Tax Nightmare: 10,000 Bitcoin Trades Net Swedish Man Nearly $1 Million in Taxes

By CCN.com: Linus Dunker, a Swedish crypto trader, was shocked to receive a bill for almost $1 million from the Swedish Tax Agency, claiming that the tax demand is “unreasonable.” The case is one of a growing number of cryptocurrency-related cases being taken up by the agency, with several bitcoin traders receiving tax bills for millions of Swedish kronor since last year.

The STA has increasingly indicated an interest in prosecuting cryptocurrency cases since crypto trading attained popularity in the country. In 2018 alone, the STA opened investigations into the activities of up to 400 Swedish crypto traders – 10 times more than the previous year. STA control coordinator Henrik Kisterud says that last year’s results, which brought to light a number of “unrecognized activities,” would result in more resources being allocated to crypto investigations this year.

Unreasonable Taxation Claims

According to Dunkers, the STA’s tax demands are “unreasonable” because he is being charged 300 percent of his total profits. Between 2014 and 2016, he traded bitcoin worth SEK 25 million (~$2.75) million and made a moderate profit. Now, the tax agency is taxing Dunkers’ profits at the enhanced rate because he did not deduct the price of his initial bitcoin purchase, which was paid in cash. The STA says that, by law, this makes his tax burden higher.

He also claims that in 2014, Swedish tax laws were not clear on where exactly crypto trading fell under, and he thought they would be classified as a “hobby activity.” It wasn’t until 2016, he says, that the tax agency reached out, instructing him to file his crypto trades under the category of capital income.

Following this notification, he included his crypto trades on the tax forms, but since he was still unaware of how exactly to declare the trades, he included a side note agreeing to corrections if his reports were wrong. He claims he got no response until 2018 when the tax agency audited him and decided to tax him at about 300 percent of the profit rather than 30 percent, as he had expected.

Sweden’s Tax Authority Creating a Precedent for Bitcoin Traders?

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Dunker also says that the fact that the STA is treating his trades as business activities rather than personal ones is problematic. Rather than pay the 30% tax for personal capital gains, he must pay more since his trades are classified as business activities. Potentially, this could mean that thousands of Swedish crypto traders are at risk of receiving similar demand notices form the STA.

Dunker, who thinks the STA is trying to force an appeal in an attempt to set a precedent, says he hopes to take out loans and also sell some of his company’s shares to pay off his tax debt before the January 28 deadline. Over the course of the year, he says that he intends to seek help from the public and the crypto community to pursue the legal process to a satisfactory conclusion.


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Author: David Hundeyin
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Ohio Becomes The First State To Allow Taxpayers To Pay Tax Bills Using Cryptocurrency

By now, most taxpayers understand that there are tax consequences associated with cryptocurrency, but ironically, until recently you couldn’t pay those taxes using cryptocurrency. That’s about to change: With the launch of OhioCrypto.com, Ohio will become the first state in the nation to accept tax payments using cryptocurrency.

 

“We are proud to make Ohio the first state in the nation to accept tax payments via cryptocurrency,” said Ohio Treasurer Josh Mandel. “We’re doing this to provide Ohioans more options and ease in paying their taxes and also to project Ohio’s leadership in embracing blockchain technology.”

Under the new payment system, not all taxpayers can make payment in cryptocurrency: It’s limited to businesses operating in Ohio. Offering the service to individual taxpayers is on the agenda, but Mandel hasn’t indicated any specific timeframe for the expansion.

Here’s how it works: If you operate a business in the State of Ohio and you have a tax bill, you can register online at OhioCrypto.com to pay your taxes. You can make payments on any of 23 eligible business-related taxes (you can find a list here), and there is no transaction limit.

The Treasurer’s office isn’t holding, mining or investing in cryptocurrency for payments or processing. All cryptocurrency payments are processed by a third-party cryptocurrency payment processor, BitPay. Those payments are immediately converted to dollars before being deposited into a state account.

“The State of Ohio is the first major government entity offering its citizens the option to pay with cryptocurrency,” said Stephen Pair, cofounder and CEO of BitPay. “With BitPay, Ohio can leverage blockchain technology and benefit from reduced risk and identity fraud as well as enabling quick and easy payments from any device anywhere in the world and get paid in dollars. This vision is at the forefront of moving blockchain payments into mainstream adoption.”

You’ll need to use Payment Protocol-compatible wallets to pay. Those include BitPay Wallet; Copay Wallet; BTC.com Wallet; Mycelium Wallet; Edge Wallet (formerly Airbitz); Electrum Wallet; Bitcoin Core Wallet; Bitcoin.com Wallet; BRD Wallet (breadwallet); and Bitcoin Cash (BCH) Wallets. If you don’t have one of these wallets, OhioCrypto.com advises you to create one and send some coin to it.

Currently, the Treasurer’s office only accepts Bitcoin for payment, but the plan is to add other cryptocurrencies in the future.

There is a cost associated with paying in cryptocurrency (it’s worth noting taxpayers who pay via credit cards or debit cards are also subject to fees from payment providers but are not assessed fees through the Treasurer’s office). Taxpayers paying using cryptocurrency are charged a transaction fee, network fee and miner fee. The miner fee will be displayed in the taxpayer’s wallet and not on OhioCrypto.com. The transaction fee will be 0% during an initial three-month introductory period, and after that time, it will be 1%. Fees are user fees and are not supplemented by state funds. According to the Treasurer’s Office, “The State of Ohio will not pay Bitpay or any other company fees for processing or other services relating to the acceptance of crypto.”

It will be interesting to see if other state governments follow suit. A bill to accept bitcoin as payment for taxes was ultimately voted down, 264 to 74, by the New Hampshire legislature in 2016. A similar measure in Utah also failed to pass, while a bill to accept crypto for payments in Georgia stalled earlier this year. However, states are still trying: Arizona’s state legislature actually passed a crypto payment measure, but it was vetoed on May 16, 2018.

The Internal Revenue Service (IRS) doesn’t currently accept cryptocurrency as payment either. By law, the IRS issues Regulations (interpretations of the tax code) and other guidance about the kinds of payment which can be used to pay taxes. The IRS has authorized payment by check, money order, credit card and debit card—but not by Bitcoin or other cryptocurrency.


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Author: Kelly Phillips Erb
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Taxes and Crypto

Bitcoin is “the grandfather” of cryptocurrency, as well as the first official application of blockchain technology. Given this, it is an inherently disruptive technology. Just as blockchain technology has disrupted traditional ledger technologies, Bitcoin has made waves in the fintech and currency spaces by successfully sustaining a decentralized, yet secure digital currency solution.

Bitcoin does not need centralized institutions—like banks—to be its backbone. Instead, a cryptographic encryption system acts as the mathematical authority required to organize and verify transactions. Bitcoin miners task their PCs with solving pieces of an open-source algorithm, which helps to organize and verify transactions. In return for their hard work, this mathematical authority compensates miners in Bitcoin in proportion to their efforts.

Miners can then exchange Bitcoin for fiat money like USD, or use them to buy goods and services directly.

Bitcoin and the US government have an interesting relationship. Between Bitcoin’s trademark volatility, and its superficial associations with the nefarious, not to mention the anxieties officials must have about ceding monetary control and fiscal policy to what is essentially an algorithm and those that verify the transactions (if it would ever come to that), it makes sense that the government would be uneasy about mainstream acceptance of the currency.

However, over time, Bitcoin’s resilience as a network and a currency, as well as the expediency and cost-effectiveness of blockchain payments have made a case for the cryptocurrency that has proved quite effective. Accordingly, officials have tolerated a gradual yet substantial induction of Bitcoin into conventional financial services.

First, cryptocurrency exchanges started pairing Bitcoin to fiat counter-currencies such as the dollar. These platforms, like Binance and even Coinbase remain popular today. The increasing presence of Bitcoin in finance is also evidenced in Bitcoin futures contracts, which are traded on major institutional exchanges like the Chicago Mercantile Exchange and the Chicago Board Options Exchange.

Given this acceptance, and Bitcoin’s gradual inroads into the established market, it only makes sense that Bitcoin has become subject to some institutional pressures. And indeed, regulators watching over this latest entry to their ecosystem have also exerted their own influence on Bitcoin.

Bitcoin and Taxes

While originally proclaimed anonymous, the lion’s share of Bitcoin transactions today are transparent. Governments have observed surges of black-market trading using Bitcoin in the past. Exchanges now impose anti-money laundering requirements on Bitcoin traders to avoid drawing the ire of regulators.

The biggest change for Bitcoin traders, though, has been taxes.

While regulators, central bankers, and federal judges all have different opinions on how to categorize Bitcoin, whether a currency or commodity, they all seem to agree it should be taxed. Most major countries tax cryptocurrencies similarly, too.

So, what does that mean for traders?

The Specifics

The first thing to know is that nothing matters until it’s put into law. There’s always speculation about what will happen based on what some financial regulator says, but no individual has the ability to redefine an asset or unilaterally alter tax code, and little has changed since the IRS first addressed cryptocurrencies in 2014.

In the United States, IRS Notice 2014-21 defines virtual currencies as property. This means anything purchased using a digital currency is liable to be taxed as a capital gain whether short or long term depending on how long the asset was held.

For instance, if you buy a cup of coffee using Bitcoin that you purchased when it was worth $1,000, you must also account for the price of Bitcoin at the time of the coffee purchase. If Bitcoin is trading at $1,200 when you buy the coffee, you’ve purchased a dollar-denominated good with another asset that is now worth more in dollars than it used to be. That means the amount of Bitcoin you spent on the coffee will be taxed according to capital gains rules.

While cryptocurrency brokers aren’t required to issue 1099 forms to clients, traders are supposed to disclose everything to the IRS or face tax evasion charges. Taxable transactions include:

  • Exchanging cryptocurrency for fiat money, or “cashing out”

  • Paying for goods or services, such as using Bitcoin to buy a cup of coffee

  • Exchanging one cryptocurrency for another cryptocurrency

  • Receiving mined or forked cryptocurrencies

The following are not taxable events according to the IRS:

  • Buying cryptocurrency with fiat money

  • Donating cryptocurrency to a tax-exempt non-profit or charity

  • Making a gift of cryptocurrency to a third party

  • Transferring cryptocurrency between wallets

How to Determine What You Owe

Determining how much profit you’ve made and how much you’re liable for in taxes is a bit complicated.

Cashing Out of Crypto

In keeping with standard tax rules, when cashing out cryptocurrency for fiat money like dollars, one will need to know the basis price of the Bitcoin they’re selling.

For example, if you bought Bitcoin at $6,000 and sold it at $8,000 three months later, you’ll pay a short-term capital gains tax (equivalent to one’s income tax) on the $2,000 gained. If the same trade took place over a two-year timeline, long-term capital gains taxes correspondneymar to one’s tax bracket are applied. This is 0% for those in the 10-15% income bracket, 15% for those in the 25-35% income bracket, and 20% for those in higher brackets.

Selling the cryptocurrencies that one has mined instead of those that they bought previously with fiat is a different story. Since they’re receiving dollars in exchange for mining inputs that can only be described as work (and indeed is so with the term “Proof of Work”), the profit made from selling mined cryptocurrencies is taxed as business income. One is also able to deduct the expenses that went into their mining operation, such as PC hardware and electricity.

Personal Purchases

The taxes on buying a cup of coffee with cryptocurrency are also convoluted. One must know the basis price of the Bitcoin they used to buy the coffee, then subtract it by the cost of the coffee.

Currently, tax code allows taxpayers to exclude up to $200 per transaction for foreign currency exchange rate gain, if the gain was derived from a personal purchase, like a cup of coffee. This is known as a de minimis election. But there is no “de minimis” clause that exempts small transactions, which can create a very tangled tax problem if one is constantly trading crypto and also using it to buy goods and services.

Determining which coins were used to buy the coffee, their basis price and according gains, and then repeating this for every purchase only gets more complicated if the buyer is also trading coins frequently. It’s therefore vital to remember to keep all transaction information for each digital wallet and currency.

Another complication comes with the fact that this only works with gains. Declaring a loss and getting a tax deduction is relevant only for capital asset trades or for-profit transactions. If one buys Bitcoin at $8,000 and then uses it to purchase a pair of jeans when Bitcoin is worth $6,000, they can’t declare this a loss on their tax forms.

Exchanging Cryptocurrencies

Exchanging cryptocurrencies exposes investors to taxes as well. You’re effectively selling Bitcoin if you buy Ethereum with it, so you’ll need to report the difference in Bitcoin’s price between when you bought it and when you spent it on Ethereum, plus make note of the price of Ethereum at its purchase time for when you sell it later.

Many exchanges help crypto traders keep all this information organized by offering free exports of all trading data, which an accountant (or a diligent enthusiast) can use to determine their tax burden. Blockchain solutions are also well-suited to record this data and highlight relevant points of tax interest. Platforms like TrustVerse have smart-contract based wealth management services that organize one’s digital identity and their assets on the blockchain, to ensure that tax and estate obligations are addressed with immutable accuracy according to the asset owner.

It is always recommended to go to a certified accountant when attempting to file cryptocurrency taxes for the first time. While it might seem daunting to tackle a multi-year trading career, it must be done, and it’s getting easier as CPAs and other tax professionals learn more about crypto assets. For now, the IRS is letting people become accustomed to the new way of doing things and has published a guide on amending old tax returns to include cryptocurrency. Savvy traders are already ahead of their obligations and are now focusing on the next year’s crypto market without this cloud of uncertainty over their heads.


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Author:  Joe Liebkind 
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You Don’t Have to Own Crypto to Make Money Off of It

To make his fortune on cryptocurrency, Jake Benson doesn’t have to choose a winner among the hundreds of firms hawking digital tokens. He just needs to do their taxes.

Benson is following the ’49er model — as in 1849. Like industrious shopkeepers during the California Gold Rush, he’s offering the digital equivalent of picks and shovels. In his case, accounting services.

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The world of digital currency is poised to draw billions of dollars from institutional investors if it can provide boring back-office services like custody banking and trading systems along with tax accounting. While the functions are essentially the same as in traditional businesses, crypto presents unique challenges.

“Just to name one difference, the number of decimal places in a crypto asset can be up to 18-plus digits,” said Benson, whose Libra back-office firm caters exclusively to the crypto crowd. “That fact alone actually breaks a lot of accounting systems.”

Hundreds of firms like Benson’s are competing to sell the nuts and bolts of the burgeoning market. Startups financed by venture capital and token sales are fighting for advantage as the field begins to get crowded. Like the sellers of mining implements during the Gold Rush, they plan to profit whether or not Bitcoin and other cryptocurrencies turn out to be digital treasure.

Traditional Solutions

“What really excites me is this whole picks-and-shovels approach,” said David Wills, chief operating officer of Caspian, a Hong Kong-based provider of crypto trading systems and related technologies for hedge funds. “As long as the asset class has a pulse, those companies will be the ones to succeed.”

If established firms such as State Street Inc. and Bank of New York Mellon Corp. decide to do business with the virtual-currency world, it would lend credibility to the industry even if the firms aren’t that knowledgeable about crypto, said Morgan Hill, a partner at the $30 million Turing Funds in New York.

“There are no off-the-shelf solutions from traditional finance,” Hill said. “Everything is still getting pieced together. The expertise in this space are people who got in early and have learned the pitfalls.”

At a trio of crypto conferences in New York last month, hundreds of companies clamored for one of two things, Hill said: investors in their initial coin offerings or customers for their back-office businesses.

Almost all the companies are startups, and most have yet to create what Hill calls an “MVP” — a minimum viable product. A few, like Libra, Benson’s firm, have been around a few years and are adding clients and staff as demand surges. The trick is to get customers to stay, said Caspian’s Wills.

Creatures of Habit

“Human beings are creatures of habit,” Wills said. “Once a trading system is built into your operational workflow, it’s hard to remove it. In crypto, there are many different levels of workflow that need to be in place.”

Wills said Caspian is planning to sell a so-called utility token that can be used to pay trading fees. It will also be used to compensate developers of applications available through Caspian’s system.

Since money managers are required to keep customer assets secure, a pressing need is a custodial bank. Custody banks such as BNY Mellon and State Street would fit the bill, but they haven’t committed to crypto.

Job Opening

That leaves the job open for digital-money companies. Omega One, an agency brokerage for cryptocurrencies that’s opening an office in Bermuda, says it will work with insurers and the island’s government to set up a custody business there.

“Bermuda has an incredibly strong legal, technical, reputational jurisdiction for financial services in general, but particularly for custody of assets and reinsurance,” said Alex Gordon-Brander, Omega One’s chief executive officer.

Today’s crypto scene looks a lot like the birth of the dot-com boom in the mid-1990s, Gordon-Brander said.

“Obviously, not everybody survives the cut,” he said. “But it’s clear that the revolution is happening and the leaders are emerging.”



Here at Dollar Destruction, we endeavor to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!
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Author: Rob Urban
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Crypto Exchange Bithumb Hit With Bill After Tax Investigation Ends

South Korean cryptocurrency exchange Bithumb has been found not guilty of tax evasion, but now faces a massive tax bill, according to reports.

The country’s National Tax Service launched an investigation into the firm back in January amid a wider crackdown on crypto exchanges, and has now cleared the company of wrongdoing. However, Bithumb – one of South Korea’s biggest exchanges by trading volume – now faces a bill for back taxes that totals around 30 billion won (almost $28 million), according to local news source eToday.

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A tax official was quoted as saying:

“The [National Tax Service] has conducted a tax investigation against Bithumb for the 2014 to 2017 business years. I know that Bithumb has decided to pay the related taxes without any objection to the imposed tax amount.”

“No charge of tax evasion was found, so prosecution charges against tax portal were not carried out,” the official continued.

The exchange has reportedly said it is yet to receive a formal notice about the final tax liability.

The South Korean authorities have been intensifying their actions against the country’s crypto exchanges since late last year, moves that followed a ban on initial coin offerings (ICOs) in September.

The country outlawed anonymous trading in January, and has moved to investigate a number of exchanges over possible crimes such as embezzlement and fraud. Most recently, a local police department said that executives at the Coinone exchange will be charged on grounds that its margin trading service is, in effect, illegal gambling.

While it briefly seemed that a ban on exchange-based trading might also be in the works, that possibility seems to have diminished, alongside regulatory moves to once more allow domestic ICOs under stricter rules.



Here at Dollar Destruction, we endeavor to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!
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Author: Daniel Palmer
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Spending Crypto For Personal Use Can Be A Tax Mistake

The AICPA recently asked the IRS for some equitable relief by adopting a “de minimus election,” which provides a $200 threshold for excluding capital gains income on personal transactions.

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If a taxpayer purchases virtual currency (cryptocurrency) and spends it on personal use, the IRS requires him to calculate a capital gain or loss on each transaction. Capital gains on personal-use property are reportable and subject to tax, whereas, the IRS disallows capital losses.

The AICPA recently asked the IRS for some equitable relief by adopting a “de minimus election,” which provides a $200 threshold for excluding capital gains income on personal transactions.(See the AICPA letter and an excerpt of the de minimus rule proposal below.)

If a taxpayer acquires virtual currency as an investment, though, then all capital gains and capital losses are reportable, and the de minims rule should not apply.

The AICPA suggests the IRS apply a similar de minimus rule used for foreign currency transactions in Section 988(e)(2) (see below). The code section refers to personal purchases, not Section 162 business or Section 212 investment property. For example, if a taxpayer acquired Euros for a European vacation, the de minimus rule applies, and the taxpayer can exclude capital gains on the Euros spent if the capital gain is under $200 per transaction.

The IRS does not permit taxpayers to deduct capital losses on personal-use property, including foreign currency or virtual currency held for personal use. Taxpayers may not deduct capital losses on the sale of a private auto or a primary residence.

Examples of using crypto for personal use vs. investment property

1.    Joe purchased one Bitcoin in early 2017 for personal-use spending, and his Bitcoin rose in price substantially during the year. Joe planned on many vendors adopting Bitcoin as a means of payment. Joe’s original intention was for personal use, so a de minimus exemption should apply to him if the IRS approves that AICPA recommendation*. If Joe bought Bitcoin in 2018, he might have a capital loss, which would be non-deductible on personal-use property.

2.    Nancy invested in 10 Bitcoins in early 2017, and her intention was capital appreciation and diversification into a new asset class. She spent Bitcoin frequently during the year on personal transactions, buying goods and services wherever Bitcoin was accepted. She hoped it would be tax-free, but it’s not.

The intention of the taxpayer is critical in determining tax treatment. If the aim is for personal use, then the de minimus rule should apply to capital gains under $200, and capital losses are not deductible. If the intention is for investment, then it’s capital gains and losses. If the purpose is for business, ordinary gain or loss treatment applies.

With tax treatment hinging on category (personal use, investment, and business), it’s wise to segregate cryptocurrency into these buckets carefully. If the IRS agrees with the AICPA proposal on the de minimus exemption, declare a crypto wallet for personal use, and the rest as an investment to protect capital loss treatment on the bulk of your crypto that you don’t plan to spend.

Excerpt from the AICPA letter

4. Need for a De Minimis Election

“Overview: Some taxpayers may only have a minimal amount of virtual currency that is designated for making small purchases (such as buying coffee). Tracking the basis and FMV of the virtual currency for each of these small purchases is time consuming, burdensome, and will yield a de minimis amount of gain or loss. A binding election applicable for a specified amount of virtual currency is beneficial to taxpayers.

Currently, section 988(e)(2) allows for an exclusion of up to $200 per transaction for foreign currency exchange rate gain, if derived from personal purchase. The same exclusion should apply to virtual currencies even though they are considered property rather than foreign currency.

Suggested FAQ

Q-9: May individuals use a de minimis rule for virtual currency similar to the section 988(e)(2) exclusion of up to $200 per transaction for foreign currency exchange rate gain?

A-9: Yes. Individuals may use a de minimis rule, similar to section the 988(e)(2) exclusion, for virtual currency transactions to alleviate the burden or recordkeeping for individuals who use virtual currency as a medium of exchange. This de minimis rule allows taxpayers to exclude transactions resulting in $200 or less of gain.”

Section 988(e)(2) Exclusion for certain personal transactions

“If—

(A) nonfunctional currency is disposed of by an individual in any transaction, and

(B) such transaction is a personal transaction,

no gain shall be recognized for purposes of this subtitle by reason of changes in exchange rates after such currency was acquired by such individual and before such disposition. The preceding sentence shall not apply if the gain which would otherwise be recognized on the transaction exceeds $200.

(3) Personal transactions. For purposes of this subsection, the term “personal transaction” means any transaction entered into by an individual, except that such term shall not include any transaction to the extent that expenses properly allocable to such transaction meet the requirements of—

(A) section 162 (other than traveling expenses described in subsection (a)(2) thereof), or

(B) section 212 (other than that part of section 212 dealing with expenses incurred in connection with taxes).”

(Note: Section 162 is for business, and Section 212 is for investments.)

* The IRS has made no indication that they intend to adopt all, or any, of the many excellent recommendations from the AICPA. 



Here at Dollar Destruction, we endeavor to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!
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Author: Robert Green
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18% tax on cryptos? Indian government considers regulation over ban

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The Indian government is in talks of levying an 18% tax on cryptocurrency trading. The knowledge allegedly comes from people with a direct knowledge of the matter.

The news, as reported by Bloomberg, states that cryptocurrencies could be taxed pending their declaration as intangible goods. Even as they are on par with software with respect to their classifications, the source added that their use in illegal activities would have to be regulated using other laws.

The proposal is currently under consideration by the Central Board of Indirect Taxes and Customs and will be submitted to the GST Council after its finalization for approval.

Cryptocurrency exchanges and traders are operating in a legal grey area, with the Reserve Bank of India banning banks from dealing with entities trading in cryptos. They also sent a deadline of 3 months from the initial release of its circular in April for all crypto exchange platforms to shut down. However, crypto exchanges have moved the Supreme Court against this.

Details of the proposal were also revealed by the source. There is a list of points in the proposal which seem to provide a basic framework for accepting cryptocurrencies.


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The proposal states that purchase or sale of cryptocurrencies is considered as a supply of goods, and hence subject to the Goods and Services Tax reform recently conducted by the country. It was also mentioned that the value of a cryptocurrency may be determine based on the transaction value in rupees or freely convertible foreign currency. It was also clarified that transactions beyond Indian territory will be liable for integrated GST. They would be considered an import or export of goods.

The outcome of the verdict in the Supreme Court will also decide whether regulation will be implemented or not, as various government agencies are divided over whether cryptocurrencies should be regulated or not.

An 18% tax on cryptos would mean a lot of money in the government’s coffers. The taxation on cryptos would have to be done by treating them as goods and services, as changing their status to a currency or a security would require a change in the law.

This comes hot on the heels of Indian crypto exchange market going up even as the ban holds. Many exchanges started offering crypto-to-crypto trading pairs to offer added liquidity between cryptos, a move they admitted was hastened by the ban.

For all purposes, it is very visible that the Indian trading market is as of yet untapped. Even at a monthly business of about INR 200 crore, or $29 million, the market still exhibits potential for growth inhibited by a reckless blanket ban. A healthy regulatory framework could make way for the Indian market to be one of the biggest in the world.


Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author: Anirudh VK
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UK watchdog says license needed to trade cryptocurrencies

LONDON – Britain’s financial watchdog said on Friday that firms offering services linked to cryptocurrency derivatives must meet all relevant rules in the regulator’s handbook or could face sanctions.

The Financial Conduct Authority (FCA) does not currently regulate cryptocurrencies.
But it said that dealing or arranging transactions in, advising on or providing other services related to derivatives referencing cryptocurrencies or tokens issued through an initial coin offering (ICO), would likely require its authorization.

This includes cryptocurrency futures, cryptocurrency contracts for differences (CFDs) and cryptocurrency options, it said.

The FCA warned consumers last September that ICOs were high risk and speculative.
Europe’s top markets watchdog warned in November that new crypto coins could turn out to be worthless.

Demand for cryptocurrencies has pushed up prices for currencies such as bitcoin BTC=BTSP to a record high of more than $19,000 in 2017, before concerns that regulators may step in sent markets tumbling.

In March, financial policymakers from the world’s 20 leading economies called on national regulators to monitor the development of crypto-assets and their risks, but stopped short of coordinated action due to a lack of consensus.

The FCA’s move follows an announcement last month by finance minister Philip Hammond, who said Britain would set up a task force both to manage the risk around crypto assets and exploit the underlying blockchain technology.

In its statement, the FCA said: “It is firms’ responsibility to ensure that they have the appropriate authorization and permission to carry on regulated activity.”

“If your firm is not authorized by the FCA and is offering products or services requiring authorization it is a criminal offence. Authorized firms offering these products without the appropriate permission may be subject to enforcement action.”

Jake Green, regulation partner at law firm Ashurst, said: “To some degree this (FCA statement) clears up a small degree of academic uncertainty. Regardless, it must be the correct decision and shouldn’t come as a shock to many.”


 

Here at Dollar Destruction, we endeavour to bring to you the latest, most important news from around the globe. We scan the web looking for the most valuable content and dish it right up for you! The content of this article was provided by the source referenced. Dollar Destruction does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products or other materials on this page. As always, we encourage you to perform your own research!

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Author’s Simon Jessop, Emma Rumney

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