EU Krak Card Tax FAQ

No, acquiring crypto with fiat and simply holding it does not, by itself, trigger tax.

In most EU Member States, you do not owe tax merely for buying crypto with fiat or for holding it as it rises or falls in value. A taxable event generally arises only when you dispose of the crypto, by selling it for fiat, swapping it for another crypto, or spending it. The rest of this FAQ focuses on those disposal events.

Yes, in most EU jurisdictions, if crypto is sold or converted to fund the transaction.

Many EU Member States treat the conversion of crypto into fiat as a disposal of the underlying cryptoasset, which can produce a taxable gain or loss. The exact characterization (capital gains, miscellaneous income, investment income, business income) varies by country.

For tax purposes, what happened is generally two things:

1. you disposed of crypto in exchange for its fiat value, and
2. you used that fiat to buy coffee.

Step 1 is usually the taxable event.

If the crypto’s value changed between when you acquired it and when you spent it, you may need to recognize a gain or loss, even on a small purchase.

No.

EU Member States have different rules. Crypto gains may be treated as:

• Capital gains
• Investment income
• Miscellaneous income
• Business income
• Or another local category

Some Member States also apply holding-period rules, exemptions, allowances, or specific tax rates. A few illustrative examples (for general orientation only, not advice, and subject to change):

• Germany: private crypto disposals are generally tax-free after a holding period of more than one year; disposals within one year may be taxable above an annual exemption threshold.
• Austria: crypto held as a private asset is generally taxed at a flat rate of 27.5%, regardless of holding period.
• France: crypto-to-crypto swaps between cryptoassets may be deferred and not taxed until the crypto is converted to fiat or used for payment, an exception to the general EU pattern.
• Italy: disposals are generally taxed as capital gains, and the LIFO (Last-In, First-Out) method is typically used to identify which lots were disposed of.

Treatment in your country is what matters, so consult local guidance or a qualified advisor.

It depends on your country.

Some Member States have exemptions, allowances, or thresholds that may exclude small or infrequent disposals; others do not. Don’t assume small everyday purchases are automatically exempt.

If your purchase is funded only with fiat (EUR or another fiat currency on your account) and no crypto is sold or converted, the purchase itself generally does not create a crypto disposal. Keep records of the purchase and any rewards.

You may have a taxable gain or loss based on the difference between the cryptoasset’s value at the time of the transaction and its acquisition value, subject to local rules.

Example (gain): You acquired 0.01 BTC for €500. Later, you use that 0.01 BTC to fund a €700 Krak Card purchase.

Example (loss): You acquired 0.01 BTC for €800. Later, you use that 0.01 BTC to fund a €600 Krak Card purchase.

How (or whether) the loss can be used depends on your country’s rules, see the question on losses below.

A stablecoin disposal is still a disposal, but if its value tracks the relevant fiat currency closely, the gain or loss may be minimal or zero.

You should still keep records.

Example: You acquire 100 units of a EUR-pegged stablecoin for €100. You later use those stablecoins to fund a €100 Krak Card purchase.

This is the most commonly misunderstood point.

A crypto-to-crypto conversion (for example, swapping ETH for a stablecoin before the card transaction) is itself generally treated as a disposal of the first asset in most EU jurisdictions, even though no fiat reached your bank account, and even if you immediately spend the result.

That means a single “swap then spend” sequence can produce two separate taxable disposals:

• the swap (ETH → stablecoin), and then
• the spend (stablecoin → fiat for the purchase).

Each needs its own gain/loss calculation.

France is a notable exception, where certain crypto-to-crypto swaps may be deferred until conversion to fiat or use for payment. This is not the general EU rule, so check your jurisdiction.

That depends on your card settings and balances.

You may set a primary funding asset, use a default funding asset, or have a fallback asset apply if the primary balance is insufficient.

Therefore, it is important to review your settings before spending, the asset used affects the tax outcome. Spending appreciated BTC generally produces a larger gain than spending a fiat currency or a stablecoin of the same fiat value.

Your transaction history will show the rate applied to each transaction, including the date and time of conversion, the amount of crypto disposed of, the fiat value, and any fees. Use those values to calculate gain or loss.

When you spend crypto held across multiple lots acquired at different times and prices, your acquisition value (cost basis) for the disposal depends on the lot relief method your jurisdiction permits or requires.

Approaches used across EU Member States include:

• FIFO (First-In, First-Out)
• Weighted average cost
• LIFO (Last-In, First-Out) — required in some jurisdictions, such as Italy
• Specific identification (including methods such as HIFO and LOFO)

Different Member States may permit, default to, or require specific methods. Some require consistency across years. Check local rules.

Kraken does not currently calculate cost basis using these methods for clients outside the United States. To compute your acquisition value, gains, and losses in line with your local rules, you will generally need to use a third-party crypto tax aggregator (such as Koinly, CoinTracker, CoinTracking, or Blockpit) and import your Kraken activity using your CSV exports or API key. Consult a tax advisor about which method is appropriate for your jurisdiction.

In many EU jurisdictions, rewards earned on qualifying card purchases are treated as a rebate or discount on the underlying purchase rather than taxable income. However, characterization can vary by Member State, and some jurisdictions may treat rewards as miscellaneous income or apply other rules.

Sign-up and referral bonuses are typically treated differently. Rewards that are not tied to a qualifying purchase (e.g., a flat sign-up bonus or a referral bonus) are more likely to be characterized as taxable income at fair market value when received. Consult local guidance or a tax advisor.

BTC rewards earned on qualifying Krak Card purchases generally follow the same characterization as fiat rewards in your jurisdiction, in many EU Member States this means rebate or discount treatment rather than income at receipt. Because crypto is property in most jurisdictions, the reward still has tax consequences when you later dispose of it, so it must be tracked.

Think of it as two stages:

• At receipt, characterization depends on local rules. In many jurisdictions, purchase-based rewards are not taxable income on receipt (rebate treatment). Regardless of the characterization, you must record the fair market value of the BTC at the moment it is credited, it becomes your acquisition value for that BTC.
• At later disposal, generally a taxable event. When you later sell, swap, spend, or otherwise dispose of that BTC, you generally recognize a gain or loss based on the difference between the disposal proceeds and the acquisition value you recorded at receipt, subject to your country’s rules on holding period, allowances, and loss use.

Example (gain on later sale): You receive €10 worth of BTC as a Krak Card reward. Later, you sell that BTC for €16.

Example (loss on later sale): You receive €10 worth of BTC as a Krak Card reward. Later, you sell that BTC for €7.

Whether and how a loss can be used (offset against gains, carried forward, etc.) depends on your country’s rules.

Sign-up and referral bonuses in crypto are typically treated differently. If you receive crypto as a sign-up or referral bonus not tied to a qualifying purchase, it is more likely to be treated as ordinary or miscellaneous income at fair market value on receipt under local rules. That same value generally becomes the acquisition value for any later disposal.

The fair market value of BTC at the time the reward is credited to your account. Even when the reward itself is not taxable on receipt under local rules, you still need this value because:

• It generally becomes your acquisition value (cost basis) in the BTC; and
• That value is used to calculate any later gain or loss when you sell, swap, spend, transfer, or otherwise dispose of the BTC.

Without a recorded acquisition value, tax authorities may treat the disposal as having zero basis, meaning the full disposal proceeds could be treated as gain.

All merchant refunds are credited back to your account in fiat, not crypto. This means the refund itself does not create a new crypto disposal.

Important to understand: the original crypto disposal that funded the purchase still stands for tax purposes, the gain or loss you recognized when the card transaction was made is not reversed by a later fiat refund. You may also see an adjustment to any rewards associated with the original purchase. Keep records of the original purchase, the refund, and any rewards adjustments.

If the ATM withdrawal is funded by selling or converting crypto, that conversion is generally a disposal. If the withdrawal is funded only with fiat, it generally is not. ATM fees, conversion fees, or fees paid in crypto may have separate consequences.

They can. Fees may affect proceeds, acquisition value, or the gain/loss calculation. If fees are paid in crypto, the fee payment may itself be a disposal in some jurisdictions. Keep records of card fees, conversion fees, spreads, network fees, ATM fees, and any fees paid in crypto.

Under the EU’s DAC8 framework (and the related global CARF standard), crypto-asset service providers are required to collect and report certain user and aggregate transaction information to tax authorities. This may include customer name, address, tax residency, tax identification number (TIN), and aggregate transaction data.

For more information concerning DAC8 and CARF, please see the FAQs below and this related support center article.

DAC8 is the EU’s tax transparency framework for crypto-assets. It requires Reporting Crypto-Asset Service Providers (RCASPs) to perform due diligence on their users and report information on crypto-asset users and aggregated reportable transactions to national tax authorities, which then exchange that information automatically across Member States.

DAC8 applies from January 1, 2026, which is the first reporting year. The first reports covering 2026 activity are due to tax authorities during 2027 (generally by September 30, 2027), after which information is exchanged between Member States.

DAC8 applies based on where you are tax resident, not where the provider is established, so it can apply to EU-resident users of non-EU platforms as well.

CARF (the OECD’s Crypto-Asset Reporting Framework) is the global standard that DAC8 implements within the EU. CARF extends the same kind of automatic information exchange beyond the EU to dozens of participating jurisdictions, so crypto activity can be exchanged between countries much as bank account information already is. DAC8 and CARF are deliberately aligned, so an EU provider’s reporting feeds into the global exchange network. For more information on CARF, please see this support center article.

No.

Transaction history, CSV exports, and statements can help you prepare your return, but they may not reflect:

• Activity on other exchanges, wallets, or self-custody accounts
• Acquisition values from external sources
• Country-specific rules, exemptions, thresholds, or holding-period treatment
• Refunds, chargebacks, or rewards adjustments outside the report period
• Your personal tax circumstances

You remain responsible for determining your obligations and filing accurate returns, and as noted above, tax authorities increasingly receive the underlying data directly.

For each crypto-funded Krak Card transaction:

• Date and time of the transaction
• Asset used and amount disposed of
• Fiat value at the time of the transaction
• Exchange rate applied
• Fees, including any fees paid in crypto
• Acquisition date and acquisition value
• Lot identification, where relevant

For crypto-to-crypto transactions (including trades made before spending):

• Date and time of the transactions
• Assets disposed of and received, and amounts
• Fiat value of each side at the time of the transaction

For rewards:

• Date credited
• Asset type (fiat or BTC)
• Fair market value when credited (sets BTC acquisition value)
• Subsequent disposal events

For refunds and reversals:

• Original transaction details
• Refund date and amount (refunds are issued in fiat)
• Any rewards adjustments

You can download your Kraken activity history, including Krak Card transactions, from your account. See the relevant Kraken support article on accessing statements and CSV exports.

Most clients outside the United States then import this data into a third-party crypto tax aggregator to calculate gains, losses, and country-specific reports. For more information on connecting to third-party tax aggregators, please visit this support center article.