Will Decentralization Be in Favor or No One Wants to Burn Their Fingers Anymore? (Daily Digest, Oct 26)

Poloniex introduces new restrictions, XRP launches its crypto exchange, Bitfury considers IPO, Viettel moves to blockchain, interview with Jeff Morris, Jr., interview with the Gemini Dollar developer

Food for Thought

BTC

8,744 USD
-0.58%

ETH

272.72 USD
0.13%

XRP

0.4543 USD
0.20%

Related news

Taking a Look At Bitcoin Taxes Around The Globe

The popularity of cryptocurrency has been steadily increasing over the last few years. People from all over the world are increasingly adopting cryptocurrencies as both payment tools and investment opportunities. And where there is money there is tax. While tax rules have been non-existent or quite vague in most countries, tax agencies have started waking up.  In the past two months alone, 4 nations have taken action on crypto taxes: Portugal made cryptocurrencies tax free, France declared crypto to crypto trades as non-taxable, the US sent out warnings to crypto traders and the UK demanded info on crypto traders from major exchanges. Such action is likely to continue as Bitcoin gains wider recognition. This article focuses on the taxation of bitcoin in a handful of regions around the world. USA In the USA, virtual currencies are treated as property and not as currency for the purposes of federal crypto taxation. This means that any transaction you undertake using bitcoin will be taxed using the taxation framework utilized for property. As property transactions result in capital gains – so do crypto transactions. The tax rate for capital gains depends on how long you held the assets, if you are selling assets that you bought within the past year – this will incur short term capital gains which are taxed at the same rate as your regular income. Holding for longer than a year will incur long-term gains which have a tax rate of between 0% to 20%. As the long term tax rate is usually much lower than short-term rates it’s preferable to hold for a year before disposing of assets. European Union The European Court of Justice (ECJ) has stated that bitcoin transactions should be exempted from VAT. While this simply means that buying and selling bitcoin will not attract VAT, cryptocurrencies may still be subject to other forms of taxation, including income tax and capital gains. For tax purposes, the fiscal treatment of bitcoin tends to differ between each country within the European Union. United Kingdom The UK also does not treat cryptocurrencies as money or currency. In this regard, the tax treatment is similar to other countries like the US. However, UK’s tax authority HMRC has classified cryptocurrencies into 3 distinct categories: Exchange token, Utility token, Security token. At present these are taxed in the same way but treatment is likely to change in the future. Bitcoin falls under the ‘Exchange tokens’ category. Any profits derived from selling/trading cryptocurrencies is taxed as a capital gain. The UK uses a pooling system for capital gains; in a nutshell a pool is basically the average cost of all coins within it. So, whenever you sell or dispose of crypto you have to use the cost of the pool to determine the capital gain/loss. Portugal Portugal recently released a statement that makes buying/selling/trading cryptocurrencies completely tax-free. It is so far the only European country to have taken such a stance. The statement follows Portugal’s closed tax system where only the items explicitly listed can be taxed such as stocks, bonds etc. This makes Portugal a lucrative country for crypto traders. Germany In Germany, bitcoin has been considered a form of private money since 2013. Bitcoin owners are subjected to capital gains tax, which is currently 25%. However, this tax is levied only in cases where bitcoin profits are achieved within a year after the owner acquired them. This means that taxpayers that hold this cryptocurrency for more than a year are not subject to capital gains tax.  Japan Japan identifies bitcoin primarily as a payment method. As of 1st July 2017, the Payment Services Act stated that the sale of bitcoin would be exempt from the Consumption Tax. Virtual currencies such as bitcoin in Japan are treated as asset-like values that can be transferred digitally and also used for making payments. The profits you get from bitcoin are thus viewed through the lens of business income. Owners, therefore, are taxed with both the income and capital gains tax. Australia Australia treats virtual currency as items of barter arrangements. The reason for this is that currencies such as bitcoin are treated as assets and thus are liable for capital gains purposes. Businesses that undertake bitcoin-related transactions in Australia are therefore obliged to accurately record, document and date these specific transactions. On the other hand, firms that receive bitcoin payments are required by law to declare the value as ordinary income. The unique thing about Australia is that personal bitcoin-related transactions have tax exemptions in certain circumstances. One such example is if the bitcoin was utilized for the purposes of paying for personal goods or services, and another is when the value of the transaction falls below AUD 10.000 (Australian Dollars). Activities such as mining or exchanging are considered stock trading and so are taxed. Bottom line While the above nations have specific frameworks regarding the taxation of cryptocurrencies such as bitcoin, others lack regulation altogether. In countries like Malaysia and Singapore, the capital gains tax is not yet in place. Tax authorities across the globe are known for their particular tightness on defaulters so it would be prudent to study the regulatory guidelines currently in place in your jurisdiction. This way, you will be better able to report or pay tax on bitcoin transactions, as you are legally obliged to.  It is also worth mentioning that if you have made significant gains or have not filed your crypto taxes for previous years – now would be a good time to revisit them. If you are in doubt seek professional help from a crypto tax accountant. The US recently sent letters to thousands of crypto traders while the UK has requested info from tax agencies. Tax action is likely to continue to increase as cryptocurrencies are recognized more widely. Robin Singh is a cryptocurrency tax consultant based in the UK. He is also the founder of Koinly.io – a cryptocurrency tax solution that simplifies capital gains reporting in the US, Australia, Ireland, among other countries. The post Taking a Look At Bitcoin Taxes Around The Globe appeared first on Coin Insider.
Coin Insider

Bitcoin is Not And Never Will Be ‘Money’

If you’ve been reading my column, you know that I do not believe in the long-term story of bitcoin and that trading it is actually worse than gambling in a Las Vegas casino. I don’t believe bitcoin will actually ever replace fiat currency, and the circumstances under which that could happen would actually undercut the […] The post Bitcoin is Not And Never Will Be ‘Money’ appeared first on CCN.com
CCN

Hot news

By continuing to browse, you agree to the use of cookies. Read Privacy Policy to know more or withdraw your consent.