Countries Where Cryptocurrency Is Taxed
Recently, one of the most buzzing financial terms that have been making headlines and minds in most countries is cryptocurrency. No matter where you live, you must have heard about cryptocurrency. If you're a frequent visitor of this site however, you must have read about it many times.
Also, you must have heard about some countries' governments coming up with legislations either against or in favour of cryptocurrency. India has become the latest one through it's cryptocurrency tax announcement.
In this article, we are presenting to you the countries which are taxing cryptocurrency and related investments.
Countries where cryptocurrency is taxed
The United Kingdom
Coming number one in our list is the UK. In the United Kingdom, cryptocurrency is treated as a capital asset. The capital gains tax rate is levied on the disposal of cryptocurrency. This implies selling tokens for money, exchanging tokens for a different type of token, using tokens to pay for goods or services, giving away tokens to another person (unless it’s a gift to a spouse or civil partner). All such crypto disposals are taxed in the UK.
The capital gains tax on crypto is 20% for higher and additional rate taxpayers. Basic taxpayers are taxed at 10%.
The United States
The US has an Internal Revenue Service which states that buying and selling of cryptocurrency is identified as property. It's therefore not a currency for tax purposes. Hence, your virtual currency is taxed in the same way as any other asset you own like gold.
The crypto transactions taxable include selling crypto for cash, paying crypto for goods and services. Others include buying one crypto with another, receiving mined crypto, being paid in crypto by an employer and receiving crypto rewards.
The Italian authorities in charge of taxation had reportedly reached a conclusion that cryptocurrency is to be treated as a foreign currency. As a result, proceeds/income originating from such exchanges are subjected to a flat 26% substitutive tax.
Other nations that tax cryptocurrency
Other nations which also tax cryptocurrency include ;Canada, Germany and India
Canada; Of all the countries in this list, Canada is a bit different. Canada treats cryptocurrency as a digital asset, whose purchase or holding does not attract tax, but the sale does. Now, when you earn capital through the disposal of cryptocurrency, you have to generally include it in the income for the year. But only 50% of the capital gain is subject to tax, and not the entire gains.
Germany; In Germany, the taxation system for crypto is a little quirky. Germany views cryptocurrency as private money and not as a capital asset. Holding Crypto for more than a year attracts no tax but holding it for less than a year does.
India; India just announced a major setback for cryptocurrency enthusiasts in the country a week ago. According to the announcement, any income from the transfer of digital assets ( crypto) is charged 30% tax. And that’s not all. Even the loss from such transfer of assets cannot be set off against any other income, and the gift of such assets will be taxed in the hands of the recipient.
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