NFTs and Taxes

Every country has its own tax laws around cryptocurrency and NFTs — many of which are still being formulated to catch up with the break-neck speed at which NFTs have gained popularity — so it is challenging to comment on exact tax rates and how this industry is viewed from a tax perspective across the board. However, it is very likely that if you wish to create and sell NFTs to supplement your livelihood, NFTs will be seen as inventory and you will be liable to pay taxes. ‍Minting an NFT is not a taxable event, but selling an NFT is seen as income generated. ‍Additionally, earning royalties from sales on the secondary market is also likely to be seen as earning passive income and will be treated as a taxable event. As the legislation struggles to catch up, the tax treatment of NFT sales will remain a grey area, but it is recommended that you consult a tax professional in your country before filing your returns.