Since the arrival of cryptocurrencies, especially Bitcoin, countries have been figuring out ways to deal with them. Regulatory bodies are trying to make sure that foundations for the trading of bitcoin and altcoins are laid and set of rules are listed to prevent any harm to people’s interest. So, different countries have been taking on different paths. Like, on one hand, Denmark had declared 53% tax on profitable gains while on the other hand, Japan waved off taxes to support and help crypto investors.
Recently, Denmark accessed the dealings of about 2,700 bitcoin traders to tax investors who had been using foreign exchanges for crypto trading. Jonas Karlberg, the founder of AmaZix, Lunalabs and Nordic Blockchain Association, responded to the news on Twitter. He clarified that tax was only applicable if trading was done as speculation. Upon enquiring the criteria for speculation, Dan Rocky Aigens, senior SAP consultant at Approxima, explained:
You can never prove that you were not buying bitcoin for speculation. And it’s not like you can argue with them about it. That’s why the Danish tax authorities will always charge you if you made money on your investment.
Like Denmark, U.S government was also seen requesting data of investors, back in 2017. In 2014, Internal Revenue Service (IRS) declared that bitcoin was a taxable asset so, in 2017, data of Coinbase users was requested to ensure that tax evasion has not taken place.
Recently, Ron Paul, an American politician who fought for presidentship in 2008 and 2012, shared his stance on taxing the cryptocurrency. He showed disapproval for the workings of US Federal Reserve Bank (FED) in his tweet. FED has been increasing the taxes on cryptocurrency through the year and it is expected that more increase is likely to be implemented in the future. Besides showing concerns over FED’s taxing policies, Ron suggested that FED was involved in manipulating prices and distorting the economy.
Up till now, different models are adopted by different countries to handle bitcoin and altcoins. In the future, we will be able to see the results and effects of these models on the crypto community and their crypto dealings to conclude which model proved to be the best and which one didn’t.