Category Archives: Crypto tax

Auto Added by WPeMatico

Poland Lifts Temporary Crypto Tax Freebie

The Polish government has announced that it is lifting its temporary suspension of tax collection for digital currencies, introduced back in May of this year.

At the time, the Polish government suggested that a temporary abandonment of tax collection allowed for an in-depth analysis of cryptocurrency in Poland including income tax. The ministry had issued a statement prior the end of the Polish tax year on 30 April, informing consumers that cryptocurrency falls into two income tax brackets of 18% and 32%.

These announcements provoked immediate public response through a Change.org petition which gained over 5,000 signatures asking for tax exemption for crypto technology dealings. Although the government responded positively to the petition, it stated that “the obligation may arise to pay tax in an amount often exceeding the funds invested”.

Now that the promised analysis has been completed, an updated framework for taxation is awaiting approval by the country’s president Andrzej Duda. The draft suggests that crypto-to-crypto transactions will be exempt from income tax, but a tax rate of 19 % will be incurred on cryptocurrency assets when exchanged as “a payment instrument, commodity, service or property right other than virtual currency”.

This means that income from the sale of cryptocurrencies for fiat will be treated in the same way as income from capital gains or investments for taxation purposes, with the same flat rate applicable to those making private or corporate tax returns.

Under the draft proposals, from the beginning of 2019, Poles will be required to report all transactions and purchases using cryptocurrencies on their tax returns. If the income from such transactions exceeds PLN 1 million (Polish zloty worth approximately USD 265,000), an additional rate of 4% will be added to the 19% new flat rate. This new “solidarity tax” at 23% will not be greeted as good news by large cryptocurrency investors.

 

Follow BitcoinNews.com on Twitter: @bitcoinnewscom

Telegram Alerts from BitcoinNews.com: https://t.me/bconews

Want to advertise or get published on BitcoinNews.com? – View our Media Kit PDF here.

Image Courtesy: Pixabay

The post Poland Lifts Temporary Crypto Tax Freebie appeared first on BitcoinNews.com.

French Crypto Taxes See Yet Another Drop Proposal

After stating in April 2018 that cryptocurrency taxes in France would be lowered, it appears that the government has settled on a figure.

Gains from the sale of cryptocurrencies were previously labeled as industrial and commercial profits under French tax law and therefore could have up to as much as 45% tax levied on them for larger users. With French social security contributions (CSG) currently standing at 17.2%, some wealthier crypto traders could have been paying a massive 62% in tax.

In April the Conseil-D’état, under new tax laws specifically aimed at Bitcoin had suggested setting the new crypto tax rate at 19%, which is the same rate applied to what the French call “movable property”, such as cars, jewelry, and patents. Bitcoin would fall into that same category.

However, the Finance Commission in France’s lower house of parliament revealed on Wednesday that its latest amendment to French taxation as it applies to cryptocurrency assets proposes a flat rate of 30%, equal to the current rate of French capital tax, from January of 2019.

The Bank of France proposed a ban earlier this year on investment companies to keep financial institutions from conducting business in the cryptocurrency market until the government could enact proper regulation. The Bank of France Governor Francois Villeroy de Galhau commented earlier this year that new laws were required to cover cryptocurrency exchanges, assuring investors who had previously been shocked when he commented:

“Bitcoin is in no way a currency or even a cryptocurrency. It is a speculative asset. Its value and extreme volatility have no economic basis, and they are nobody’s responsibility.”

The latest details coming from France’s lower house are sure to encourage investors, although original suggestions of a new rate of 19% proposed by the Conseil-D’état earlier in the year would have been far more warmly received by the industry.

The French aim is still geared towards establishing a more global regulatory network as digital currency is used globally, not simply in France. The country’s Finance Minister, Bruno Le Maire, has suggested that the G20 need to reach agreement on how Bitcoin could be regulated amongst the member countries.

Follow BitcoinNews.com on Twitter: @BitcoinNewsCom

Telegram Alerts from BitcoinNews.com: https://t.me/bconews

Want to advertise or get published on BitcoinNews.com? – View our Media Kit PDF here.

Image Courtesy: Pixabay

The post French Crypto Taxes See Yet Another Drop Proposal appeared first on BitcoinNews.com.

IRS Issues Reminder to Report Crypto Earnings

The US Internal Revenue Service (IRS) has published a document ahead of a 17 April deadline to report all income derived from virtual currency transactions, including from cryptocurrencies.

Referring to the IRS Notice 2014-21, which is a guidance on general tax principles, the revenue agency views all virtual and digital currency transactions as taxable, just as any other transactions on properties would. It also warned citizens against withholding such information, noting the privacy features of major cryptocurrencies such as Bitcoin:

“Virtual currency, as generally defined, is a digital representation of value that functions in the same manner as a country’s traditional currency… because transactions in virtual currencies can be difficult to trace and have an inherently pseudo-anonymous aspect, some taxpayers may be tempted to hide taxable income from the IRS.”

Taxpayers who fail to report related earnings can be subject to IRS audits and can be liable for penalties and interest. The reminder states that the tax agency could also resort to criminal prosecution “in more extreme situations”, targeting crimes such as tax evasion and falsification of tax returns. Convictions for tax evasion could result in harsh prison terms of up to five years and a fine of up to $250,000, while false returns could be subject to prison terms of up to three years and a fine of up to $250,000.

Under the same notice, this means that even salaries paid by employers in virtual currency must be filed by employers on the regular Form W-2 and subject to federal income tax withholding and payroll taxes. Freelancers and remote workers classified as independent contractors who get paid in virtual currency are not exempt, either, with self-employment tax rules applying.

However, under current laws, virtual currency is not treated as currency that could generate forex gains or losses and are, therefore, such gains or losses will not be subject to US federal tax.

IRS eyes trained firmly on cryptocurrency

The IRS has been increasingly active in pursuing tax revenue from US citizens involved with virtual currency, especially since 2016 when the combined market capitalization of cryptocurrencies hit USD 8 billion, before racing past USD 600 billion by the end of 2017, with Bitcoin leading the way to an all-time high approaching USD 20,000.

In November 2016, a US federal court ordered cryptocurrency exchanger Coinbase to hand over some 13,000 customer records to the IRS as part of a bid to recover missing revenue from tax evaders who bought Bitcoin from 2013 to 2015.

Despite bitter resistance on the part of Coinbase, they eventually caved in, issuing a statement on their blog last month notifying that Coinbase would hand over data to IRS as per the court summons. It claimed a “partial” victory, after fighting the summons in court “in an effort to protect its customers, and the industry as a whole, from unwarranted intrusions from the government.”.

The data requested includes taxpayer IDs, names, dates of birth, addresses, and transaction records from the period of 2013 to 2015.

 

 

The post IRS Issues Reminder to Report Crypto Earnings appeared first on BitcoinNews.com.