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Prop trading · sources checked 1 November 2026

Prop trading in Europe: tax and rules, country by country

Is a prop firm payout taxable, and is prop trading legal where you live? An overview of ten EU countries: what each regulator has said, how a payout is taxed according to official sources, and when your return for 2026 is due.

No EU rule on prop trading

Income tax is a national matter, and no EU rule sets out how a prop firm payout is taxed. What does apply EU-wide is DAC8: since 1 January 2026 it has required crypto-asset service providers to report their clients' transactions to the tax authorities, and the first exchange of this data between EU countries is due by 30 September 2027. It has not been established whether a Kraken Prop payout, which is an internal transfer in USD or USDG, is reported under DAC8.

Whether a prop firm needs authorisation under MiFID, the EU rules on investment services, depends on how it operates, and that is for national regulators to decide. The Dutch AFM found that Ufunded's clients traded CFDs against the firm, an investment service that requires authorisation; Belgium's FSMA says prop trading companies hold no authorisation. We found nothing specific on prop trading from ESMA, the EU's markets authority.

MiCA, the EU regulation on crypto-assets, does not cover Kraken Prop. In its EEA terms, Kraken lists Kraken Prop as ‘Regulated: No’, and Kraken's MiCA authorisation is held by a different company, Payward Europe Solutions Limited.

The FSMA emphasizes that prop trading companies do not hold any authorization and therefore are not allowed to provide investment services.
FSMA, 7 March 2024
Ufunded operates illegally by providing investment services, specifically by executing orders on behalf of clients in relation to derivative contracts.
AFM, 30 January 2026 (English version: 3 February 2026)

Country by country

What each country's regulator and tax authority have said, as far as we could find in official sources. None of the regulators' statements concerned Kraken Prop. ‘Not settled’ means there is no official text on prop trading, so the answer depends on your situation.

  • Netherlands

    What the regulator said
    The AFM issued a public warning about Ufunded on 30 January 2026: trading CFDs against the firm is an investment service that requires authorisation. Ufunded's appeal has been pending since 22 June 2026.
    How a payout is taxed (official source)
    Not settled: the Belastingdienst has published nothing on prop trading. Possible outcomes are box 1 (income from other activities, which includes income from clients abroad) or no taxable income, judged case by case.
    Filing for 2026
    Return in 2027, by the date in your letter (often 1 May).

  • Germany

    What the regulator said
    BaFin: no statement on prop firms or funded accounts found.
    How a payout is taxed (official source)
    Not settled: no BMF guidance and no court ruling. Possible categories are other income under § 22 Nr. 3 EStG (tax-free below 256 euros a year) or business income under § 15 EStG.
    Filing for 2026
    Without an adviser by 2 August 2027 (31 July is a Saturday); with an adviser by 29 February 2028.

  • France

    What the regulator said
    AMF and ACPR: no statement on prop firms found.
    How a payout is taxed (official source)
    Not settled: nothing in BOFiP. Income from a country without a tax treaty is taxable in France (notice 2047), and the catch-all BNC category (art. 92 CGI) is one possible fit.
    Filing for 2026
    Spring 2027, dates not yet published. A crypto account held abroad, such as at Kraken, is declared on form 3916-bis.

  • Spain

    What the regulator said
    In 2019 the CNMV said that funded-account courses fall outside its remit; it also lists Consob's 2024 warning on funded accounts.
    How a payout is taxed (official source)
    Binding ruling V1722-23 (DGT, 15 June 2023): payouts are income from an economic activity, not capital gains, even with a simulated account.
    Filing for 2026
    Spring 2027, dates not yet published (the 2025 return ran from 8 April to 30 June 2026).

  • Portugal

    What the regulator said
    CMVM and Banco de Portugal: no statement on prop firms found.
    How a payout is taxed (official source)
    Not settled: no binding ruling from the AT. On the wording of the CIRS, category B (self-employment) is the closest fit, but the AT has not said so.
    Filing for 2026
    IRS return from 1 April to 30 June 2027.

  • Poland

    What the regulator said
    KNF: no statement on prop firms found.
    How a payout is taxed (official source)
    Individual KIS rulings (such as 0112-KDIL2-1.4011.742.2026.1.KF, 15 October 2026): income from personally performed activities, declared on PIT-36, not capital income. A ruling protects only the person who requested it.
    Filing for 2026
    PIT-36 from 15 February to 30 April 2027; advance tax payments due by the 20th of the month after a payout.

  • Italy

    What the regulator said
    Consob warned savers about funded trading on 8 July 2024: the challenge is designed not to be easily passed.
    How a payout is taxed (official source)
    Not settled: no ruling from the Agenzia delle Entrate. The most likely category under the law is occasional self-employment income (art. 67(1)(l) TUIR).
    Filing for 2026
    Form 730 probably by 30 September 2027. Redditi PF from 15 April to 31 October 2027; as that is a Sunday, the deadline moves to a later working day.

  • Ireland

    What the regulator said
    Central Bank of Ireland: no specific statement found.
    How a payout is taxed (official source)
    Not researched for this page; ask Revenue.
    Filing for 2026
    Not researched.

  • Malta

    What the regulator said
    MFSA: no specific statement found.
    How a payout is taxed (official source)
    Not researched for this page; ask the Commissioner for Revenue.
    Filing for 2026
    Not researched.

  • Cyprus

    What the regulator said
    CySEC: no general statement on prop firms found.
    How a payout is taxed (official source)
    Not researched for this page; ask the Tax Department.
    Filing for 2026
    Not researched.

Kraken Prop: what is different

Three facts from Kraken's own terms and FAQ change the picture compared with ordinary crypto trading. All orders in the evaluation and in the funded stage are simulated, and the funds are virtual. If you pass, you become a contractor of Payward Oceanic Ltd, a company in the British Virgin Islands, under a Funded Trader Agreement. Payouts arrive in your Kraken account in USD or USDG.

A payout is therefore not a gain on crypto you own. What you do with it afterwards may be a different matter: in Germany and France, for example, selling USDG received as a payout can count as a separate crypto transaction.

Kraken Prop is not available in the United Kingdom, Canada or India. None of the ten countries on this page is excluded, but Kraken offers it only where it considers this permissible and can withdraw it without notice. Kraken itself advises you to seek independent advice on your tax position.

Records to keep

Whatever your country decides, these are the records that the official sources above point to. Keep them for as long as your tax authority can reassess you; that period varies by country (in Portugal, for example, it is four years under art. 128 CIRS).

  • Every evaluation purchase: date, plan, price, currency and discount.
  • Every payout: date, amount, USD or USDG, and the exchange rate your country prescribes (France and Italy: the rate on the day you receive it; Poland: the NBP rate of the previous working day).
  • Your Funded Trader Agreement with Payward Oceanic and the version of Kraken's EEA terms (Part S) that applied at the time.
  • Every subsequent conversion or sale of USDG: date and rate.
  • Your Kraken account statements, including the balance on the dates your country uses (1 January in the Netherlands, 31 December in Italy).
  • Advance tax payments, where they apply (in Poland by the 20th of the month after a payout).

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Questions

Are prop firm payouts taxable?

In the countries we checked, residents are taxed on income from abroad as well, so a payout from a foreign prop firm is not automatically tax-free. How it is taxed varies: Spain treats it as income from an economic activity and Polish rulings treat it as income from personally performed activities; in the other countries the question is not settled.

Is a prop firm payout a capital gain?

Not with Kraken Prop: you trade with virtual money, not crypto you own. Spain's DGT and the Polish rulings explicitly rejected treating payouts as capital income. Selling USDG received as a payout can, however, be a separate crypto transaction.

How are prop firm payouts taxed in Germany?

That is not settled: there is no BMF guidance and no court ruling. Possible categories are other income under § 22 Nr. 3 EStG, which is tax-free below 256 euros a year, or business income under § 15 EStG. Employees must file a return if their side income without tax withheld exceeds 410 euros.

Is prop trading legal in Germany?

There is no German law on prop trading, and we found no BaFin statement on prop firms. Kraken does not exclude Germany from Kraken Prop and calls the service unregulated.

Is prop trading legal in Europe?

There is no EU-wide rule, and national regulators assess each model individually. The Dutch AFM found Ufunded's model to be an investment service that requires authorisation, and Belgium's FSMA says prop trading companies hold no authorisation. Kraken Prop calls itself unregulated and falls outside Kraken's MiCA authorisation.

Can I deduct prop firm evaluation fees?

In most countries this is not settled. Polish rulings allow a flat-rate deduction of 20% for costs, or the actual costs if they are higher and can be proven, counting only the fees for the account that paid out. In Germany, a loss under § 22 Nr. 3 EStG cannot be offset against other income.

Is Kraken Prop available in my country?

Kraken Prop is not available in the United Kingdom, Canada or India. None of the ten EU countries on this page is excluded, but Kraken offers it only where it considers this permissible and can withdraw it without notice.

Sources

This is not tax advice. Ask your tax authority or a tax adviser about your own situation; rules and filing dates can change.