on both the type of activity and the region where it is conducted. The Agencia Tributaria (AEAT) classifies cryptocurrencies as capital assets, which means you’ll pay Savings Income Tax when selling crypto for euros, trading for another coin, or disposing of NFTs.

Table: Kraken taxes overview in Spain

Tax rates range between 19% and 28%, depending on your total profits for the year. You can also offset losses against future gains for up to four years, which provides some flexibility for active traders. For more complex activities such as staking or mining, the AEAT expects you to report income at general rates, which can climb as high as 47%.

On top of that, Spain imposes a regional wealth tax. Most regions start taxing net wealth above €700,000, although Madrid and Andalusia waive the tax as of writing. Inheritance and donation taxes may also apply to gifted or inherited crypto, with rates depending on your local community.

Reporting Kraken exchange taxes is usually completed through AEAT’s Renta Online system. You’ll need to use different forms depending on your activities, such as Box 1804 for disposals, Box 0031 for staking rewards, and Box 0178 for mining income.

📚 Read More: Kraken Staking Complete Guide

Germany

Germany’s tax system is unusual because it treats crypto like private money rather than a capital asset. HMRC’s counterpart, the Bundeszentralamt für Steuern, applies a simple rule: crypto held for more than twelve months can be sold completely tax-free.^[1]

The long-term exemption has made Germany an attractive location for long-term investors. However, if you sell within a year, you’ll need to declare the profit as “other income”, taxed at your personal Income Tax rate of up to 45%.

Table: Kraken taxes overview in Germany

There is a small relief, though: if your total short-term crypto profits stay under €600 for the year, you don’t need to report them. Staking and lending rewards, however, fall under different rules. These are generally taxed as income and may extend your holding period to 10 years before the disposal can become tax-free.

Italy

Italy introduced more formalized rules for crypto in 2023, setting a flat 26% tax on capital gains. The €2,000 exemption threshold has been abolished starting January 1, 2025, so all gains are now subject to tax. From January 1, 2026, the rate will increase to 33% under the 2025 budget law.

Table: Kraken taxes overview in Italy

Small investors may owe little or nothing, while larger portfolios can face significant tax obligations. Taxable events include selling for fiat currency, exchanging cryptocurrencies, and spending cryptocurrency on goods or services.

Alternatively, taxpayers can opt for an 18% portfolio tax on the value of crypto held as of January 1, which can serve as the cost basis (per Article 1, Paragraph 133 of the 2023 Budget Law).

Staking and mining are generally treated as miscellaneous income and added to your taxable base. These earnings are not eligible for the €2,000 exemption and must be reported in full. Italians are also required to report their crypto holdings in the Quadro RW, which is used to declare foreign assets and ensure compliance with anti-money laundering obligations.

France

France applies a flat tax regime to individual crypto investors. The 30% rate, known as the “Prélèvement Forfaitaire Unique” or PFU, combines both Income Tax and social contributions into a single levy.

The tax applies whenever crypto is sold for euros or used to pay for goods and services. However, trading crypto for crypto is not a taxable event, which is advantageous for active traders who keep their gains locked within digital assets.

Table: Kraken taxes overview in France

Professional or high-frequency traders may fall under the category of “trading as a business”. In these cases, profits are subject to the standard progressive Income Tax scale, which can be significantly higher than 30%.

French taxpayers must also declare disposals using Formulaire 2086 alongside their annual return. There’s also a separate requirement to declare any foreign accounts used to hold crypto, including exchanges like Kraken, via Form 3916-BIS.

Non-disclosure can lead to hefty penalties, which is why accuracy is crucial. A tax calculator can simplify the process by handling Kraken crypto taxes in detail, helping you stay compliant with both reporting rules and account disclosures.

📚 Read More: Best Crypto Tax Calculator

Common Mistakes to Avoid in Kraken Taxes

Even when you understand the basics of how to do your Kraken taxes, small mistakes can add up quickly and create costly issues down the line. Many of these errors are avoidable with the proper preparation. Here are the most common pitfalls to watch out for:

• Mismanaging Cost Basis. Every transaction needs an accurate cost basis to calculate gains or losses. Failing to record purchase prices and fees can distort your numbers and make your report inaccurate.
• Overlooking Small Trades or Rewards. Even small trades, referral bonuses, or staking rewards count as taxable events. Overlooking them may seem harmless, but could create discrepancies during an audit.
• Triggering Wash Sales. Buying back the same asset too soon after selling may invalidate your loss claim under specific rules. Regulators, like HMRC, pay close attention to these transactions, making careful timing essential.

• Not Reconciling Wallet Activity. Kraken may not capture every external wallet activity. Failing to align both records can leave gaps in your report and understate or overstate your taxable income.
• Ignoring Tax-Loss Harvesting. Harvesting unrealized losses before year-end can significantly reduce your tax bill. Failing to adopt this strategy may result in missing legitimate opportunities to reduce liability.^[2]
• Skipping Professional Advice. Complex cases involving advanced trading, DeFi, or large portfolios often need expert input. Working with a tax professional helps ensure compliance and prevents costly errors.

Avoiding these mistakes makes handling Kraken taxes smoother and less stressful. With thorough documentation, careful planning, and professional support when needed, you can file with confidence and stay focused on your investments.

The Most Trending Findings

Browse our collection of the most thorough Crypto Exchange related articles, guides & tutorials. Always be in the know & make informed decisions!

Comparisons

Stellar VS Ripple: What's The Better Choice?

Cryptocurrencies

SiaCoin Price Prediction: 2025 and Beyond

Cryptocurrencies

NEM Price Prediction: Is NEM a Good Investment?

Conclusion

Filing Kraken taxes may look complicated at first, but once you understand the rules, the process becomes much more manageable. The key lies in maintaining accurate records and using the right tools to simplify calculations.

Tax rules differ by country, meaning that what applies in the United States, the United Kingdom, or specific EU nations may not be applicable in other jurisdictions. Hence, staying updated with local regulations and ensuring that your reporting aligns with the expectations of tax authorities is critical. Using a crypto tax calculator or consulting a professional can help reduce errors and give you more confidence in your filing.

The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.

Scientific References

1. Macedo, A., Rocha, M., Alcoforado, A. Braun, M., McNaughton, C. Scheller, P., McNaughton, C. P., Mendes, R. V., Gomes, D. P., Nunes, R., Gomes, E. P., Silva, T., Ozai, I., Tiemann, T., Saran, J. E. P.: ‘Chapter V: Taxation of the Digital Economy’;

2. Aw, E. N. W., Chen, S., Dornick, C. R., Jiang, J. Q.: ‘The Art of Losing in Investing: Harvesting Tax Losses for a Positive Impact’.