COUNTRIES CRYPTO TAX POLICIES
Countries crypto tax policies. WIth Covid wrecking havoc on the world’s economies, governments have been looking for ways to raise more revenue for needed programs addressing the pandemic. Cryptocurrency has taken the spotlight as the aset class has made huge gains, during the pandemic’s onslaught, catching the eye of officials all over the world. Here are a few of those countries responses to taxing Crypto. Countries crypto tax policies.
Australia. The Australian Taxation Office has provided detailed and regular updates and guidance on the tax treatment of Crypto Currency. If crypto is kept or used mainly to purchase items for personal use or consumption, it may be a personal use asset. It is not a personal use asset if it is kep or used mainly as an investment, in a profit making scheme, or in carrying on a business, so the taxpayer has to pay tax on any capital gain he makes on its disposal. Only capital gains that taxpayers make from personal use assets acquired for less than $10,000 are disregarded for capital gains tax purposes. However, all capital losses taxpayers make on personal use assets are disregarded.
IRS WAGE GARNISHMENT
If mining is a business activity, any cryptocurrency generated is treated as trading stock income, and changes in the value of trading stock throughout the year are included in income and losses. If the mining is not carried out as part of a business activity, the mined cryptocurrencies are taxed first under the CGT regine on disposal. The ATO’s guidance includes a brief reference to airdrops, stating that the creator of a new block is rewarded with additional tokens when the new block is created. The additional tokens are received from holding the original tokens, and their monetary value is ordianry income of the creator when they are derived. The ATO guidance also explains the tax treatment of new crptocurrency received as a result of a chain split, with the treatment depending on whether the new currency is held as an investment or in a business carried on by the holder.