SushiSwap Taxes Guide
Your SushiSwap transactions might just come with a surprise tax bill. Find out everything you need to know about how different transactions on SushiSwap are taxed in our SushiSwap Tax Guide 🍣
Do you pay taxes on SushiSwap?
Yes. You'll need to pay tax on any taxable transaction you make on SushiSwap.
In general, crypto is subject to either Income Tax or Capital Gains Tax - depending on the specific transaction you're making. This means each transaction is viewed slightly differently from a tax perspective, so let's break down each.
Do you pay tax on trades on SushiSwap?
Yes. In almost all countries, trading one crypto for another is subject to Capital Gains Tax.
You'll need to pay Capital Gains Tax on any profit you make from the trade. So for example, say you've traded WBTC for ETH - you'd need to pay tax on any profit you've made from your WBTC.
To figure this out, just subtract your cost basis (how much it cost you to acquire the asset plus fees) from the fair market value of the crypto on the day you bought it. If the price of the asset has increased, you have a capital gain and you'll pay Capital Gains Tax on that amount.
Do you pay tax on adding and removing liquidity on SushiSwap?
Like we said, there's no clear guidance from the IRS or just yet on adding and removing liquidity from a tax perspective which is causing a lot of confusion among investors as to whether to report these transactions.
However, when you add liquidity on SushiSwap, you'll get an SLP token in return. Similarly, when you remove liquidity on SushiSwap, you'll exchange your SLP token in return for your original capital. This could be seen as trading one token for another - even if you're only realizing a gain when you trade your SLP token(s) back - therefore it could be subject to Capital Gains Tax.
Do you pay tax on liquidity pool tokens on SushiSwap?
Like we said above, there's no clear guidance from the IRS (or other tax offices) on LP tokens from a tax perspective. What it all comes down to is how the specific DeFi protocol you're using works.
You don't earn new liquidity pool tokens on SushiSwap - instead the value of your liquidity pool token increases when trades are made in the pool you've added to. In this sense, you're not earning new tokens so it's unlikely this is going to be seen as income and subject to Income Tax.
It's only when you withdraw your original capital by trading your liquidity pool token back that you'll have a realized gain. This suggests the taxable transaction would be the token trade when you're removing liquidity - which could be subject to Capital Gains Tax.
Do you pay tax on staking SLP tokens on SushiSwap?
The IRS has not yet issued clear guidance on staking rewards tax. However, many other crypto rewards - like mining and referral bonuses - are subject to Income Tax at the point you receive them as you're earning new coins/tokens.
When you stake SLP tokens (or KMP tokens), you earn SUSHI tokens. You can harvest these rewards at any point. This would suggest that you'd need to pay Income Tax on your SUSHI based on the fair market value at the point you receive it.
Do you pay tax when you stake SUSHI on SushiSwap?
Yes - it's likely you'll need to pay tax on staked SUSHI tokens. However, due to the way the SUSHI staking protocol works, it's likely this would be Capital Gains Tax, not Income Tax.
When you stake your SUSHI tokens, you'll receive XSUSHI tokens in return. Like with SLP and KMP tokens, XSUSHI tokens grow in value, instead of you earning new tokens. So you'll only realize a gain when you unstake your SUSHI tokens by exchanging your XSUSHI tokens back. This would be more akin to a crypto to crypto trade and therefore subject to Capital Gains Tax.
Do you pay tax on lending on SushiSwap?
There is no guidance from the IRS on any DeFi lending protocols, so we can only interpret the current tax rules and infer how lending on SushiSwap might be treated from a tax perspective.
When you lend on SushiSwap, you'll receive KMP token(s) in return. These KMP tokens then grow in value based on the APR collected through lending. Similarly, when you want your original capital and returns, you'll trade your KMP token(s) back.
So even though you're not disposing of your asset, these transactions could be interpreted as crypto to crypto trades and therefore subject to Capital Gains Tax.
Do you pay tax on staking KMP tokens on SushiSwap?
Like with SLP tokens, you can stake KMP tokens to earn SUSHI tokens. Because of the way you earn SUSHI tokens - as in you earn new tokens you can harvest at any point - this would suggest these earnings could be subject to Income Tax.
Do you pay tax on borrowing on SushiSwap?
It's not clear how borrowing on DeFi protocols is seen from a tax perspective.
You need to provide collateral on SushiSwap to borrow - but many would argue this is not a disposal and therefore cannot be subject to Capital Gains Tax. Similarly, the tokens you borrow could be seen as more similar to an acquisition which is tax free. However, transactions you make with your borrowed tokens may be subject to tax.
Do you pay tax when you wrap XSUSHI for MEOW on SushiSwap?
It is likely this transaction could be seen as a crypto to crypto trade, even if you can get your asset back at any point. This means it could be subject to Capital Gains Tax.
Do you pay tax when using the Inari tool on SushiSwap?
Again - there's no tax guidance on one-click yield farming strategies (shockingly), so we have to look at how you earn and how rewards are paid out for an idea of how taxes may work.
When you use the Inari tool, you're staking SUSHI for xSUSHI - which is lent out through different protocols. You realize your gain when you trade your XSUSHI back for SUSHI. This is more akin to a crypto to crypto trade, which means it could be subject to Capital Gains Tax.
Do you pay tax on NFTs on Shoyu marketplace?
You can make a few different transactions on SushiSwap’s NFT marketplace Shoyu - so let’s break it down.
Buying an NFT on Shoyu: As you’re buying your NFT with WETH, SUSHI or USDC - this is likely to be seen as a crypto to crypto trade and subject to Capital Gains Tax.
Selling an NFT on Shoyu: As you’re receiving WETH in exchange for your NFT, this is likely to be seen as crypto to crypto trade and subject to Capital Gains Tax. However, if you’re minting and selling multiple NFTs - like a business - this could be seen as a kind of additional income and subject to Income Tax.
Minting an NFT on Shoyu: Only whitelisted accounts - so specific creators - can mint NFTs on Shoyu. Minting an NFT generally comes with a fee, which will usually be in crypto i.e. SUSHI. This could be seen as spending crypto which is subject to Capital Gains Tax. However, it is also highly likely this could be added to part of your cost basis for the NFT - making it tax deductible.
What do I need to report to my tax office?
It depends on where you live - each tax office has different reporting requirements for crypto.
In the US, you need to report each taxable crypto transaction on Form 8949, including:
A description of the asset
The date you acquired the asset
The date you disposed of the asset
The sale price at fair market value
The cost basis of the asset at fair market value
Your capital gain or loss
You’ll also need to report your net capital gain and loss on Schedule D and any crypto income on Schedule 1 and potentially Schedule C.
If you’re an active trader on SushiSwap and utilizing the farming and staking opportunities, the list of transactions you need to report can quickly ramp up into the thousands per financial year. You’ll need good records of all your transactions on SushiSwap with all the information - you can do this manually or with a crypto tax app. Let’s look at both.
How to do your SushiSwap taxes
You need your SushiSwap transaction history to get started with your SushiSwap taxes. There’s two ways you can do this.
Use crypto tax software and connect to SushiSwap via API. Connect the wallet you use to interact with SushiSwap to your chosen crypto tax app through API. This will automatically import your SushiSwap transaction history to your app, identify your taxable transactions and calculate your capital gains, losses and income.
Create a CSV file of your SushiSwap transaction history. You can’t download a CSV file from the SushiSwap platform directly, so the only way to get a CSV file is to create one yourself. You can use third party tools like BSCscan and Etherscan to download a CSV file of your transaction history on a given blockchain too. You can then use this CSV file to identify your taxable transactions, capital gains, losses and income yourself.
Learn how to connect SushiSwap to Koinly in minutes.
Does SushiSwap provide a tax report?
No. SushiSwap doesn't provide a tax report - even if it did it would only cover your SushiSwap taxes and most crypto investors are using multiple platforms, so the tax report would be redundant.
Instead, you can get your SushiSwap tax report by importing your SushiSwap transaction history into a crypto tax app using API.
Does SushiSwap supply a financial statement?
No. SushiSwap doesn’t supply a financial statement.
How to generate a SushiSwap tax form
There’s two ways you can do this depending on whether you’re using crypto tax software or not so we’ll look at both.
If you’re doing your taxes yourself, you need a complete transaction history from SushiSwap for the financial year. As we said, there's no easy way to get this so your best bet is creating a custom CSV file yourself. You’ll then need to identify each taxable transaction, the subsequent income or capital gain/loss and report this to the IRS using Form 8949 for capital gains and losses, Schedule D for net capital gains and losses and Schedule 1 for crypto income (and potentially Schedule C too for income).
Alternatively, use a crypto tax app and skip all the spreadsheets and math. All you need to do is sync your SushiSwap transactions using the API. Your crypto tax app will then identify your taxable transactions and calculate any capital gains, losses and income for you. You can then download a tax report specific to your location to hand over to your tax office - for example, you can download a pre-filled Form 8949 and Schedule D.
SushiSwap CSV export
SushiSwap doesn't offer a CSV file export option. The best way to get a complete CSV file of your SushiSwap transaction history is to create one yourself. You can use third party services like BSCscan and Etherscan to download a CSV file of your transaction history on a given blockchain.
SushiSwap tax API
The easier option is to use an API to get your SushiSwap transaction history automatically imported into a crypto tax app.
All you need to do is sync the wallets you use to interact with SushiSwap. So for example, if you use MetaMask to interact with SushiSwap, you just need to sync your MetaMask wallet with your crypto tax app using the API. We've got instructions on how to get your API keys for the most popular SushiSwap wallets on our integration pages. Once you’ve got your API keys, enter them into your chosen crypto tax app and it’ll calculate your SushiSwap taxes for you and generate your tax report.
You might also find our help guide on integrating DeFi platforms with Koinly helpful.
Does SushiSwap report to the IRS?
Anonymity is a key tenet of DeFi - so like most other DeFi protocols, SushiSwap doesn't have a KYC verification process. For more detailed information, read our guide on the best no KYC exchanges.
Most of the wallets you'll use to interact with SushiSwap also don't have a KYC process - so you might think you're in the clear. However, you'll need to link a card to many of these wallets. If you've got transactions from your bank account linking you to crypto activities, the IRS is going to want to know about it.
Similarly, if you're moving assets between SushiSwap and centralized exchanges - these centralized exchanges have seen a lot of pressure from the IRS to share KYC information to ensure tax compliance.
The best way to stay tax compliant is to report your crypto taxes accurately.
Koinly is a SushiSwap tax calculator & reporting tool
If you’ve been wondering is Koinly a SushiSwap tax calculator tool, the answer is, yes! Not only can Koinly import SushiSwap transaction history, but Koinly can also calculate your SushiSwap taxes in a format that makes sense for your country’s tax office.
As a SushiSwap tax calculator, Koinly is able to do a bunch of impressive tasks that save you time and can even save you from paying too much taxes.
Koinly will import all your SushiSwap trades including purchases, sales, swaps, income, and more!
Koinly will then convert your SushiSwap transactions into your country’s currency, at fair market value. This in itself is a massive time saver.
Finally, Koinly works out which of your SushiSwap trades are taxable, and which are not - calculating your SushiSwap gains/losses, crypto income, and more. All of this is really important for being able to submit an accurate SushiSwap tax return to your tax office.
