Cryptocurrency is a hot topic these days. The craze and demand for cryptocurrencies is growing. The market cap and total number of investors have increased in the last five years.
As we speak, the total market capitalization of cryptocurrency is $ 2 trillion. Bitcoin was launched at a market price of less than 1. Fast forward, ten years today the value of Bitcoin is $ 40,000 per coin. If you are interested in bitcoin trading, visit http://blockchainjobz.com/
Cryptocurrency and its tax implications are always a topic of discussion. The whole world kept an eye on India’s budget announcement. Finance Minister Nirmala Sitharaman has announced that 30% tax will be levied on cryptocurrency income. Another notable announcement was India’s plans to launch Native Cryptocurrency. This cryptocurrency will be regulated and monitored by the Reserve Bank of India.
Now that India has announced its position, let’s look at other countries’ tax policies on crypto investments.
The United States ranks second in terms of crypto investment. More than 40% of the population has crypto investments and they do business on a daily basis. Cryptocurrencies are considered as capital assets. Any profit made through crypto investment is taxable. The U.S. government currently charges a 30% tax slab on all crypto profits. However, this tax limit only applies if you hold the cryptocurrency for more than 12 months. But if you are looking to buy and sell crypto in less than a year, there is no tax effect on your profits.
Unlike the United States and India, cryptocurrency is not considered a capital asset. Instead, the government treats these investments as a commodity. The concept of tax here is the same as your investment and profit through rental income or stock trading. Canadian revenue agencies track all crypto investments of their citizens. Canada recently announced that it is working to create a native exchange to enable user-friendly and easy transactions in crypto. This exchange allows investors to properly declare their investment to the tax authorities.
The UK has not created a specific tax slab for crypto investments. Instead, all crypto investments are subject to two types of tax policy. It can be a capital tax or income tax. Applicable taxes are levied depending on the type of investment. There is no separate tax slab for capital gains. Depending on the total amount of profit, an investor will have to pay 10% to 20% tax.
The Australian Taxation Authority has declared that all crypto investment assets. All investments will bear both capital gains and income tax. Every investor needs to declare their crypto investment as part of their tax filing system. The government has established its links with all the exchanges operating in Australia. If you hold a crypto investment for more than a year, you are liable to pay up to 50% tax on your total capital gains.
Tax policy in the Netherlands differs from the others listed above. Unlike capital gains or income tax, the Netherlands imposes asset tax on crypto investments. This is a bit expensive compared to other tax policies. Assuming your total crypto investment is more than $ 50,000 then you are liable to pay tax up to 31% of the total investment.
Now let’s look at some of the countries that offer tax relief on crypto investments.
Germany treats crypto investments as personal income as opposed to capital gains. However, this tax scheme only applies if an investor buys and sells crypto within a year. If you hold on to your investment for more than a year, then such investment is completely tax free.
Like Germany, cryptocurrencies are tax deductible Your investment does not attract any tax benefits. However, the tax scheme applies to all your transactions if you conduct professional trading activities. Apart from private investments, even companies are exempted from tax benefits when accepting crypto payments.
Most countries consider crypto investment as capital gain, personal income or asset. Applicable tax projects as defined by the tax authority are levied on all these investments. Also, most countries have schemes to track all crypto investments.