The widespread distribution of cryptocurrency, sweeping the world, forced the governments of several countries to look at digital money from a different angle. Neither bitcoin, nor other cryptocurrencies have received the status of the official means of payment yet, but the authorities are taking the first steps in this direction. One such measure is the introduction of taxation. We propose to find out in which countries the tax regulations for digital money operate.
The USA
The states considers the cryptocurrency as a capital asset in the hands of the taxpayer, drawing a parallel with shares, bonds and other investment instruments. The Internal Revenue Service (IRS) considers bitcoins as property, not currency. Any transactions with bitcoins are taxed. Owners of cryptocurrencies should inform the IRS about all their transactions.
EU countries
Two years ago, the European Court of Justice, the highest judicial instance of the EU, decided to exempt operations conducted with bitcoins from value-added tax (VAT). The decision was made on the basis of the regulation governing circulation of currencies, banknotes and coins in the European Union. The European Court ruled that bitcoin is a currency, and although VAT is not levied on the purchase and sale of tokens, other transactions may be taxed.
The UK
In the UK, bitcoin is considered a foreign currency. To regulate the cryptocurrency, the tax rules applied to foreign currencies are used. However, transactions with bitcoins, which are considered speculative, are not taxed.
Germany
For four years, bitcoin is considered in Germany a kind of private money. Cryptocurrencies are taxed at a rate of 25%. The tax is taken only in the event that the profit is received within one year from the moment of using bitcoins. If the sale of the cryptocurrency has taken place more than a year after its acquisition, then this tax will not be levied.
Japan
In the Land of the Rising Sun, bitcoin received the status of an official means of payment. Since July 2017, the sale of cryptocurrency is not subject to a consumption tax, but money from operations with bitcoins is equated to income from doing business. These incomes, according to national legislation, are subject to taxes on profits and capital gains.
Australia
In Australia, operations with cryptocurrencies are considered barter agreements. When calculating taxes, bitcoin is regarded as an asset and source of income. The receiving of bitcoins and their exchange are considered exchange trades and taxed.
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