The most difficult thing in the world to understand is income tax.
– Einstein The attitude of governments to cryptocurrencies can be quite contradictory.
On the one hand, they believe that cryptocurrencies do not have the basic function of fiat currency, or only recognize certain functions;
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On the other hand, they are coveting the high yield of cryptocurrency.
For most open market economies, taxation is the main source of fiscal revenue.
In fact, if the government does not publicly state the position on the legality of cryptocurrencies, then the taxation of cryptocurrencies can be said to acquiesce to its legitimacy.
At present, many countries have begun to tax cryptocurrencies, ranging from 10% to 30%, and even some countries have a tax rate of 50%.
| Japan |
As the first country in the world to implement the cryptocurrency tax scheme, Japan’s high taxes and fees have also led to many discussions.
In Japan, the benefits of virtual currency are classified as “miscellaneous income”.
According to the regulations of the National Tax Agency of Japan, the cryptocurrency tax rate is in the range of 15%-55%, and the Japanese people need to file a tax return every March.
If the investor's annual income in cryptocurrency investment exceeds 40 million yen (a contract of $360,000), the excess will be subject to a maximum tax rate of 55%.
Compared with the 20% income tax imposed on investment products, foreign exchange and other wealth management products, the tax on cryptocurrency is even more ruthless.
| United States |
As early as 2014, the US Internal Revenue Service issued general guidance on taxation of cryptocurrencies.
According to this guidance, whether it is received or mined cryptocurrency, it needs to be calculated in the total income, and its tax will be calculated according to the cryptocurrency market value.
The Tax Emissions and Employment Act, passed last year, stipulates that cryptocurrencies are donated to others in the form of gifts, or donations to charities do not require tax.
However, due to the complexity and privacy of cryptocurrency tax returns, only about 0.04% of US taxpayers reported their cryptocurrency holdings.
In addition, the US Internal Revenue Service has not updated further guidance on cryptocurrencies.
| Venezuela |
According to official Venezuela documents, the Venezuelan State Regulatory Authority (SUNACRIP) will be responsible for the taxation of cryptographic assets and related trading activities.
The new law stipulates that remitters using cryptocurrency remittances are obliged to pay taxes to the National Regulatory Authority with a tax rate of up to 15%.
It is understood that the monthly personal remittance limit is 10 Petro (coin) , the contract is 600 US dollars, once the limit is exceeded, it is necessary to apply to the National Supervisory Authority.
| South Korea |
Hongnanji, the new minister of the Ministry of Finance of the Republic of Korea, revealed in December last year that South Korea intends to levy taxes on cryptocurrencies and ICOs.
Hong Nanji said that the new tax will be consistent with the basic tax system and international trends in Korea.
At present, South Korea has launched a special working group composed of relevant departments such as the National Tax Agency and non-governmental experts.
The aim is to develop an appropriate taxation plan by discussing foreign taxation cases.
In fact, South Korea announced earlier this year that cryptocurrency exchanges will pay taxes in accordance with existing tax policies, which is 22% corporate income tax plus 2.2% local income tax.
However, due to the subsequent amendments to the tax law in August, blockchain companies can enjoy policy benefits, and crypto-asset companies cannot cause a wave of controversy.
At present, South Korea’s latest bill on cryptocurrency tax has not yet been introduced.
| Romania |
As an emerging cryptocurrency market in Eastern Europe, Romania has also begun to tax cryptocurrencies.
Romania’s newly amended Financial Law stipulates that income generated from the sale and purchase of cryptocurrencies should be classified as “other sources of income” and is subject to a 10% income tax.
It is understood that a single cryptocurrency transaction income of less than 200 Romanian krona (a contract of 50 US dollars) will not be taxed.
However, once an investor has accumulated a cryptocurrency transaction of 600 Romanian krona (a contract of $150) a year, he will be subject to a 10% income tax.
| United Kingdom |
The UK's latest tax framework addresses the tax payment scheme for cryptocurrency holders.
Tax plans for cryptocurrency companies or for holding tokens for commercial purposes are currently not included.
In the newly released new tax guide, when investors sell cryptocurrencies, the funds they receive are subject to tax.
The UK Customs and Excise Department (HMRC) also stated that the benefits that miners receive from mining and airdrop activities will be taxed in accordance with the current income tax and the National Insurance Payments Act.
It is understood that speculative investors are required to pay capital gains tax when selling tokens , while those who profit from mining, transaction costs or airdrops are subject to income tax and national insurance premiums.
| Bulgaria |
In addition to cryptocurrency investors, Bulgaria also considers taxing companies that operate businesses related to encrypted assets.
According to the definition of the Bulgarian Internal Revenue Service, any profits derived from the sale of cryptocurrencies will be treated as income.
This means that investors need to report the profits from cryptocurrency transactions.
At present, the IRS imposes a 10% income tax on cryptocurrency income.
| France |
France is the first country to cut the cryptocurrency tax rate, which has reached a maximum of 45%.
The French State Council announced at the end of last year that the profits generated by the sale of cryptocurrencies should be regarded as “movable property” capital gains, which would result in a significant reduction in tax rates.
Previously, the proceeds from cryptocurrency transactions were generally considered to be “Industrial Profits” (BIC), while the proceeds from sporadic cryptocurrency transactions were considered “non-commercial profits”.
In addition to the 45% tax rate, cryptocurrency transactions are subject to a 17.2% Universal Social Contribution Tax (CSG).
When the cryptocurrency is classified as "movable property", the tax rate can be reduced to 19% (including CSG) .
However, cryptocurrency mining and other commercial activities still require taxation in accordance with BIC standards.
Although countries have introduced policies to levy taxes on cryptocurrencies, the actual situation is not ideal.
Due to the anonymity of cryptocurrencies, cryptocurrency investors rarely disclose the benefits of their cryptocurrencies.
Even with punishment and supervision, it is impossible to fully grasp the situation of everyone.
Once the government began to ask for the registration of cryptocurrencies, this would make the cryptocurrency lose its original meaning.
In addition, former US presidential candidate Ron Paul also said in his blog that the capital gains of digital currency should not be taxed.
He believes that the purpose of taxing cryptocurrencies is to allow the central bank to try to control the economy by controlling interest rates, resulting in improper resource allocation.
As a result, investors will be turned to countries that have no capital gains tax on virtual currency.
(Source: District 45)