India to Tax Cryptocurrency; A look at how other countries regulate it
Posted onAuthorPatricia M. BevillComments Off on India to Tax Cryptocurrency; A look at how other countries regulate it
1 / 12
Cryptocurrencies have come a long way. From being speculative products that few dared to enter, they are now a booming investment opportunity. Non-fungible tokens (NFTs) and other digital currencies are now more widely accepted. However, the decentralized technology behind them has the potential to disrupt the traditional financial system. That’s why governments, legislators, and financial think tanks around the world have been evaluating their use cases. India has introduced a tax on all “virtual digital assets” from April 1. Any income from the transfer of digital assets would be taxed at 30% with no deductions or exemptions. The flat tax rate of 30% will apply even to the donation of digital assets and a tax deduction with source (TDS) of 1% will be applicable to each transaction involving crypto. But different countries are trying different approaches to handle the crypto revolution. While some have fully embraced them, others have imposed bans or restrictions. (Image: Shutterstock)
2 / 12
El Salvador: This South American country has been one of the biggest proponents of cryptocurrency adoption. In September 2021, El Salvador became the first country to adopt Bitcoin as legal tender. This means that all businesses and retailers in the country are required to accept bitcoin as a digital payment method for products and services. The president is even considering creating a “Bitcoin City” where bitcoin will be exempt from property and capital gains taxes.
3 / 12
Russia: Russia has approved the legalization of cryptocurrency and is set to roll out laws to govern it. The current bill suggests that cryptocurrencies will most likely be treated like foreign currency, according to media reports. This means that approved providers will be allowed to transact in cryptocurrency. However, for daily transactions, crypto tokens will first need to be converted into rubles. And any cryptocurrency transactions over 600,000 rubles will need to be reported to the relevant tax authorities. (Image: Shutterstock)
4 / 12
China: The emerging global powerhouse has been mostly hostile to cryptocurrencies and mining activities. Initially, Chinese President XI Jinping made a statement in favor of blockchain technology in 2017. But fearing the impact of unfettered cryptocurrency trading on China’s economic performance, the country outright banned all trading activity. of virtual assets in 2021. Even before the trade ban, China brought the hammer bitcoin mining activities to the region, citing environmental concerns.
5 / 12
Japan: Japan has taken a progressive stance on cryptocurrency regulation. They recognize cryptocurrencies as legal property under their Payment Services Act (PSA). Crypto exchanges in the country must register with the Japan Financial Services Agency and comply with anti-money laundering obligations. Earnings made from cryptocurrency fall under the category of miscellaneous income. Tax rates on crypto gains depend on income, but the highest earners can be taxed up to 55%. (Image: AP Photo)
6 / 12
UK: All companies and start-ups engaged in crypto-asset business in the UK must register with the country’s Financial Conduct Authority (FCA). Crypto-asset businesses must apply for an “Authorized Payment Institution License”. They must also comply with the anti-money laundering measures in force. Under British common law, crypto-assets like bitcoin are also recognized as property. As such, the disposal of crypto assets is subject to capital gains tax. It is 20% for the highest taxpayers and 10% for taxpayers at the base rate.
7 / 12
European Union (EU): Cryptocurrency transactions are legal in most European Union countries. But the governance of each country can vary. Tax laws also vary from country to country, ranging from 0% to 50%. In 2020, the European Commission recommended the Crypto-Asset Markets Regulatory Framework (MiCA) to strengthen consumer protection and introduce new licensing requirements.
8 / 12
Canada: The Canadian Revenue Authority (CRA) treats cryptocurrency as a commodity under the country’s Income Tax Act, according to a Thomson Reuters Institute report released this year. The country also recently expanded its anti-money laundering and anti-terrorist financing oversight laws to cover cryptocurrencies on crowdfunding platforms. The move is seen as a response to anti-vaccine protests in the country, allegedly with resources drawn from bitcoin crowdfunding. (Image: Reuters)
9 / 12
South Korea: The country does not consider cryptocurrencies as financial assets. This means that cryptocurrency transactions are not linked to capital gains tax. Financial watchdogs oversee the regulation of crypto exchanges in the country. Exchanges must also follow strict anti-money laundering guidelines established by the FSS. In late November, the country postponed its cryptocurrency taxation bill to 2023. The bill would have levied a 20% capital gains tax on gains over 2.5 million won (2 $122).
ten / 12
Australia: Australia classifies cryptocurrencies as legal property; this subjects them to capital gains tax. Exchanges can only operate in the country if they are registered with the Australian Transaction Reporting and Analysis Center (ATRAC) and meet the necessary anti-money laundering obligations. The Australian Revenue Service considers cryptocurrency to be a personal-use asset if it is used to purchase goods or exchange with another currency. However, it is not personal-use property when used for investment purposes. Personal-use assets are generally disposed of when used, so they are subject to capital gains tax (CGT).
11 / 12
Singapore: The country was something of a pioneer in the regulation of cryptocurrencies. Cryptocurrency trading there is legal and regulated by the Monetary Authority of Singapore (MAS) under the Payment Services Act of Singapore. Companies can also obtain a license to operate stock exchanges. There is no capital gains tax in Singapore and the appreciation of an asset does not require individuals or companies to pay tax on it. However, individuals must pay 17% income tax if involved in the cryptocurrency industry.
These statistics themselves highlight the effects of slice drift.Consideration should be given to data showing the transaction number and the increase in stamp duty revenue (and other taxes) when stamp duty rates are reduced.The recommendation of the federal inquiry mentioned above should be adopted. Joanne SeveAvalon, New South Wales Premiers and ACT failed on property […]
Harel Insurance Investments & Financial Services Ltd. reduced its position in shares of Avalara, Inc. (NYSE: AVLR – Get a rating) by 48.2% in the first quarter, Holdings Channel.com reports. The company held 510 shares of the company after selling 475 shares during the period. The holdings of Harel Insurance Investments & Financial Services Ltd. […]
Every week, Mansion Global poses a tax question to real estate tax lawyers. Here is this week’s question. Q. I am looking to buy a winter home in Phoenix and want to rent it out the rest of the year. What type of tax am I facing? A. How much tax is paid on rental […]