Income from the cryptocurrency operations in Azerbaijan must be taxed.
This was stated by Shamil Arabov, the deputy chief of the Department of Tax Politics and Strategic Investigations of Azerbaijan Ministry of Taxation. He said this on Thursday, during his speech on the conference “New trends in the financial technologies: blockchain, cryptocurrencies, and security,” informs the local Internet resource Trend.
Ministry of Taxation considers that individuals occupied in cryptocurrency operations must be registered in tax bodies, provide the relevant declarations, and pay taxes to the state budget,
- Arabov mentioned.
Due to the official’s words, the operations with cryptocurrencies are usually carried out between the individuals, so they are considered non-business activities. He emphasized that today, the issue of cryptocurrency taxation is discussed by all world countries.
Almost all world is now discussing the possibility of taxation for the operations with the popular cryptocurrencies. I believe that we should also take into account the extensive use of cryptocurrencies in the digital trading and work out the possibilities for tax bodies to control cryptomarket turnover and its legal regulation,
- said Arabov.
Other countries also discuss or have already implemented the taxation of the cryptocurrency operations.
US taxpayers have to report about the taxable income from the cryptocurrency operations. They must mention it as a part of the taxable salary, realized gross income from the cryptocurrency mining, or realized profit or loss of the capital from the exchange or selling of the currency kept as a primary asset.
However, recent research shows that only 0.04% of cryptocurrency users in the USA pay taxes. Of 250 000 Americans involved in the poll, more than 57% confessed that they knew about taxes that could be used to the cryptocurrency transactions but didn’t pay them. Also, cryptocurrency investors often exchange assets not to pay taxes on the capital income since, in the USA, cryptocurrencies are defined as a property. But at the end of last year, president Trump signed up the law that ruined this loophole.
In South Africa, cryptocurrencies are taxed as the ordinary assets. “According to the rules of ordinary income tax, the revenue, received or accumulated due to the cryptocurrency operations can be taxed as the income in the chapter “gross revenue,” states the Revenue Service of South Africa (SARS).
In France, the taxes for the cryptocurrencies were draconian - 45%, until recently when at the beginning of May the rates have been reduced to 19%.
At the beginning of April, the State Duma of Russia was hearing a law project about the cryptocurrency taxation with the individual income tax (PDFO). It will make 13% of income. Right now, the project is discussed in the Duma committees.
Latvian Ministry of Finance also decided to tax the cryptocurrency revenue to keep Latvians from using digital currencies. Latvian tax on capital makes 20%. The representatives of Latvian Ministry of Finance offered to implement it to the cryptocurrency agreements during the meeting of the parliament commission on budget and taxation.