Don't Forget the 'Other' Cryptocurrency Tax

The currency has three basic functions: the wealth of storage, the unit of account and the means of exchange. Many today argue that cryptocurrency only serve the first of these.

Therefore, when taxes related to cryptocurrency are discussed, there is almost always about real estate changes, ie changes in income taxes.

But it will soon change.

Many believe that, like the Great Crypto winter of 2018, many places can be stronger than ever before, regulators are more comfortable with risks and are more committed to international cooperation on issues. With the joint work of core developers cutting through upgrades and fees-reductions in technological developments, the crypto has finally started accepting as a unit of exchange and account - is ready for use in daily transactions.

While it is certainly a long-awaited and welcoming milestone, it is also perfect to increase the national and state regulators' hunger for revenue from sales taxes, value-added taxes (WAT) and revenue from goods and services taxes (GST). According to worldly sources, these taxes increase revenue for governments rather than income tax.

As with income taxes, failure to follow does not know or lead to dramatic consequences for those failing to follow the rules. These taxes are likely to hit 24 per cent with Finland, 20 per cent France and 19 per cent of Germany.

So, how do we start a conversation, businesses, decentralization or otherwise, need to know? About to issue or hold tokens: Tax Taxes apply any taxes? Many tokens issuer may expect (or pray for) a "Utility" instead of security classification, if the result of utility status in transaction tax is responsible for and where?

Unfortunately, this is not an easy image to paint. With stability and global uniformity in terms of security rules for cryptocurrency, the same brazen is softened for the transaction tax rules.

There are three cryptocorte transaction tax trends for businesses and some individuals.

Different countries, different rules

As with almost all other aspects of tax, different countries have different regulations and guidelines. If your organization is doing business in more than one country, it is almost impossible to maintain a full-time staff of experts or consultants.

In cases where Crypto purchased goods or services, and Crypto is considered an asset or property, the first is a taxable income for the buyer, then the total value of the transaction is subject to the transaction tax, the merchant / seller / seller must then collect and pay.

This will be counted in a local fiat currency that adjusts all times. Individual countries (and some states in countries such as the US) may also impose their own taxes and their own descriptions for different categories of goods and services.

In many countries there are multiple layers of taxation: city, state and federal thinks, at the same time but different rates. In short, it is a real mess for small businesses around the world.

But wait, there's more! If you find it difficult to calculate rates, it will be more difficult to determine the tax authority.

In a typical transaction, there are a set of real decision-making sets, including "bill," "ship to," "from ship" and "user resident jurisdiction." In fact, the fact that these facts apply is in the jurisdiction.

The taxman goes online

By means of digital goods, the most current crypto tokens currently present, the rules have just begun in the past few years.

These rules are warm and heavier by the EU and the Organization for Economic Co-operation and Development (OECD) organizations, the "OECD BEPS Action 1 Temporary Report" for the recently published 300 pages of mind-contact details.

Digital transactions tax (not tax free internet) is a clear trend toward taxes. There is a tax on where the customer lives. Collections will be collected by collecting platforms on merchants and traders on merchants and / or taxes.

So it's complicated. In the crypto space, should we care?

Today, the duplicate nature of Crypto can be understood to be short-lived, known to the sender or transaction recipient. As a result, these new "digital economy" rules are not implemented.

However, as the government tax and other administrators depend on exchanges to introduce your client (KYC) guidelines, accounts that may not be recognized may be reduced over time by requesting these records. In addition, we would like to add and distribute these taxes based on certain types of crypto-based businesses based on the allocation to the global jurisdiction.

Think of a set of "white blockchones" that implements tax, securities, AML / KYC and other provisions. Businesses and investors try to stop their Crypto Space operations, thus demanding a platform.

Taxing the intermediary

A third trend is responsible for paying taxes.

The digital economy (through which we can not just block the internet) has grown faster than the regulators. So now, they are struggling to find a way to tax transactions that are rapidly ill for their transaction tax base.

One idea is to take responsibility for tax collectors like Amazon and Alibaba. This is not a widely accepted solution, but negotiations in the OECD and EU, and U.S. Already the legislative and judicial measures are pending.

If this method is captured, distribution blockbin based business, or underlying distribution blockchain, can also be easy to see as an intermediary responsible for transaction tax collection.

It is very clear: Because of the estimated revenue loss from Internet transactions, governments will not delay.

Australia, India, Singapore, UK And others are introducing the terms for digital transactions of taxes on their borders. Regulators do not control Blackjaw-based transactions because the digital form of the "Internet" transaction is a new form of transaction.

Tokens for taxable goods or services

Furthermore, depending on countries, by any companies or individuals, by issue of taxes to goods or services, their corporate tax risk and their personal freedom are considered to be dangerous.

First we have to confess that it is a mess area, giving the basic feeling of what a token is unclear. Governments are struggling to attract bright lines between safety or property or something with a property or object or material (prepaid goods or services). With the transfer of SAFT's approach, the token capability of the morphore will make it more complicated over time as we have seen.

But the lack of complexity and skill is not often a valid or effective protection - just do a quick search under the word "don tax ride" and you will see the misunderstanding of the tax rules or the realistic and realistic reality of ignorance.

Give special attention to South Korea, the most active power in the Crypto Hot Spot and "Don Rides". In addition, our Korean friends have a very interesting act, and therefore can not be described as a natural person - a man must be charged.