Tax

Proposed Crypto Mining Ban in Norway Fails to Gain Support in Parliament

13/05/2022 by Idelto Editor

A push to prohibit the energy-intensive proof-of-work mining of cryptocurrencies in Norway has been rejected by the majority of lawmakers. The ban had been suggested by the far-left Red Party which also didn’t win backing to raise an electricity tax for crypto miners.

Norway Will Not Ban Bitcoin Mining

The parliament of Norway has considered and voted against a draft law banning the minting of digital currencies based on the proof-of-work concept. The legislation, which was proposed by the communist Red Party in March, was supported only by two other leftist parties, SV (the Socialist Left Party) and MdG (the Green Party).

“We are obviously disappointed with the majority here,” Red lawmaker Sofie Marhaug told the E24 news portal. She added that the Norwegian society must determine its priorities regarding power usage. Her party says bitcoin mining is extremely energy-intensive and insists on putting an emphasis on the needs of other industries and climate change goals.

However, as Marhaug pointed out, the majority in the Storting, Norway’s legislature, wants to prioritize the market, and “give the bill to Norwegian electricity consumers.”

The Red also failed to win support for a proposal to revise the electricity surcharge for mining data centers, accusing the Labor Party (Ap) and Centre Party (Sp) of breaching a pre-election promise. The two parties had announced they would seek a full electricity fee for mining farms.

While households, many businesses, and the public sector currently pay 0.15 kroner (approx. $0.02) per kilowatt-hour of spent electricity, the industry, including data centers, enjoys a reduced levy of just 0.0055 kroner per kWh.

In February, the Norwegian government said it will try to avoid imposing a crypto ban, but made it clear it was considering various measures regarding the electricity consumption in the sector. In November, Norway admitted it’s mulling over ways to limit the environmental impact of bitcoin minting and may support a Swedish proposal for a European ban on proof-of-work mining.

“In a time of energy scarcity and challenges with cutting emissions, it is particularly harmful that power is wasted only to enrich individuals rather than being used for socially beneficial purposes,” the three leftist parties said. However, the parliamentary majority has objected to the politically motivated discrimination against mining data centers.

What do you think about the debate in Norway on the future of the crypto mining industry? Share your thoughts on the subject in the comments section below.

Apartment Sold for Bitcoin in Portugal After New Regulation Allows Property Deals in Crypto

08/05/2022 by Idelto Editor

An apartment in Portugal has changed hands, with the buyer paying directly in cryptocurrency in a reported first for the country. The home was purchased for 3 bitcoins without conversion to euros, under a new regulation permitting real estate deals with digital currencies.

Buyer Pays With Bitcoin for Apartment in Braga, Portugal

A three-room (two-bedroom) apartment in the Portuguese city of Braga has been bought with cryptocurrency without any conversion to fiat money. Local media reports have described the deal as a first in the history of the country’s real estate market.

The new owner paid 3 bitcoins (BTC) for the home, worth around 110,000 euros at the time the purchase took place. The title deed was transferred in Porto’s Póvoa de Varzim district this past Thursday, May 5, the business news portal Idealista unveiled.

The purchase was made with the help of real estate agency Zome, the law firm Antas da Cunha Ecija, and partners from Switzerland’s Crypto Valley. The Chairman of the Portuguese chamber of notaries also participated.

Buying property directly with cryptocurrency is now possible in Portugal thanks to a new provision recently adopted by the Order of Notaries, the body which regulates notary activities together with the Ministry of Justice.

In the past, the coins had to be converted to euros before a payment to a seller was made. Now, the real estate acquisition can be a 100% crypto operation, in which the digital money is exchanged for the rights to the property.

Certain procedures must be followed to conduct such sales, to comply with anti-money laundering rules. The source of the fiat funds — a bank account — with which the digital assets were purchased, has to be indicated and the public address of the crypto wallet presented, before the coins are transferred.

News of the crypto-funded property deal comes after a recent report by the Bank of Spain revealed that Portugal’s share in the volume of crypto transactions in the eurozone exceeds the weight of its gross domestic product (GDP) in the single currency area’s economy.

With relatively affordable costs of living and a crypto-friendly tax regime, Portugal has become a hub for tech innovations, a home for digital nomads and most recently for refugees from Ukraine’s crypto sector. Gains from the sale of bitcoin and the like are not subject to income tax in the country.

Do you expect other European nations to allow real estate purchases through direct cryptocurrency payments? Let us know in the comments section below.

Draft Law Regulating Aspects of Crypto Taxation Submitted to Russian Parliament

17/04/2022 by Idelto Editor

A bill updating Russia’s tax law to incorporate provisions pertaining to cryptocurrencies has been filed with the State Duma, the lower house of parliament. The legislation is tailored to regulate the taxation of sales and profits in the country’s market for digital assets.

Russian Deputies to Review Law on Crypto-Related Taxation

The federal government of Russia has submitted to the State Duma a draft law introducing rules for the taxation of transactions involving cryptocurrencies. The bill will make the necessary amendments to Russia’s tax code to answer a range of outstanding questions.

One of the aspects is the application of value-added tax (VAT). According to the authors, VAT should be levied on services provided by operators of platforms issuing or exchanging digital financial assets (DFA), a term encompassing cryptocurrencies in current Russian law.

The tax base for “digital rights,” another legal definition that covers security and utility tokens, will be determined as the difference between the sale and acquisition price of the token, Forklog reported, quoting the document.

Russian entities owning tokens will pay 13% of the revenues from their digital rights while the tax rate for foreign companies will be 15%. The issuers of digital financial assets will be obliged to file tax reports on the parties involved and the transactions made during the current year by Feb. 1 of next year.

The law will not affect Russians holding cryptocurrencies, Andrey Tugarin, managing partner at the law firm GMT Legal, told the crypto news outlet. He explained that the bill concerns only the market for digital financial assets and digital rights. The tax regime it introduces mirrors the one applicable to the securities market.

Parallel to the tax bill, the Russian government is also preparing to file a new draft law “On Digital Currency,” recently revised and submitted to the cabinet by the Ministry of Finance. The department is a proponent of the legalization of cryptocurrencies while the Bank of Russia opposes it.

Expectations are that the two pieces of legislation will both be adopted during the spring session of the State Duma. They will complement the law “On Digital Financial Assets,” which went into force in January 2021 and only partially regulated the country’s crypto sector, to establish a comprehensive legal framework for cryptocurrencies.

Do you expect Russia to quickly adopt the new crypto laws? Let us know in the comments section below.

Venezuelan Government Approves New Tax for Cryptocurrency and Foreign Currency Transactions

05/02/2022 by Idelto Editor

The Venezuelan Government has approved a new tax that would affect transactions made in foreign currency and cryptocurrency transactions. Approved by the National Assembly of the country, the tax, called the “large financial transactions” tax would collect up to 20% over transactions made in currencies different from the national fiat currency or the Petro.

Venezuelan Government To Tax Crypto Transactions

The Venezuelan government has approved a new tax that will affect transactions and payments made with cryptocurrencies and foreign currency. The tax, which is called the “large financial transaction” tax, seeks to incentivize the use of the national currency that has lost its relevance in a multi-currency environment like the one present in Venezuela in the last years.

The tax establishes that any transactions or payments made in foreign currencies or cryptocurrencies, without a limit quantity, will have to pay up to 20% over each movement, depending on the nature of it and the companies or persons making them.

The percentage to be paid will be established by the national government after the official publication of the law, but in its first application, it will collect 2.5% on these payments.

Cryptocurrency Volumes Recognized And Reactions

The inclusion of cryptocurrencies in this law is a recognition of the importance of this kind of currency and the volume that is moved in the country in regard to transactions and payments. This is the opinion of Aaron Olmos, a national economist. However, the main objective of the law would be to tax transactions made using dollars, which are 65% of the operations and payments in the country according to estimates.

Jose Guerra, a Venezuelan economist, thinks that this will be a hit to the pocket of the Venezuelans, that use foreign currency and cryptocurrencies to store their savings. About this, Guerra stated:

It must be recognized that foreign currency has solved part of the cash problems, reserves of value and savings of everyone in the country. Also crypto assets, to a certain extent. Making this decision is trying to privilege one means of payment over another.

Another secondary effect of this law would be the incentivization of the creation of black markets to avoid the payment of this law, according to Oscar José Torrealba, director of the Economic Knowledge Dissemination Center in the country. Torrealba stated that merchants and people would transact outside the law encouraged by tax pressure.

What do you think about this new tax established by the Venezuelan government? Tell us in the comments section below.

IRS Special Agent on Crypto: ‘We See Mountains of Fraud in This Area’

27/01/2022 by Idelto Editor

A special agent with the Internal Revenue Service (IRS) says the tax agency is “seeing mountains and mountains of fraud” in the cryptocurrency space. The IRS criminal investigation unit is trying to train all of its agents on crypto and non-fungible token (NFT) issues because “this space is the future,” he stressed.

IRS Special Agent Says Crypto Is Rife With ‘Mountains and Mountains of Fraud’

A special agent in charge of the IRS’ criminal investigation division in Los Angeles, Ryan Korner, talked about cryptocurrency at a virtual event hosted by the USC Gould School of Law Tuesday. He was quoted by Bloomberg as saying:

We’re just seeing mountains and mountains of fraud in this area.

He explained that non-fungible tokens (NFTs) and crypto in general are prone to market manipulation, adding that high-profile individuals could influence crypto prices with just one tweet.

Noting that celebrities are not immune to the tax authority’s criminal probes, the special agent clarified: “We’re not necessarily out there looking for celebrities, but when they make a blatant or open comment that says ‘Hey, IRS, you should probably come look at me,’ that’s what we do.”

Korner detailed that a range of crypto-related activities are of concern to law enforcement agencies, such as people paying millions of dollars for assets, like NFTs, that don’t seem to have that kind of inherent value. He noted that criminals can use that to their advantage to launder money.

The IRS seized $3.5 billion in crypto during the fiscal year 2021, which represents 93% of all funds seized by its criminal investigation unit during the same time period. The tax agency expects to seize billions of dollars more in cryptocurrency this year.

The IRS’ criminal investigation division is trying to train all of its agents on crypto and NFT issues because “this space is the future,” the special agent opined, adding that the agency is also looking to increase collaboration and share information with other federal agencies.

What do you think about the IRS special agent’s comments? Let us know in the comments section below.