Not only individuals but corporations look in the direction of cryptocurrencies in the whole world. Virtual money is both an investment and a currency.
Bitcoin is a legal currency in Japan. The purchase can be made in 260.000 stores. Taxes on gains: 15-55 percent, based on the volume.
Currently, gains made on virtual money, which are classified as a legal method of payment in Japan, are “miscellaneous income,” according the Japanese National Tax Agency, the country’s chief tax agency.
That means that Japanese crypto holders have to pay between 15 and 55 percent on their profits declared on their annual tax filings. The top amount applies to people who earn more than 40 million yen ($365,000) annually.
Bitcoin is a virtual currency in the USA. Crypto’s tax status: Property.
Taxes on gains: Calculated based on the coin’s value as of the date it was traded.
The Internal Revenue Service (IRS), a U.S. government agency that collects taxes and enforces tax laws, views cryptocurrencies as properties. Therefore, if you sell your coins for a profit you will be liable to pay a capital gains tax.
The IRS has shown significant interest in cryptocurrencies as a source of revenue over the past few years. For instance, in February 2018, Coinbase sent an official notice to approximately 13,000 of its customers, informing them that their data is being handed over to the IRS per their request. Moreover, the IRS allegedly uses software for tracking purposes and reminds Crypto holders to pay their taxes via memos, highlighting the “inherently pseudo-anonymous aspect” of cryptocurrency transactions.
In the UK crypto’s tax status: Investments (small-scale holding); working capital (if used regularly).
Taxes on gains: Free, if below £11,850, then up to 45 percent
There is a tax-free allowance for every U.K. citizen of working age. For the 2018/2019 tax year, for instance, it constitutes £11,850 per person. If the taxpayer exceeds that amount, he or she is liable to pay 20 percent tax on anything earned between £11,851 and £46,350, 40 percent on earnings of £46,351-£150,000 and 45 percent on gains above £150,000. In the UK some companies have begun paying salaries in Bitcoin.
Cryptocurrency is considered as a foreign currency in Switzerland. Taxes on gains: Wealth tax (determined at the end of the year, based on income).
Cryptocurrencies are an asset for capital gains tax (CGT) purposes. However, this only applies to citizens who qualify as professional traders based on the amount/frequency of crypto-related operations they perform annually. Crypto users are subject to a wealth tax at a rate determined by the tax authorities on December 31 of the fiscal year.
Digital money considered to be private money in Germany.
Taxes on gains: 0 percent (if held for more than a year), 25-28 percent (capital gains tax)
Cryptocurrencies are not legal tender in Germany, but they have been recognized as ‘private money’ by the German Finance Ministry since 2013.
Thus, any profit made through trading, mining or exchanging Bitcoin or altcoins is subject to a capital gains tax, which is 25-28 percent in Germany, including a solidarity surcharge.
However, according the German Income Tax Act, if the assets (cryptos) are held for more than one year, they become tax exempt.
In Russia Crypto’s status is not defined.
Taxes on gains: 13 percent (personal income tax).
There is no definite tax framework for cryptocurrencies in Russia, although various general crypto bills have been introduced this year at the state level. On May 17, the Ministry of Finance published a document stating that citizens should estimate and declare capital gains tax on cryptocurrencies “independently” before an official regulatory framework for the crypto market is introduced. Personal income tax in Russia is levied at 13 percent. Car dealers, restaurants, cafes, taxis and many other places have begun effecting payments in Bitcoin in Russia.
In South Korea Crypto’s status is a legal method of payment.
Taxes on gains: None at the moment.
Currently, there’s no tax framework for crypto investors in South Korea, and no information from local government agencies explicitly stating that gains from crypto trading should be reported for tax purposes at this point, although there’s a 24.2 percent tax for cryptocurrency exchanges in the country.
In Canada Crypto’s status is Intangible property.
Taxes on gains: 50 percent (capital gains tax); 25 percent (self-employed).
According to the government of Canada, “using digital currency does not exempt consumers from Canadian tax obligations,” which means that cryptocurrencies are subject to the Income Tax Act.
That involves selling cryptocurrencies for a profit, mining and doing crypto-to-crypto transactions — in that case, if, for instance, Bitcoin is used to buy Ethereum, Bitcoin is considered to be sold for its value in Canadian dollars at the time of the transaction.
Taxes for investments, which apply to cryptocurrencies, suggest 50 percent for any such gain in Canada. High-volume traders will have to file their taxes with the Canada Revenue Agency as being self-employed, setting aside around 25 percent of their income.