Deriv questionsUpdated 2 min readBy the FXNOD team
Do you pay tax on trading profits?
In most countries trading profits are taxable, but how depends entirely on where you are resident: as capital gains, as income, as business profit, or in some places as gambling winnings that are not taxed. An offshore broker does not change your obligation at home. Keep complete records and ask a qualified tax adviser in your country.
How profits are usually classified
| Classification | Typical treatment | Tends to apply when |
|---|---|---|
| Capital gains | Taxed on net gains, often with an allowance | Occasional trading of assets |
| Income | Taxed at your income tax rates | Frequent trading, or derivatives in some countries |
| Business profit | Taxed as a trade, with expenses deductible | Trading is your main, organised activity |
| Gambling or betting | Sometimes not taxed | Certain products in certain countries only |
The same activity can fall into different rows in different countries, and sometimes in the same country depending on scale. This is why general answers online are unreliable.
Things that are true almost everywhere
- Tax follows your residence, not the broker's location.
- It is usually the net result for the tax year that matters, after losses.
- Withdrawing or not withdrawing rarely changes whether a profit is taxable.
- Crypto used for deposits can create its own taxable events.
- Brokers may report to tax authorities under international information-sharing rules.
Records to keep
- Every statement from your broker, for each account.
- Deposits and withdrawals, with dates and amounts in your home currency.
- Fees, and any costs directly related to trading.
- A yearly summary of net profit or loss.
Losses
In many systems trading losses can be set against gains, and sometimes carried forward. In systems that treat an activity as gambling, losses usually cannot be claimed. Ask before assuming either.
With a bot
Automation does not change the tax position. A bot can produce thousands of trades, which makes good records more important: download statements regularly instead of reconstructing a year at the end.
Where to find your trades
Your broker's statement is the complete record. On Deriv that is the Statement in the Reports section. FXNOD shows the trades made through FXNOD, and trades it places are on your Deriv account and so appear in Deriv's records too. FXNOD does not give tax advice or file anything for you.
Questions people ask
- Do I pay tax if I trade with an offshore broker?
- Your obligation is set by where you are tax resident, not by where the broker is.
- Do I pay tax if I do not withdraw?
- In most systems tax is due on the profit made in the year, whether or not it was withdrawn. Check your own rules.
- Can I deduct trading losses?
- Often against trading gains, depending on how your country classifies the activity. An adviser can confirm.
Use your Deriv account from FXNOD
FXNOD is an independent terminal for your own Deriv account. You sign in on Deriv's page, your balance stays at Deriv, and you can trade by hand or run a bot. Start on the demo account.
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