Are governments considering cryptocurrency business tax breaks?
The media focused on blockchain-based cryptocurrency at the end of 2017. This will continue in 2018 as Ethereum and Bitcoin are now more than recognizable words.
Little regulation is part of what led to this explosion of awareness. If holding value and avoiding market up/down-ticks is the end goal, correction is necessary.
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How do governments tax cryptocurrency?
Governments have created a wide variety of taxation policy worldwide so laws may vary depending on location.
Property taxes apply to all virtual currencies in the United States so the IRS regulates this.
Commodity taxes apply in Canada so exchange requires a capital gains tax.
These taxes help cryptocurrency owners who keep their investment for more than one year. Owners pay less tax because of policies surrounding long and short-term capital gains/loss.
Cryptocurrency taxation in the United Kingdom and EU
VAT tax laws were applied to virtual currency until 2014 in the UK, when virtual currencies began being taxed like currency instead of property.
“The value of the supply of goods or services on which VAT is due will be the sterling value of the cryptocurrency at the point the transaction takes place.” said a representative from the HMRC in a statement.
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