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How Tax Agencies Are Going After Crypto Traders

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Bitcoin investors have in recent months faced increased pressure from various governments around the world regarding unpaid taxes accrued from their holdings.

Tax agencies across the globe continue the regulatory push that has put crypto under the radar, especially in the aftermath of the massive gains enjoyed during the bitcoin price boom of 2017. And although Bitcoin and other cryptocurrencies have since experienced a major tanking esp. over the last 20 months, the focus has shifted gears. Now tax authorities are keen on having cryptocurrency holders file their tax returns properly, and in some cases, are pushing for penalties on potential crypto tax cheats.

Here is how various governments are reacting to the issue of unpaid bitcoin taxes.

U.S.A

The U.S’ Internal Revenue Service (IRS) recently began sending out crypto tax-related letters to some 10,000 individuals. The IRS letters are to the effect that crypto investors may owe the taxman money for cryptocurrency trades they may have carried out in the last couple of years. 

In 2014, the IRS issued guidance that classed Bitcoin and other cryptocurrencies as property, meaning that trading crypto among other activities is a taxable event. Thus, taxpayers who made profits on their crypto face penalties and tax on cryptocurrencies, ranging from 10% to 37% but the exact tax one owes depends on how long they held the assets.

Stiffer penalties and prosecution

The IRS is after those people who failed to file returns or misreported their crypto taxes. The only good news is that individuals have the option of filing amended tax returns before the agency goes after them. Stiff penalties related to tax fraud or evasion are likely to be handed out to those that do not heed the notices.

United Kingdom

In the United Kingdom, the tax agency, HM Revenue & Customs (HMRC) recently asked several cryptocurrency exchanges to provide customer details for taxation. Affected exchanges included Coinbase, eToro, and CEX.io.

HMRC’s move followed that of IRS and is targeted at using the provided information to track down people who may have failed to pay taxes on their cryptocurrency holdings. The HMRC issued a guideline in 2018 suggesting that crypto holders were required to pay capital gains tax and income tax. The agency has also maintained that it has the power to ask cryptocurrency exchange service providers to submit the required information as crypto trades result in potential tax, an end that falls within the tax body’s jurisdiction.

Generally, the U.K has identified corporate tax, individual income tax, and capital gains tax as chargeable on transactions involving cryptocurrencies.

Sweden

Sweden has begun taking strict action against those who have held or used crypto and failed to declare taxes. A marked increase in crypto usage and investment in the country has seen authorities seek up to 30% in taxes from crypto income.

The reaction from the Swedish Tax Agency (STA) has been swift in recent months. One trader had up to five STA officers raid his house after he received a mammoth tax bill related to his crypto trades. Linus Dunker says that his $2.9 million crypto trades have attracted a tax penalty from the STA amounting to $1 million- that’s almost 300% of the trades instead of just 30%.

Dunker isn’t the only one though. Several bitcoin traders in Sweden have received tax bills, with the STA investigating up to 400 individuals who could be prosecuted for failing to pay taxes on their crypto holdings.

Earlier this year, the agency issued a deadline of May for those who sold, paid for goods or services, or were paid in crypto, to declare their taxes.

Australia

In Australia, crypto holders and traders have been advised to report their due taxes with the Australian Taxation Office. The agency recently issued guidance that classed bitcoin and other top cryptocurrencies as “property” meaning that taxpayers need to pay capital gains taxes on these assets. Crypto taxation in Australia is quite similar to that in the US.

Brazil

Brazil’s Department of Federal Revenue recently issued guidance asking crypto traders to report all their crypto transactions above $7,600 to the country’s National Treasury. The directive went into effect on August 1, and anyone who fails to comply faces fines and interest.

South Korea

South Korean’s National Tax Service recently announced that using bitcoin attracted tax. While it hasn’t gone after specific traders yet, the agency’s reaction to bitcoin’s boom is to find ways of incorporating bitcoin use into the country’s tax rules on capital gains and VAT.

India

The country’s Central Board of Direct Taxes (CBDT) has said that bitcoin traders who fail to file or pay taxes face action. The government recently began sending notices to people it said had not paid taxes on bitcoin.

Switzerland

Switzerland is known as a crypto-friendly country, with several crypto-focused organizations headquartered there. The Swiss government treats bitcoin as a foreign currency, which is how it is classified for taxation purposes.

Overall, miners and those that receive their salaries and wages in crypto need to pay income tax while crypto trading attracts business tax. Traders may, however, qualify for an exemption from capital gains tax if they do not trade in a professional capacity.

What should you note as a crypto trader?

Simply, crypto taxation isn’t going away and filing returns on time is the way to go. It is quite unfortunate that a bigger part of the challenge facing investors and tax authorities is the categorization of crypto for taxation purposes. In this regard, some countries classify bitcoin as property, while others classify it as a commodity, financial asset, or foreign currency. Either way, you should be ready to pay taxes on your crypto. Failure to pay these taxes could result in criminal prosecution and hefty penalties.

About the Author: Robin Singh is the co-founder and CEO of Koinly.io – a cryptocurrency tax platform that automatically generates capital gains reports for USA, Canada and Sweden among other countries.

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RoFX Review – Simplified Trading for Beginners

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RoFX Review
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Developed in 2009, RoFX was tested in the world currency market and started offering successful bids with excellent profits from 2010. It is an EA with a proven AI that provides a fully automatic trading solution. The robot is ideal for beginners who do not have much knowledge or experience in forex trading. Here is an honest review of RoFX based on the information gathered from myfxbook and top forex robot review tests.

How to Get Started with RoFX

You need to know that RoFX is not available for download. However, you can open an account for free on the robot’s official website rofx.net.  After logging in, the trader can choose from the packages available. A trader should select the package which seems to be the most convenient. 

The bigger the deposit, the less of a percentage is paid as performance fees. The trader also has the higher share in the daily trading profit. Daily profit is calculated as 0.38%. There is loss coverage guarantee.

The following packages are available:

  • Trial
  • Easy start
  • Moneymaker
  • Gold
  • VIP
  • VIP PAMM

You may view the details of the packages in the…

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Fear & Greed Index Suggests A Bull in the Bitcoin Market?

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As indicated by Justin Kwo, an analyst director from Bexplus, Cryptocurrency trading is a game of nerves and it cannot withstand the emotional behavior. Traders keep on changing their minds with the sudden and strong market fluctuations. This behavior reflects their psychological instability and prevailing sentiment in a particular time zone. However, in the Bitcoin market, traders’ emotions will determine their trading behaviors, which, therefore, affects the future trend of Bitcoin. 

So, what is Fear and Greed Index?

Alternative.me has the most well-known and respected Bitcoin fear and greed index.

  • Extreme fear can be a sign that investors are too worried. That could be a buying opportunity.
  • When Investors are getting too greedy, that means the market is due for a correction.

To make it precise:

  • When the index drops below 20 it indicates extreme fear.
  • When the index rises above 60, it indicates extreme greed.

The result of Fear and Greed Index is calculated from the following aspects:

Volatility: the program marks wider fluctuations as a sign of fear

Market volume: if buying volumes increase significantly, the greed levels rise, too

Social media: the client monitors, gathers and counts posts on various hashtags, to see how many interactions they receive…

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Origin Protocol Launches Fundraiser to Help Find Vaccine for COVID-19

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Origin Protocol
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Origin Protocol is selling KN95 masks at cost and shipping them to anyone in the US within 3-5 days.  This is just one of the ways Origin is turning its rewards campaign into a fundraiser to support the Coalition for Epidemic Preparedness Innovations (CEPI) — a foundation that is working to accelerate the development of vaccines against COVID-19. CEPI first launched in 2017 with initial funding from the governments of Germany, Japan, Norway and the Bill & Melinda Gates Foundation. To combat the COVID-19 outbreak, CEPI has been moving with great urgency in coordination with the World Health Organization (WHO), who is leading the development of a coordinated international response. 

“At Origin, we admire the critical work that CEPI is doing for people during this outbreak, and are dedicated to support its mission in accelerating the development of vaccines against COVID-19. With successful development and equitable access of these vaccines, we can fight COVID-19 together,” said Max Unger, Head of Community at Origin Protocol.

Shop at ‘Stay at Home’ & Support a Charity

For every purchase made on Origin’s ‘Stay at Home’ shop, the company will donate 100% of the proceeds to CEPI. Powered by Dshop

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