After the huge growth of cryptocurrencies in 2017, tax officials around the world took a fresh look at cryptocurrencies. incomes of their citizens. Bitcoin and other cryptocurrencies have experienced a huge decline since then, but tax authorities are interested in having cryptocurrency owners submit their declarations properly. In some cases, tax authorities also impose penalties on those who try to hide their virtual currencies and income from them.
Today we will talk about how the tax authorities of various countries work with unpaid taxes that are associated with cryptocurrencies and income from them.
US Internal Revenue Service (IRS) in 2019sent letters to 10,000 owners and former owners of cryptocurrencies with a reminder that they may have unpaid taxes as a result of cryptocurrency transactions over the past two years.
In 2014, the IRS issued a guide,classifying cryptocurrencies as property. Management recalls that cryptocurrency trading is seen as a taxable event. U.S. taxpayers who profit from their cryptocurrencies face fines and cryptocurrency taxes ranging from 10% to 37%, although the exact figure depends on the age of the assets.
IRS harasses citizens who did not fileincome statements or misrepresented cryptocurrency earnings. However, in the event of an error, citizens may file amended tax returns. For fraud or tax evasion, authorities can impose very severe sanctions.
HMRC, UK Tax Agency, recentlyappealed to cryptocurrency exchanges with a request to provide information about customers for the purpose of their taxation. Among such exchanges were Coinbase, eToro and CEX.io.
The goal of the HMRC is to track those citizens who,may not have paid taxes on their cryptocurrency assets. HMRC also issued a guide for cryptocurrency owners in 2018, which explains that taxes are levied on capital gains and on profits. The agency claims that it is authorized by law to require information about customers from exchanges, since the purchase and sale of cryptocurrencies is potentially associated with tax obligations.
In general, the United Kingdom allocates corporate income tax, personal income tax and capital gains tax, which are payable if the entity is involved in cryptocurrency transactions.
Sweden also began to take strict measures againstthose who were / are engaged in cryptocurrencies and did not declare their taxes. The growth of cryptocurrency transactions in the country has led the authorities to want a 30% tax on cryptocurrency revenues.
At the beginning of 2019, the Swedish Tax Agency(STA) presented a gigantic $ 1 million tax invoice to trader Linus Dunker as a result of having completed a certain volume of profitable trades in 2014 - 2016, however, he did not take into account in the tax return the amount for which he bought bitcoins. As a result, it turned out that Dunker had to pay almost 300% instead of 30%.
STA is now investigating 400 people who may be held liable for tax evasion related to cryptocurrencies.
In Australia, cryptocurrency owners and traders must report their income and taxes to the Australian Tax Administration, which classifies bitcoins and other cryptocurrencies as property.
Australian taxpayers must pay capital gains taxes on assets. The taxation of cryptocurrencies in Australia is very similar to the American one.
Brazil's Federal Revenue Department releaseda guide according to which cryptocurrency traders should report all their transactions that exceed the amount of $ 7,600 to the country's national treasury. This procedure is effective from August 1, 2019, and anyone who does not comply with these rules is subject to fines and penalties.
South Korean National Tax Servicerecently announced that the use of bitcoins in transactions is taxable. Although there are no cases of prosecution of traders in the country, the agency seeks to introduce appropriate taxes on capital gains and VAT.
Central Direct Tax Office of India(CBDT) stated that traders who do not declare their cryptocurrency earnings or do not pay taxes on them are facing lawsuits. The government recently began sending out notifications to those citizens who, according to their information, have not paid taxes on their cryptocurrency transactions.
Switzerland is known for its friendlyrules regarding virtual currencies and the business associated with them. For tax purposes, Switzerland considers cryptocurrencies as foreign currency.
In Switzerland, miners and citizens who receivesalary in cryptocurrencies, income tax must be paid, while cryptocurrency trading is subject to corporate tax. However, if you are not professionally involved in cryptocurrency trading, you may be exempt from capital gains tax.
It should be noted that tax authorities in variouscountries most often face the problem of classifying cryptocurrencies for tax purposes. Some countries classify cryptocurrencies as property, while others view them as goods, financial assets, or foreign currencies. In any case, you should be prepared to pay taxes on cryptocurrencies, and failure to pay them can lead to criminal prosecution and penalties.