Today, crypto-currencies are widely used not only as a payment method, but also as investment tools. Digital currencies created a legal vacuum, which is gradually filled with new rules and regulations.

Bitcoin (Bitcoin), the most popular crypto currency, replaces conventional money and has real value (for example, bitcoins can be exchanged for US dollars, euros and other classical and virtual currencies). Usually operations with bitcoins are conducted anonymously through the Internet. This unregulated virtual currency is not dependent on any central bank or government.

Crypto currency tax Although in many countries bitcoin has not yet received the status of legal tender, some tax authorities have already recognized its importance and proposed specific taxation rules. Let's briefly review the tax status of bitcoin in the US, EU, Germany, Japan and Australia.

US Internal Revenue Service (IRS) for tax regulation considers bitcoin as property, not as currency. Any transactions using bitcoins are taxed in accordance with the principles applicable to property taxation. Thus, the owners of bitcoins must inform the IRS of all their transactions.

US tax residents who sell goods and services in exchange for crypto currency are required to include the cost of obtained bitcoins in the annual tax return. It is calculated on the basis of a fair market price in US dollars at the date of receipt (t. exchange rate on that day).

Crypto currency is considered as a capital asset in the hands of a taxpayer (similar to shares, bonds and other investment instruments), so it is obliged to take profits and losses into account when calculating the taxable base. The profit arises in the case when the sale price in US dollars exceeds the adjusted purchase price. A loss arises when the sale price is lower than the adjusted purchase price.

Miners mining bitcoins on their own equipment are also subject to taxation. Miner is required to include the fair market value of the extracted crypto-currency in its annual gross income.

From wages paid in bitcoins, income tax and other charges (for example, contributions to the social insurance fund) are withheld,. The tax base for wages in bitcoins is calculated on the basis of the rate of the Crypto currency at the date of payment.

Rent, bonuses, annuities and other payments are also subject to accounting for tax purposes.

For residents who violate the tax legislation in the field of virtual currencies, fines may be imposed. Thus, the key to compliance with US tax laws and the exact fulfillment of obligations to the government is the detailed accounting of all transactions with bitcoins.

The European Union In 2015, the European Court of Justice (the highest court of the EU) ruled that operations in bitcoins are exempt from value-added tax (VAT) in accordance with the regulations governing circulation of currencies, banknotes and coins used as legal tender. Thus, according to the court, bitcoin is a currency, not a property.

Although no VAT is withheld when buying and selling bitcoins, other transactions may be taxed, for example, income tax or capital gains tax. The fiscal status of bitcoin differs depending on the EU country.

United Kingdom In the UK, bitcoin is treated as a foreign currency. The tax rules, which are valid for incomes and losses in foreign currency, apply to transactions with crypto-currencies. In this case, transactions with bitcoins, which are considered speculative, are not subject to any taxes.

Her Majesty's Office for Taxes and Customs Duties (UK tax service) gives quite vague information about the tax status of transactions with virtual currencies. In particular, every operation involving bitcoin "should be considered on the basis of individual facts and circumstances".

Germany Since 2013, bitcoin is considered in Germany a kind of private money. Although the Crypto currency is subject to a 25% capital gains tax, it is withheld only if the profit was received within one year after the receipt of the bitcoins.

Thus, if the sale of bitcoins takes place more than a year after the purchase, it will not be subject to a capital gains tax and the transaction will be treated as "private sale". In Germany, bitcoin is considered to be analogous to other investment instruments, such as stocks or bonds.

Japan In Japan, bitcoin is officially recognized as a means of payment. As of July 1, 2017, sales of crypto currency are exempt from consumption tax. Virtual currencies are treated as "value-equalized value carriers" that "can be used to make payments and be transmitted digitally".

Thus, in Japan, proceeds from operations with bitcoins are considered income from doing business and are subject to corresponding taxes on profits and capital gains.

Australia In Australia, operations involving bitcoins and other crypto-currencies come under the definition of barter agreements. For tax purposes, the authorities consider bitcoin not as a means of payment or a foreign currency, but as an asset.

Companies performing transactions in bitcoins are required to properly document, record and indicate the dates of operations.

Companies receiving bitcoins in the form of payments should indicate their value in Australian dollars and be treated as ordinary income.

On the other hand, operations with bitcoins for personal purposes are exempt from taxation in the following cases:.

* When bitcoin is used as payment for goods and services for personal consumption;.

* When the transaction size does not exceed 10 thousand. Australian dollars.

The extraction of bitcoins and exchange for commercial purposes in Australia are considered exchange trades and are taxed accordingly.