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Portuguese Parliament Rejects Crypto Tax Proposals During Budget Debate

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Portuguese Parliament Rejects Crypto Tax Proposals During Budget Debate

Two proposals to tax crypto assets have failed to gain support from Portuguese lawmakers who are now discussing the state budget. The bids came from minority left-wing parties, while the ruling majority is yet to put forward its own draft to regulate the matter.

Portuguese Lawmakers Stop Motions to Tax Crypto Gains

Members of the Assembly of the Republic, Portugal’s legislature, have rejected two separate proposals to tax profits from crypto investments. They came from the leftist parties Bloco de Esquerda (Left Bloc) and Livre, and were turned down by the majority of the ruling Socialist Party.

The attempts to adopt rules for the taxation of capital gains from crypto assets were made during the ongoing discussions on the country’s 2022 budget, Eco reported. The Portuguese news portal has been following the parliamentary debate.

The development comes after a recent statement by Finance Minister Fernando Medina, who revealed that the government is working on a legal framework allowing the taxation of crypto-related income. He indicated that it’s unacceptable to have tax loopholes for any capital gains, signaling Portugal is preparing to change its tax policy regarding cryptocurrencies.

Portugal established itself as a crypto-friendly destination by maintaining a zero-percent tax rate on profits from private crypto investments. When these gains are not resulting from professional activities, they are not subject to income tax.

Livre’s proposal envisages taxing capital gains from crypto exceeding a threshold of €5,000 ($5,400). The eco-socialist party insisted that the executive power in Lisbon should take the necessary steps to introduce an obligation to declare crypto assets for the purpose of their taxation.

Portugal’s favorable crypto tax regime and relatively affordable costs of living have turned the country into a hub for tech innovations, attracting digital nomads and bitcoin enthusiasts from around the world, including Ukrainians working in the crypto space more recently.

What’s your explanation for Portugal’s decision to change its crypto taxation policy? Tell us in the comments section below.

Thailand Exempts Crypto Transfers From VAT Until End of 2023

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Authorities in Thailand have formally introduced a value-added tax (VAT) exemption for transfers of cryptocurrencies through government-approved exchanges. The tax break, in force until the end of next year, will also apply to digital currency issued by the Bank of Thailand.

Royal Decrees Enforce VAT Exemption for Crypto Trading in Thailand

Investors moving cryptocurrencies and digital tokens through exchanges in Thailand will benefit from a 7% VAT exemption on such transactions. A decree published in the Royal Gazette on Tuesday enforced the tax break retroactively from April 1, 2022. It will be in place until Dec. 31, 2023, local media reported.

The measure, which was approved by the government in March, concerns trading platforms registered with the Ministry of Finance. The decision has now become part of Thai law as it enters into force on the day following its publication in the official journal.

According to the document, the main purpose of the tax relief is to promote cryptocurrency trade on authorized exchanges, allowing crypto transactions to be regulated and carried out under the supervision of relevant departments like the Securities and Exchange Commission (SEC).

Thailand’s Finance Minister Arkom Termpittayapaisit is convinced that the relaxed tax rules will make cryptocurrency exchange in the country more reliable and stable. He was also quoted as stating:

This would encourage Thailand to have an infrastructure and payment system that would be ready for the future digital economy.

Director-General of the Revenue Department Ekniti Nititthanprapas added that crypto trading will be more convenient for investors who will enjoy fair tax treatment and safe transactions while Thailand improves its image in the global digital space.

Another royal decree, also published on May 24, extends the VAT exemption to transfers with a retail central bank digital currency (CBDC) issued by Thailand’s monetary authority. In December, the Bank of Thailand announced it’s planning to start testing the CBDC in late 2022 in transactions between financial institutions and users as an alternative means of payment.

Crypto investment and trading have grown significantly in Thailand over the past few years. In late March, citing the need to prevent various financial and economic threats, the country’s financial regulators took steps to curb the use of cryptocurrencies for payments, with the SEC announcing rules designed to discourage digital asset operators from offering related services.

Do you expect other countries in the region to follow Thailand’s example and relax taxation for cryptocurrency trading? Tell us in the comments section below.

Germany Declares Crypto Gains Tax-Free After 1 Year — Even if Used for Staking, Lending

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Germany Declares Crypto Gains Officially Tax-Free After Holding for 1 Year — Even if Used for Staking, Lending

The German Ministry of Finance has published a letter officially confirming that the sale of crypto assets is tax-free after one year even if the coins are used for staking and lending.

How Crypto Gains Are Taxed in Germany

The German Ministry of Finance announced Wednesday that it has published a letter on the income taxation of cryptocurrency, stating:

This is the first time that there is a nationwide uniform administrative instruction on the subject.

The finance ministry detailed that in a hearing that took place last year, one of the most intensely discussed questions was whether the tax-free holding period for crypto lending and staking should be a minimum of 10 years.

The ministry noted that in coordination with federated states:

The letter now states that the so-called 10-year period does not apply to virtual currencies.

In Germany, cryptocurrency is viewed as “a private asset,” which means “it attracts an individual income tax rather than a capital gains tax,” crypto tax firm Koinly explained, emphasizing that Germany “only taxes crypto if it’s sold within the same year it was bought.”

Koinly further detailed:

As a ‘private sale’ in Germany, crypto gains are completely tax-exempt after a holding period of one year.

“In addition, profits on crypto sales up to €600 per calendar year remain tax-free,” the firm added, noting that previously, “When it comes to cashing in on staked crypto, that tax-free holding period is a minimum of 10 years.”

Citing the letter published by the Ministry of Finance, crypto advisor Patrick Hansen explained on Twitter:

The sale of acquired crypto assets will remain tax-free after one year, even if used for staking/lending.

Parliamentary State Secretary Katja Hessel commented: “For individuals, the sale of acquired bitcoin and ether is tax-free after one year. The period is not extended to 10 years even if, for example, bitcoin was previously used for lending or the taxpayer provided ether as a stake for someone else.”

What do you think about this German tax law? Let us know in the comments section below.

Bitrefill Now Lets You Pay Your Bills, Taxes With Bitcoin

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U.S. users can now pay their bills with bitcoin through Bitrefill’s new Bill Payments service, including taxes.

U.S. citizens can now pay their bills with bitcoin, including taxes.

Starting Thursday, Bitrefill users in the U.S. can use the company’s new Bill Payments service to pay their credit card bills, utilities, healthcare, mortgage payments and 20,000 other types of bills with bitcoin.

“Just like the streaming video services allowed people to ‘cut the cord’ from their cable provider, this lets users take a big step towards cutting the cord with their bank and live bankless,” Bitrefill said in a statement sent to Bitcoin Magazine.

The offering was first launched following the enactment of El Salvador’s Bitcoin Law in September that turned the peer-to-peer (P2P) digital currency into a legal tender in the country. Bitrefill said its Bill Payment service has been growing between 100% and 200% per month since.

The service will penetrate the American market through a waitlist at first, Bitrefill said, due to “scaling constraints.” Users will be granted access to the offering in the company’s mobile apps for iOS and Android in a first come, first served basis as it lays the groundwork for inviting new customers at the fastest pace they can.

Bitrefill said the service will be launched in collaboration with a regulated financial services provider and will require users to verify their account by submitting an identity document and proof of U.S. residency.

Customers will be able to pay multiple bills with only one bitcoin payments as Bitrefill will allow adding multiple bills to the platform’s “cart” before checkout.

Bitrefill will charge a 2% convenience fee on the total bill paid to cover the cost of paying and processing each bill payment as those are not discounted by the provider or payee, the company says in the offering’s web page.

“They say there are only two certain things in life – death and taxes. Now you can pay both your tax and funeral costs with crypto,” Bitrefill CEO, Sergej Kotliar, said in a statement.

Draft Law Regulating Aspects of Crypto Taxation Submitted to Russian Parliament

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Draft Law Regulating Aspects of Crypto Taxation Submitted to Russian Parliament

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.