Tax Strategy · September 16, 2026 · 15 min read · By CryptoTaxCalc Team

Crypto Futures and Perpetuals Tax: Funding Fees and the 60/40 Rule in 7 Countries

A bitcoin perpetual held for eight hours can be taxed three different ways depending on your country. The US 60/40 rule only covers regulated contracts; offshore perps, funding fees and liquidations are a mess. Here's exactly what applies on each venue.

Image: Illustrative purposes. Tax rules cited from IRC §1256, IRS Notice 2014-21, HMRC BIM spread-betting guidance and Cryptoassets Manual, BMF letter of 10 May 2022, CRA Folio S5-F3-C1, ATO guidance, NTA guidance, and Indian Income Tax Act §115BBH.

A reader sent me his 2025 trade log last month. He'd opened and closed 1,400 bitcoin perpetual swaps on an offshore exchange, most of them held for less than a day. He'd made about £18,000. He assumed this was "short-term trading" and that the tax was straightforward.

It wasn't. In the US, the answer hinges on whether the contract is a regulated futures contract — his offshore perps were not, so the famous 60/40 rule didn't apply. In the UK, a leveraged contract can be taxed as a spread bet (tax-free), a CFD (capital gains), or trading income, depending on how he ran the account. In Japan, the same kind of derivative can be taxed at a flat 20% instead of the 55% top rate that hits spot crypto. He filed in three countries over two years as he moved, which made it worse.

Leverage trading is where crypto tax gets genuinely complicated, because the instrument, the venue, your residency, and whether you're running a business all change the answer. Let me walk through it country by country, starting with the one rule everyone gets wrong.

1. The US 60/40 rule only covers regulated contracts

Here's the rule every futures trader half-remembers. Under IRC §1256, a regulated futures contract (RFC) and certain options get special treatment:

• Every gain or loss is split 60% long-term / 40% short-term, regardless of how long you held the position. An eight-hour CME bitcoin future gets the same 60/40 split as an 18-month hold.
• Positions are marked to market at year-end — unrealised gains and losses on open contracts are realised on 31 December as if you'd closed them.

That is a real advantage. For someone in the top bracket, the blended rate on a §1256 gain is about 27.8% federal before the net investment income tax, versus up to 37% on a short-term property gain.

The catch is the word regulated. §1256 covers contracts traded on a qualified board of exchange under CFTC jurisdiction. For crypto today that means products like CME bitcoin and ether futures and, increasingly, CFTC-approved event contracts. It generally does not cover perpetual swaps on Binance, Bybit, OKX, Hyperliquid or the other venues where most retail perp volume actually trades. Those offshore perps fall back to the default property rules in Notice 2014-21: short-term capital gains at ordinary rates if held under a year, long-term if somehow held longer.

2026 is a turning point. The CFTC has begun approving onshore perpetual-style contracts and granting venue relief, which means a growing set of US-traded perps could qualify as §1256 contracts over time. Don't assume — the specific product and venue determine it, not the word "futures" in the name. A contract on a regulated US board is a different tax animal from an identical-looking perp settled on an offshore platform.

2. Funding fees: paid, received, and largely unguided

Perpetuals have no expiry, so exchanges use a funding rate to keep the perp price near the spot price. Every few hours, longs pay shorts (or vice versa). An active account generates thousands of these micro-events in a year, and there is no clean IRS rule naming "perpetual funding fee."

The defensible, most common treatment:

• Funding you receive is taxable income — ordinary, interest-like earnings at fair value when credited.
• Funding you pay is a cost of the trade. Investors typically fold it into the gain/loss math; taxpayers who qualify as traders in securities (the trader-status bar covered in the day-trading guide) may deduct it as a business expense.

The same broad logic holds in the UK, Canada and Australia — deductibility turns on whether the activity is an investment or a business. The important thing is consistency and records. Because the IRS has never issued definitive perp-specific guidance, a documented, uniform method you apply all year will always beat an improvised one you explain after a CP2000 arrives.

3. Margin is not a disposal. A liquidation is.

Putting up collateral to open a leveraged position is not, by itself, a taxable event — it's collateral, not a sale. What triggers tax is what happens to that collateral:

• Closing a profitable trade realises a gain on the difference between entry and exit (minus fees and funding).
• A forced liquidation disposes of your collateral at the liquidation price, realising a gain or loss — often a sudden, large loss in a crash. Report it. The exchange auto-closing the position doesn't make it a non-event for the IRS, HMRC or anyone else.
• Interest/margin fees you pay follow the funding-fee logic above.

One subtlety that costs traders money: in a volatile wipeout a liquidation can dump a position you'd held long-term into a short-term result if the contract settles within the year. Track each position's open and close, because the holding-period clock on a perp is the time the contract was open, not how long you held the underlying coin.

4. The 7-country map

🇬🇧 UK: the spread-betting wildcard

The UK is unusual. HMRC treats genuine spread betting gains as outside the tax net entirely — no CGT, no income tax — because gambling winnings aren't taxed. A leveraged crypto spread bet with a UK-regulated bookmaker can therefore be tax-free, while an economically similar CFD is a capital gains transaction, and running either as an organised, frequent, profit-seeking operation tips it into trading income taxed at up to 45% plus National Insurance. Whether a given perp is a spread bet, a CFD or a futures contract is a legal question about the product, and the "gambling" exemption vanishes the moment HMRC sees a business. Don't plan around tax-free spread betting without confirming the product and your own status.

🇩🇪 Germany and 🇨🇦 Canada: the 1-year and the 50% questions

Germany applies its §23 EStG logic to private crypto speculations: gains from short-term derivative positions opened and closed within the framework are taxable, while a genuine long-term private holding can fall exempt after a year — but a perp that is opened and closed in hours is plainly inside the speculative zone. Cross into commercial, frequent, leveraged trading and it becomes business income plus trade tax. Canada runs its familiar capital-vs-income two-step: an isolated speculative trade is usually on capital account (50% inclusion), but a pattern of frequent, leveraged, short-duration trades can be reassessed as full business income.

🇦🇺 Australia and 🇮🇳 India: business income sits just under the surface

The ATO commonly treats CFD and margin trading as ordinary income when the activity is organised and undertaken for profit, rather than a one-off. India is the most consequential: a flat 30% VDA rate plus 4% cess applies to transfers of virtual digital assets (with 1% TDS), but genuine futures-and-options trading can instead be classified as business income at slab rates with expense deductions — a fundamentally different return, and one that can require a tax audit and books of account above turnover thresholds. Which category applies depends on the instrument and how you operate; getting it wrong either overpays badly or invites a notice.

🇯🇵 Japan: the biggest rate gap of the seven

Japan is where the instrument choice most dramatically changes the bill. Spot crypto is currently miscellaneous income at progressive rates up to roughly 55% including local tax. Certain derivatives — regulated, futures/FX-style instruments — sit in a separate flat category around 20.315%. That means a regulated crypto derivative can be taxed at well under half the top rate of an equivalent spot sale. Japan's planned 2028 reform pulls spot crypto toward that ~20.315% flat rate, narrowing the gap. If you trade perps from Japan, confirming which category your venue and instrument fall into is the single most valuable check on this page.

5. Offshore venues don't mean "invisible" anymore

A lot of perp volume sits on exchanges that don't issue US 1099 forms, and traders historically took that as meaning the trades were invisible. That assumption died with two developments. First, the OECD's CARF framework went live in January 2026, with exchanges in the UK, EU, Australia and beyond reporting account holders to their home tax authorities automatically. Second, blockchain settlement and fiat on-ramps leave their own trail even where the venue is silent. The honest position: report every offshore perp, keep the venue's trade CSV, and don't rely on the absence of a form. The audit guide walks through how 1099 and CARF mismatches get selected.

6. What to actually record

Leverage accounts produce the messiest records in crypto, so build the habit now:

• Per trade: venue, contract (and whether it's a regulated futures, CFD, spread bet or offshore perp), direction, size/leverage, entry and exit timestamps, entry and exit price, P&L in your reporting currency.
• Funding: separate running totals of funding paid and funding received — don't net them silently.
• Liquidations: the liquidation price, collateral seized, and realised loss.
• Margin: collateral posted and returned, and any interest paid.

The single-trade calculator handles one position's gain at a time; for hundreds or thousands of perps, the CSV batch import matches trades in your country's method and is the only realistic way to avoid an end-of-year reconstruction nightmare.

Bottom line

Three rules survive all seven countries. One: margin posted is not a sale, but a closed trade or a liquidation is. Two: funding received is income and funding paid is a trade cost, applied consistently. Three: the 60/40 §1256 advantage is real but narrow — it follows regulated contracts on real exchanges, not offshore perps. The country spread is enormous, from tax-free spread betting in the UK (if you're genuinely not a business) to a 55% top miscellaneous rate in Japan and a flat 30% in India. Get the instrument and venue classification right before you file, because that one label drives the entire rate.

General information, not tax advice. Derivatives classification varies by product and venue and is actively changing as perps come onshore in the US and as the OECD's CARF reporting expands. For active leveraged accounts or cross-country filings, work with a tax professional who understands both the instrument type and your residency.

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