March 15, 2019

Cryptocurrency tax reforms in leading countries.

Even in those countries that already have a tax on cryptocurrency transactions, there are still ambiguities in the laws themselves. Recently, the developed countries of the world decided to simplify the taxation of cryptocurrencies in order to make the procedure more understandable and easy for taxpayers. Today we will talk about reforms in taxation in the USA, Great Britain and Japan.

Today, cryptocurrency in the United States from the point of view of the law is a property. And also taxed as property, which complicates the calculations for taxpayers. House Ways and Means called on the Internal Revenue Service to streamline the procedure and make tax payment recommendations clearer.

In their decisions, House Ways and Means is guided by the fact that many crypto holders did not indicate cryptocurrency in their last year’s declaration. The state structure explains this by the fact that the recommendations of the IRS are not clearly described and it is difficult for crypto holders to understand them.

The initiators of simplification are not only “House Ways and Means”, but also the crypto holders themselves. They demanded to reconsider the “Law on justice in the field of taxation in cryptocurrency” in order to have the opportunity to use cryptocurrency unhindered for ordinary payment for goods and services.

Great Britain
In the UK, cryptocurrency is not included in existing tax laws. Cryptocurrency transactions may be taxed on income (income tax), may be subject to corporate tax, or capital tax. What kind of tax will be paid depends on who participates in the transfer of tokens.

Last year, a working group was set up in the UK to research cryptocurrencies at the government's Cryptoassets Taskforce. The first report showed that the existing rules on taxation of operations in cryptocurrency should be updated, although the working group itself does not deal with issues of taxation. Cryptoassets Taskforce offered assistance to the UK tax authorities in creating clearer tax rules.

The tax on trade and mining cryptocurrency in Japan, according to current legislation, can reach 55%, since it belongs to the class of “other income”. The Japanese use cryptocurrencies completely legally. However, taxation, as in the United States and the United Kingdom, is still not well established.

The National Tax Agency of Japan has already tried to simplify the tax process, but the government rejected this initiative. Now in Japan they are trying to make the procedure for paying taxes from operations in cryptocurrency standardized using computer programs that would simplify the calculation of taxes. This is a necessary step that will establish order in the field of cryptocurrency and increase state revenues.