Buy Tax and Sell Tax
While there are many ‘taxes’ that can be applied to crypto, like when you are purchasing crypto from an exchange or withdrawing your crypto to your native currency, there can also be ‘taxes’ within crypto projects. Some crypto projects will have a Buy Tax and a Sell Tax when purchasing and selling tokens, so it’s important to understand if the project you’re invested in has either of these taxes
Buy tax is a tax that gets applied to a token upon purchase, this is controllable by the project and the tax can vary. An example is if you purchase a token for a project on an exchange like pancakeswap then you go into that project and purchase one of their assets like an NFT or a Node. That project could have a Buy tax on that NFT or Node that you might have to pay to support the project.
Sell tax is tax that may get applied to a token when selling it on an exchange, this is controllable by the project and the tax can vary. It can also vary on how it’s executed but a common method is when you sell the token on an exchange that’s when the tax will be applied.