Crypto tax

Biden to Step Up Crypto Tax Enforcement to Help Fund $1 Trillion US Infrastructure Plan

30/07/2021 by Idelto Editor

U.S. President Joe Biden and lawmakers have agreed on the details of a roughly $1 trillion bipartisan infrastructure package with measures to step up tax enforcement around crypto assets.

Taxing Crypto Transactions to Fund US Infrastructure Plan

The White House announced Wednesday that President Joe Biden and a bipartisan group of lawmakers have agreed on the details of “a once-in-a-generation investment” in the U.S. infrastructure.
The bill will be taken up in the Senate for consideration, the White House stated, adding that “In total, the deal includes $550 billion in new federal investment in America’s infrastructure.”
Measures to step up tax enforcement around crypto assets were added to the infrastructure bill at the last minute to raise funds to finance the infrastructure plan.
The $550 billion will be spent over the next eight years on roads, bridges, high-speed internet, public transport, electric vehicles, airports, and shipping ports, among other areas.
The measures impose heightened reporting requirements on crypto brokerages and exchanges. They will be required to provide details on cryptocurrency transactions of $10,000 or more to the Internal Revenue Service (IRS).
The provisions are expected to raise an additional $28 billion from cryptocurrency transactions.

A fact sheet published Wednesday by the White House explains, “In the years ahead, the deal will generate significant economic benefits,” adding:

It is financed through a combination of redirecting unspent emergency relief funds, targeted corporate user fees, strengthening tax enforcement when it comes to crypto currencies, and other bipartisan measures, in addition to the revenue generated from higher economic growth as a result of the investments.

What do you think about using crypto tax to fund the U.S. infrastructure plan? Let us know in the comments section below.

South Korea Proposes Law Allowing Direct Seizure and Sale of Crypto Assets to Pay Overdue Taxes

28/07/2021 by Idelto Editor

The South Korean government has proposed an amendment to the tax code to allow the country’s tax authority to seize and sell cryptocurrencies belonging to delinquent taxpayers. “The revision will allow direct seizing without court-approved change in ownership records. Assets held by tax dodgers in the form of digital coins will no longer evade seizure and forfeiture,” said a government official.

Korean Government Wants Ability to Seize and Sell Cryptocurrencies of Delinquent Taxpayers

South Korea’s finance ministry announced the 2021 Tax Law Amendment Bill Monday, which is part of the government’s annual review of its tax system.
The bill includes a proposal to empower the country’s tax authority, the National Tax Service (NTS), to seize and sell cryptocurrencies belonging to tax delinquents starting Jan. 1, 2022, the Korea Times reported.
The government explained that the number of cases where tax delinquents use cryptocurrencies to hide their assets is increasing. The bill aims to crack down on tax evasion by crypto owners.
Under the proposed law, crypto exchanges must cooperate with the authorities and will be required to transfer cryptocurrencies to the government immediately upon request.
In case of non-compliance, properties may be searched and assets may be confiscated as deemed necessary by the authorities. The proceeds from the sale of seized crypto assets will go into the state coffer.
Korean lawmakers have voiced concerns that current regulations make it difficult to confiscate crypto assets which must be done under the existing bond seizure regulations. Not only can the process be disputed but a court-granted change in ownership records also cannot be applied to crypto assets that lack physical presence, the publication conveyed.
A ministry official was quoted as saying:

Property seizure procedures cannot be applied when the assets to be claimed by the government are kept in electronic wallets. The revision will allow direct seizing without court-approved change in ownership records. Assets held by tax dodgers in the form of digital coins will no longer evade seizure and forfeiture.

“Going after tax evaders is part of South Korea’s broader probe to tighten oversight of crypto markets to root out money laundering and other financial crimes using cryptocurrencies, as President Moon Jae-in looks to expand the tax base to fund increased welfare spending,” Reuters described.
The finance ministry said it will submit the revisions made to the 16 tax codes by Sept. 3. The proposal needs approval from lawmakers to make it enforceable.

What do you think about this new crypto confiscation proposal by the Korean government? Let us know in the comments section below.

Brazilians Who Held $1,000 in Crypto Last Year Must Report It on Tax Returns by End of May

30/05/2021 by Idelto Editor

Taxpayers in Brazil have only a couple of days left to file their annual tax returns. Investors who had more than 5,000 reals worth of cryptocurrency in 2020, a little less than $1,000, are obliged to report the funds on their income tax declarations this year. Brazilians who fail to do that on time face hefty fines.

Deadline for Tax Filing in Brazil Expires Midnight May 31

Brazilian citizens are required to file their 2021 income tax returns before June 1. This year, the deadline was extended by a month due to the coronavirus pandemic which took a heavy toll on South America’s largest economy. Failure to report revenues and tax obligations will result in fines starting at around $30 and going up to 20% on the tax due, Portal do Bitcoin warned readers recently.

Taxpayers who kept over 5,000 reals worth of coins in their wallets, or $960 at the current exchange rate, must report the crypto holdings to Receita Federal, the country’s internal revenue service. This year, the tax agency adopted dedicated codes on the assets and rights form for bitcoin (BTC) – 81, other cryptos such as ETH, BCH, XRP, and LTC – 82, and digital tokens – 89.

Although Brazilians are obliged to report the cryptos, not all of them will have to pay tax as it’s levied at capital gains exceeding the monthly exemption limit of 35,000 reals (approximately $6,700). Crypto profits above the threshold will be charged with capital gains tax according to a progressive scale, the news outlet elaborated.

Brazilians Who File Their Tax Declarations on Time Will Avoid Penalties

Submitting a declaration that’s not completely correct is the lesser evil than missing the deadline. Brazilians who have reported their assets on time are allowed to make corrections later, but those who fail to lodge their tax returns before June 1 will be facing penalties. And citizens that deliberately evade taxation can be fined up to 150% on the tax amount. Ana Paula Rabello, who specializes in crypto accounting, has been quoted saying:

A taxpayer who has not filed their declaration yet needs to remain calm and do nothing hastily to avoid the risk of paying more or less tax. What needs to be done now is to immediately start preparing the information.

The timely filing of the tax return is essential, Rabello stressed, or taxpayers will have issues with banks and the revenue service if they attempt to use unreported cryptocurrency. “Crypto investors must always remember that undeclared bitcoin cannot be used,” warned the accountant who has provided other tax tips in a free e-book published by Portal do Bitcoin, in which Rabello advises Brazilians how to report their crypto holdings on the 2021 income tax return.

What rules regulate cryptocurrency reporting and taxation in your country? Let us know in the comments section below.

South Korea to Impose a 20% Tax on Crypto Mining Activities

08/05/2021 by Idelto Editor

The cryptocurrency industry in South Korea keeps facing regulatory challenges, and it seems that dust is far from settling. Now, crypto miners will be required to pay taxes, following the same path as digital assets traders.

Ruling to Take Place Starting 2022

According to a report published by Donga, miners should be accountable for paying taxes by deducting the amount from their earnings.

Expressly, officials from the South Korean Ministry of Strategy and Finance are set to apply a new rule for those who earn tokens over $2,220 annually by imposing a 20% tax rate.

However, regulators clarified that crypto miners would be able to deduct their electricity from the taxable income total in the filings, as those are considered as “necessary expenses.” An official from the Ministry of Strategy and Finance cited by Donga commented on the matter:

You have to prove how much you have mined the virtual currency by putting your computer in a specific place and how much the electricity bill came out.

Transaction fees from the total income will also be considered on the taxation scheme. Furthermore, digital asset miners in the country should submit their tax declarations every year in May, detailing the won value of the virtual currencies mined over the last financial year, the report said.

The new tax ruling could take effect starting next year in January.

Is the Crypto Taxation Becoming a ‘Hot Potato’ for the Government?

South Korea has been strengthening its stance towards imposing taxes on all crypto-related activities. As Bitcoin.com News reported early this year, the government will start taxing virtual currency trading profits in 2022 with a 20% tax.

But financial watchdogs have also been actively overseeing and detecting tax evaders who had not declared their crypto holdings in their submissions.

In fact, the Seoul metropolitan government recently seized digital assets worth $25 million from hundreds of investors who allegedly committed tax-related crimes.

Such conjuncture is being taken by some political parties to catch younger voters for the upcoming presidential elections, as the measures have sparked a negative backlash among that population in South Korea.

What are your thoughts on taxing crypto miners in South Korea? Let us know in the comments section below.

South Korean City Threatens to Seize Cryptos From Tax Evaders

15/04/2021 by Idelto Editor

Crypto tax evasion is becoming a hot potato for the authorities in some Asian countries, such as Japan and South Korea. A South Korean city is now actively fighting against tax evaders who are suspiciously reporting meager earnings in their filings.

511 Individuals in the Authorities’ Eyes

According to Gugkje News, the authorities of Gyeongju, in North Gyeongsang Province, are aware of several possible cases of crypto tax evasion where individuals are reportedly hiding money into cryptocurrencies without reporting them before the tax authorities.

As the new “Specific Financial Information Act” rules enforced the monitoring of the crypto exchanges to combat money laundering and tax evasion, Gyeongju City and the North Gyeongsang Province are cooperating with four domestic exchanges to identify the alleged tax evaders.

In fact, Bithumb and Upbit are reportedly providing the data asked by the authorities to analyze possible irregularities.

As of press time, 511 individuals are under investigation, while 68 legal entities are part of parallel inquiries to check if they possess undeclared crypto holdings.

But this is not a special request from the watchdogs, as, by law, crypto exchanges should always report any suspicious transactions performed through their platforms. However, the city is asking for in-depth analysis in these alleged cases.

Furthermore, authorities threatened to seize “and collect” tokens from their wallets if they found irregularities and confirm the tax evasion in each individual involved in the saga.

The Gyeongbuk Province wants to verify if there is, in fact, a deficit of 10 million won ($8,970) “or more” due to the evasion. Gyeongju Mayor Joo Nak-young commented:

We are engaged in the various disposition of arrears to collect arrears for high and high-quality delinquents.

South Korea Keeps Actively Fighting Nationwide Crypto Tax Evasion

Recently, Bitcoin.com News reported that the National Tax Service of South Korea (NTS) identified 2,416 individuals who reportedly hid their assets in cryptos to bypass taxation.

Evaders allegedly used bitcoin (BTC), ethereum (ETH), ripple (XRP), among other cryptos, to avoid being scrutinized by the tax authorities.

What are your thoughts on the threat issued by the authorities in that South Korean city? Let us know in the comments section below.