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# Cross-Chain & L2 Tax Treatment by Country

### Cross-Chain and L2 Treatment for supported countries in Netrunner.

| Country | Cross-Chain Bridges | Layer-2 Deposits/Withdrawals | Wrapped Assets | Notes |
| ---- |
| United States (IRS) | Generally treated as a disposal + reacquisition; IRS has not issued explicit guidance | Same as bridges — usually disposal events | Considered swaps → taxable disposals | Conservative approach: all “token in/token out” = taxable |
| United Kingdom (HMRC) | Often treated as disposals; case-by-case analysis | Deposits/withdrawals may trigger capital disposals | Wrapped assets considered swaps | HMRC: if token identity changes → disposal |
| Canada (CRA) | Treated as disposals; gains/losses realized | L2 transfers taxable if considered dispositions | Wrapped tokens treated as new property | CRA applies commodity rules |
| Germany | May be treated as disposals unless identical asset continuity can be proven | Same as bridges | Wrapped tokens = taxable swap | 1-year exemption may still apply if held long enough |
| Spain | Treated as disposals | Same as bridges | Wrapped assets = taxable swaps |  |
| Italy | Treated as disposals | Same as bridges | Wrapped assets = taxable swaps |  |
| Ireland | Disposals unless continuity proven | Same as bridges | Wrapped tokens = taxable swaps |  |
| India | All cross-chain and L2 activity taxed at 30% flat VDA rate | Same | Same | No offsets allowed |
| Japan | Considered disposals (income or CGT depending on activity) | Same | Wrapped = swaps | Strict reporting regime |
| South Africa | Treated as disposals | Same | Wrapped = swaps | SARS enforces case-by-case |
| Australia (ATO) | Likely treated as disposals; ATO may allow transfers in limited cases | Same | Wrapped tokens = disposals | Anti-avoidance provisions may apply |
| New Zealand | Intent-based test; usually taxable if done for resale | Same | Wrapped = swaps | Depends on intent of acquisition |
| Nigeria | The "Barter" Treatment | Same | Wrapped = swaps | Depends on intent of acquisition |


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