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IRS is Developing ‘Hundreds’ of Crypto Cases Amid Upcoming Tax Season

by Blockchain NewsNovember 5, 2022

According to a report from Bloomberg Law, Division Chief Jim said the United States Internal Revenue Service (IRS) criminal investigation division is developing hundreds of cases involving crypto, and many of the cases are to be made public soon.

The cases are part of the IRS ramping up a plan for the upcoming tax season. In addition, the cases entail sectors around “off-ramping” transactions – a situation where digital assets are exchanged for fiat currency, as well as individuals receiving crypto as payment and not reporting.

This report comes after United States District Judge Paul G. Gardephe granted the IRS permission to issue ‘’John Doe’’ summons on M.Y. Safra Bank to release information about customers who may have failed to remit taxes received from conducting crypto transactions.

IRS Commissioner Charles P. Rettig stated, “The government’s ability to obtain third-party information about individuals who have failed to report their digital asset income remains an important tool for tax evasion.” Charles added that the John Doe summons is a step in the right direction toward ensuring that everyone pays their taxes according to what they earn.

Precisely, Gardephe asked SFOX, a complete crypto dealer that provides crypto services for institutional investors, to produce information about its customers who use M.Y. Safra Bank to make cryptocurrency payments.

The IRS recently created a new category dubbed “Digital Assets” for the different categorizations of assets that are tied to the emerging blockchain industry. The regulator defined Digital Assets as any representations of value that are recorded on a cryptographically secure distributed ledger or any similar technology.

Per the draft bill, investors in the US will be able to see if and how they are supposed to report their digital assets, which include crypto coins and Non-Fungible Tokens (NFTs).

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Portugal Plans to Levy Tax Up to 28% on Crypto Gain

by Blockchain NewsOctober 11, 2022

Europe’s most crypto-friendly nation is planning to levy taxes on digital-currency gains for purchases held for less than a year.

The move is a major policy shift as Portugal currently does not tax crypto gains other than professional or business activities. According to the plan submitted to parliament on Monday, Portugal’s proposed 2023 budget has made a provision to tax gains on crypto holdings held for less than one year at a rate of 28%.

However, the plan has stated that crypto assets held for more than 365 days will remain exempt from taxes.

Besides tax on digital-currency gains, the budget also consists of plans to issue new cryptocurrencies and mining operations as taxable income.

The draft budget still needs to be approved by parliament.

According to the budget plan, other taxes that will be introduced are a 10% tax on the free transfer of cryptocurrencies and a 4% rate on commissions charged by brokers on cryptocurrency operations.

The country has backed the new rules by supporting the crypto legislation in other European countries, including Germany. Investors in these countries do not have to pay taxes if they hold cryptocurrencies for more than a year.

“It’s a regime that fits into our tax system and also to what is being done in the rest of Europe,” Secretary of State for Tax Affairs António Mendonça Mendes said at a press conference in Lisbon.

The country has attracted a growing number of digital nomads and cryptocurrency firms in recent years due to its lack of legislation, combined with affordable living costs and mild temperatures.

According to Portugal’s National Statistics Institute, the country has witnessed a 40% rise in foreign residents over the past decade to 555,299 people in 2021.

Bloomberg reported that some of these residents also benefit from a flat 20% tax on their income or a 10% tax on their pensions, according to the country’s so-called non-habitual resident program.

The Portuguese government first announced plans to tax crypto income in May this year.

Fernando Medina, Portugal’s new finance minister, announced in the parliament in early May that crypto coins will be subject to taxation in the coming future.

Medina stated, “many countries already have systems; many countries are building their models in relation to this subject, and we will build our own”.

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Tagged : Bitcoin / Blockchain / Crypto / News / Portugal / Tax

Portugal Plans to Levy Tax Gain Up to 28% on Crypto Holding for 2023 Budget

by Blockchain NewsOctober 11, 2022

Europe’s most crypto-friendly nation is planning to levy taxes on digital-currency gains for purchases held for less than a year.

However, the plan has stated that crypto assets held for more than 365 days will remain exempt from taxes.

Besides tax on digital-currency gains, the budget also consists of plans to issue new cryptocurrencies and mining operations as taxable income.

The draft budget still needs to be approved by parliament.

According to the budget plan, other taxes that will be introduced are a 10% tax on the free transfer of cryptocurrencies and a 4% rate on commissions charged by brokers on cryptocurrency operations.

The country has attracted a growing number of digital nomads and cryptocurrency firms in recent years due to its lack of legislation, combined with affordable living costs and mild temperatures.

According to Portugal’s National Statistics Institute, the country has witnessed a 40% rise in foreign residents over the past decade to 555,299 people in 2021.

Bloomberg reported that some of these residents also benefit from a flat 20% tax on their income or a 10% tax on their pensions, according to the country’s so-called non-habitual resident program.

The Portuguese government first announced plans to tax crypto income in May this year.

Fernando Medina, Portugal’s new finance minister, announced in the parliament in early May that crypto coins will be subject to taxation in the coming future.

Medina stated, “many countries already have systems; many countries are building their models in relation to this subject, and we will build our own”.

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Tagged : Bitcoin / Blockchain / Crypto / News / Portugal / Tax

EU Policymakers Vote for Blockchain Use to Fight Tax Evasion, Crypto Asset Non-Taxation

by Blockchain NewsOctober 5, 2022

On Tuesday, the members of the European Parliament (MEPs) voted in favour of a resolution that calls for the use of blockchain technology to fight tax evasion and urges member states to coordinate more on the taxing of crypto assets.

The resolution, drafted by Lídia Pereira (a member of the European Parliament), was adopted in Parliament’s plenary session on Tuesday with 566 votes in favour, 7 votes against, and 47 abstentions.

The resolution sets out a framework through which both EU regulators and the member states can achieve the goals of uniformly taxing crypto assets and using blockchain in taxation.

However, the proposal calls for both a clear definition of crypto assets and what would constitute a taxable event. Certainly, a taxable event is any action or transaction that may result in taxes owed to the government. Nevertheless, the recommendation calls for the taxation of crypto assets to be fair, transparent, and effective. It also invites authorities to consider a simplified tax treatment for occasional/small traders and small transactions.

Regarding a taxable event, the proposal considers converting a crypto asset into a fiat currency as a more appropriate choice. It identifies blockchain as one of the major instruments that national administrations can use to facilitate efficient tax collection.

According to the resolution, blockchain’s unique features could offer a new way to automate tax collection, fight corruption, and better identify ownership of tangible and intangible assets, thus allowing for better taxing of mobile taxpayers.

The proposal calls on the EU regulators and member states to better integrate the use of blockchain into different programmes dealing with taxation and cooperation in the field. Member states should also enhance efforts to reform their tax authorities through their modernization efforts, the proposal further urged.

In short, as cryptocurrencies gain more mainstream attraction, it is not a surprise that regulation efforts emerge. Regulators, such as the EU, the IRS, and other agencies, nowadays expect taxpayers and businesses to pay regular capital gains tax on their crypto earnings. This implies that concrete regulations on digital assets are evolving rapidly.

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Tagged : Blockchain / Crypto / DIGITALASSET / Eu / PARLIEMENT / Regulation / Tax

Colorado Becomes First US State to Accept Crypto as Tax Payments

by Blockchain NewsSeptember 21, 2022

Colorado has set the ball rolling as the first U.S. state to offer residents the option of paying taxes using cryptocurrencies.

Governor Jared Polis made the announcement, noting that it was a stepping stone toward making Colorado a digital innovation hub.

“As of right now, the state of Colorado is officially accepting cryptocurrencies as a payment option for all taxes. We’ve been talking about this for a while, and we said we would deliver by the end of the summer — we have,” Polis said.

The Colorado Department of Revenue highlighted that payments would be remitted through personal PayPal accounts, which support Ethereum (ETH), Bitcoin (BTC), Litecoin (LTC), and Bitcoin Cash (BCH).

The governor pointed out that the state would collect the crypto payments and deposit the converted value in dollars into the state treasury. He added:

“Taxpayers can now select cryptocurrency as a payment option, just showing again from a customer-service perspective how Colorado is tech-forward in meeting the ever-changing needs of businesses and residents.”

To foster bold ideas in the state, Polis believes taking the crypto payment route is the way to go.

“As a state, we’re on the forefront of digital innovation, whether it’s applying blockchain and shared-ledger technology as a new model for funding, or whether it’s simply being consumer-friendly and making sure that we allow for the kind of innovation that will disrupt legacy business practices and government practices to make them more efficient,” Polis highlighted.

Earlier this year, the Colorado governor disclosed that the state was in high gear to permit crypto tax payments as early as this summer, Blockchain.News reported.

Polis’s crypto advocacy has not gone unnoticed, given that he was one of the initiators of the Congressional Blockchain Caucus back in 2016. He was also among the first politicians to accept crypto donations for his campaigns.

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Tagged : Bitcoin / Colorado / Cryptocurrency / Cryptoeconomics / Ethereum / JARED POLIS / Litecoin / Payment / Tax

Colorado Emerges as First U.S. State to Accept Crypto as Tax Payments

by Blockchain NewsSeptember 21, 2022

Colorado has set the ball rolling as the first U.S. state to offer residents the option of paying taxes using cryptocurrencies.

Governor Jared Polis made the announcement, noting that it was a stepping stone toward making Colorado a digital innovation hub.

The governor pointed out that the state would collect the crypto payments and deposit the converted value in dollars into the state treasury. He added:

“Taxpayers can now select cryptocurrency as a payment option, just showing again from a customer-service perspective how Colorado is tech-forward in meeting the ever-changing needs of businesses and residents.”

To foster bold ideas in the state, Polis believes taking the crypto payment route is the way to go.

Earlier this year, the Colorado governor disclosed that the state was in high gear to permit crypto tax payments as early as this summer, Blockchain.News reported.

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Tagged : Bitcoin / Colorado / Cryptocurrency / Cryptoeconomics / Ethereum / JARED POLIS / Litecoin / Payment / Tax

Colorado Emerges as First U.S. State to Accept Crypto as Tax Payments

by Blockchain NewsSeptember 21, 2022

Colorado has set the ball rolling as the first U.S. state to offer residents the option of paying taxes using cryptocurrencies.

Governor Jared Polis made the announcement, noting that it was a stepping stone toward making Colorado a digital innovation hub.

The governor pointed out that the state would collect the crypto payments and deposit the converted value in dollars into the state treasury. He added:

“Taxpayers can now select cryptocurrency as a payment option, just showing again from a customer-service perspective how Colorado is tech-forward in meeting the ever-changing needs of businesses and residents.”

To foster bold ideas in the state, Polis believes taking the crypto payment route is the way to go.

Earlier this year, the Colorado governor disclosed that the state was in high gear to permit crypto tax payments as early as this summer, Blockchain.News reported.

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Tagged : Bitcoin / Colorado / Cryptocurrency / Cryptoeconomics / Ethereum / JARED POLIS / Litecoin / Payment / Tax

Argentina’s Mendoza Province Begins Accepting Tax Payments in Crypto

by Blockchain NewsAugust 30, 2022

Argentina’s province of Mendoza announced last week on Friday that it has enabled a system that allows residents to pay taxes using cryptocurrencies.

The system is part of a strategic move by the authorities of the province to modernize the payment of tax and state tributes, tariffs, and trade, thus giving residents many options to fulfil their obligations.

Nicolas Chávez, general director of the Mendoza tax administration authority, talked about the development: “It is one more door to facilitate the payment of taxes to taxpayers. This is a service offered by the payment processor with which we have incorporated new technology, such as virtual wallets and cryptocurrencies.”

Mendoza’s government stated that users will be able to pay taxes through the use of any crypto wallet such as Binance, Bitso, Buenbit, Bybit, Ripio, and Lemon.

According to the authorities, taxpayers can get a QR code and send the funds from their wallets.

An unidentified third-party firm will receive cryptocurrency payments, process and convert them into Argentinian pesos and send the funds to the province’s tax administration.

The system only receives payments in stablecoins, including USDT, USDC, and DAI, among others. In this way, the system maintains volatility out of its operations.

New Government Policies Accelerating Crypto Adoption

Other province and municipal governments in Argentina and major Latin American economies including Brazil, Panama, Panama, and The Bahamas, among others, have also announced plans to include cryptocurrencies as a means of payment for taxes.

In March, Rio de Janeiro, one of the largest cities in Brazil, disclosed plans to allow the payment of a municipal real estate tax with cryptocurrencies beginning in 2023.

In April, the country witnessed a lot of crypto-related changes. The capital city of Argentina, Buenos Aires, announced plans to allow the payment of taxes using cryptocurrencies. During that time, Horacio Larreta, the head of the government of Buenos Aires, said the use case could be implemented in 2023 together with a blockchain-based identification system.

In April, lawmakers in Panama’s National Assembly approved a law to regulate the use and commercialization of crypto assets in the Central American country and even to allow the payment of taxes with these assets in the country. The law also plans to allow the country’s governing bodies to receive payments for taxes, fees, and other tax obligations in crypto assets.

Also in April, The Bahamas government announced plans to allow citizens to pay taxes using digital assets beginning in 2026, according to a white paper that outlines the country’s digital asset strategy.

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Tagged : Argentina / Crypto / MENDOZA PROVINCE / News / Tax

Japan to Introduce Corporate-friendly Crypto Tax Law in 2023

by Blockchain NewsAugust 27, 2022

The Japanese government has proposed a new crypto tax law that will be introduced in 2023 for companies.

Earlier, Watanabe Sota, CEO of Web3 infrastructure firm Stake Technologies Pte, said that in order to prevent entrepreneurs from leaving the country, Japan should minimize corporate taxes on crypto businesses.

The Japanese government has also proposed a 20% tax on income tax on cryptocurrency gains earned by individual investors, with an option to carry forward losses for the next three years from the next year. The Japanese government currently imposes a 55% tax on digital investors.

The reform of the tax law takes into account the development of cryptocurrencies in Japan and does not want to make it difficult for digital asset companies to operate, thereby hindering the development of cryptocurrencies in Japan, as the Japanese government reconsiders the corporate tax system.

The proposal states whether companies that own cryptocurrency assets will be taxed on profits from sales, while the crypto derivatives market must adopt the same tax structure.

The Japanese government said that due to the loss of talent and high taxes, some companies have moved out of Japan to do business in countries such as Singapore or the United Arab Emirates.

For example, after Web3 infrastructure company Stake Technologies Pte relocated the company to Singapore in 2020, he wants the Japanese government to revise the corporate tax from next year. He admitted that if that happened, he would send the company back to his country.

Therefore, Japan needs to formulate loose tax rules to avoid the loss of more digital asset companies

Meanwhile, Japanese lawmakers recently unveiled plans to amend the Law on Punishment of Organised Crime and Control of Proceeds of Crime (1999) in order to give courts and law enforcement agencies the power to confiscate cryptocurrencies linked to criminal activity.

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Tagged : Bitcoin / Blockchain / Japan / Law / Regulation / Tax

South Korea Postpones Proposed 20% Crypto Tax until 2025

by Blockchain NewsJuly 22, 2022

For the second time in about two years, South Korean lawmakers have postponed the implementation of the crypto tax policy, which seeks to impose a 20% tax on accrued gains from digital currency transactions surpassing 2.5 million won ($1,900).

The lawmakers have now postponed the implementation from the earlier scheduled January 1, 2023, until 2025.

Some of the reasons for the postponement were attributed to the current global market outlook, which is unfavourable across the board. The lawmakers were also concerned about the preparatory time for investor protection measures. According to the MBC News, the tax subcommittee did not review the set 20% tax on 2.5 million Won crypto gains.

While South Korea has long been a fan of crypto taxation, considering how the country is a hub of many Web3.0 protocols and investors, President Yoon Suk-yeol, known as a crypto bull, wants to provide a comprehensive regulation for the industry before introducing taxation. It is unclear whether the postponement of the taxation implementation connects to the President’s plans for crypto in the country.

The initiative of imposing crypto taxation in South Korea has long been in the news. The intention of implementing the taxation was unveiled in November 2020, as reported by Blockchain.News at the time.

Per the plans for the crypto and Web3.0 ecosystem in South Korea, President Yoon is proposing developing the Digital Asset Basic Act (DABA), which he plans to introduce to lawmakers anytime in 2023. Prior to this time, crypto trading and custody had already been legalized in the country, and as such, other regulatory moves will have to be hinged on this already set a precedent.

While no one has objected to the exact terms of the crypto taxation save for its time of implementation, industry experts believe the tax imposition is more or less a case of kicking the can down the road.

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Tagged : Crypto / Regulation / South Korea / Tax / YOONSUKYEO