Belgian tax on DeFi: liquidity pools, lending, yield farming and swaps explained. What is taxable and how does Cryptotax handle it?
How are DeFi transactions taxed in Belgium
DeFi (Decentralized Finance) encompasses financial services that operate via smart contracts on a blockchain, without the involvement of a bank or central exchange. Think of swapping on Uniswap or Curve, lending via Aave or Compound, providing liquidity, restaking via EigenLayer or yield farming via Pendle and Beefy. Each of these activities has its own tax treatment, and Cryptotax recognises them automatically based on your on-chain transactions.
What is DeFi
Instead of an intermediary, the blockchain itself handles settlement. You retain control over your own wallet and interact directly with the protocols. Popular examples include Uniswap, Curve and SushiSwap (swaps and liquidity), Aave, Compound and Morpho (lending), Lido and EigenLayer (staking and restaking), and Pendle and Beefy (yield).
Which DeFi activities does Cryptotax recognise automatically
You only add your public wallet addresses on Ethereum, Base and Arbitrum. Cryptotax reads the full on-chain history and places each interaction in the correct tax category:
- DEX swaps on Uniswap, Curve, SushiSwap, CoW Protocol and aggregators such as 1inch and LiFi.
- Lending and borrowing on Aave (V2/V3), Compound (V2/V3), Morpho, MakerDAO and Spark, including receipt tokens (aTokens, cTokens) that are recognised as continuity of your position.
- Liquidity pools on Uniswap, Curve, SushiSwap and Beefy: deposits, trading fees and withdrawals.
- Staking and restaking via Lido, EigenLayer, Swell and Symbiotic.
- Yield farming on Pendle, Beefy and Curve, where every growth in your balance is recorded as a reward.
- Bridges such as Across, Stargate, Wormhole, Hop, LiFi and the official L2 bridges: incoming and outgoing transfers are automatically linked to each other so that your cost basis remains intact.
Warning
The Belgian tax treatment of DeFi transactions has not yet been fully established in legislation or published administrative positions. The information below is based on the common interpretation by Belgian tax experts, but may be subject to change. Consult a tax adviser for complex or substantial DeFi activity.
Swaps via DEX (decentralised exchanges)
A swap via a DEX (e.g. Uniswap, 1inch) is treated for tax purposes in the same way as a swap on a central exchange: it is a taxable event. You sell one token and buy another. The capital gain on the sold token is taxable.
How Cryptotax handles this: DEX swaps are automatically imported via your wallet imports and classified as a swap. Make sure to add your wallet addresses on Ethereum, Base and Arbitrum for a complete picture. Read more about the tax treatment in How are crypto swaps taxed in Belgium.
Liquidity pools
When you add liquidity to a pool (e.g. ETH/USDC on Uniswap), you receive LP tokens representing your share. Adding liquidity may be considered a swap (disposal of the contributed tokens). When you remove liquidity you receive the tokens back, possibly in different proportions.
How Cryptotax handles this: deposits, accrued trading fees and withdrawals on Uniswap, Curve, SushiSwap and Beefy are automatically recognised and placed in the correct category. The full explanation, including why impermanent loss is not a separate deductible item for tax purposes, can be found in Liquidity pools and tax in Belgium.
Lending and borrowing
- Lending: You lend out crypto and receive interest. That interest is taxable as income upon receipt.
- Borrowing: You borrow crypto and use it. As long as you return the borrowed crypto without selling it, there is no taxable event on the borrowing itself. However, any transactions involving the borrowed crypto may be taxable.
How Cryptotax handles this: lending and borrowing activity on Aave V2/V3, Compound V2/V3, Morpho, MakerDAO and Spark is automatically qualified via event parsing. Receipt tokens (aTokens, cTokens, mTokens) are recognised as continuity of your position and synchronised with your wallet, and liquidations receive a separate entry. Read more in Lending and borrowing crypto: how is it taxed.
Yield farming and liquidity mining
Rewards you receive for deploying capital in DeFi protocols are treated similarly to staking rewards: taxable upon receipt based on market value. Cryptotax automatically records every growth in your balance on protocols such as Pendle, Beefy and Curve as a reward. See also Yield farming and tax in Belgium and How staking rewards are taxed.
Staking and restaking
Liquid staking via Lido (stETH) and restaking via EigenLayer, Swell and Symbiotic are automatically detected, including the receipt tokens that represent your position. Read about the tax treatment of staking rewards in DeFi staking and tax in Belgium.
Bridging between chains
When you move tokens from one chain to another via a bridge (e.g. Across, Stargate, Wormhole or an official L2 bridge), Cryptotax automatically links the outgoing and incoming transfer to each other. This preserves your cost basis and ensures a bridge is not incorrectly taxed as a sale. Read more in Bridging, cross-chain fees and cost basis.
Gas fees
Transaction costs on the blockchain (gas fees) that you pay for DeFi transactions can be counted as costs, which reduces your taxable profit. Cryptotax imports gas fees automatically when they are available via your wallet import.
How to add your DeFi wallets
- Go to Cryptotax and click on Wallets.
- Click on Add wallet.
- Enter your public wallet address (e.g. your Ethereum address) and choose the chain (Ethereum, Base or Arbitrum).
- Cryptotax automatically retrieves your on-chain transaction history and classifies each DeFi interaction.
