Značka: taxation

Crypto taxation could deter investors, says Thai ruling party MP

Thailand’s Committee on Monetary Affairs, Finance, Financial Institutions and Financial Market conducted a virtual meeting to discuss various aspects of crypto taxation.The ruling party MP Watanya Wongopasi posted a summary of the discussion on her Facebook page and urged the Excise department to do their due diligence before imposing any tax on the crypto trading market.In the meeting, Paiboon Nalinthrangkurn, the chairman of the Federation of Thai Capital Market Organisations noted that a tax on stock trading and digital asset trading could decrease market liquidity by 40%. He also warned that heavy taxation would deter foreign and small investors from trading.Yutthana Srisavat, the CEO and founder of iTax proposed a corporate tax or a value-added tax instead of imposing a trading tax. He also made it clear that the decentralized nature of crypto makes it extremely difficult to gather buyer and seller information, making it near impossible to collect tax information.The Thai Excise department noted that the majority of its focus has been on taxing the stock market, and it has made little progress in terms of crypto trading taxation. However, the department assured that they are carefully studying the crypto market and the taxes will be only imposed after careful consideration.Chonladet Khemarattana, president of the Thai Fintech Association advocated for a free market to compete with other nations. He urged the government to monitor the growth of the crypto ecosystem in the short term before moving on with tax implementation.Related: Former Thai SEC chief lays out three critical issues with crypto taxationsCrypto taxation has become a hot topic in Thailand especially after the government proposed a 15% tax on crypto gains. Several current and former executives have come out to warn against the proposal, including former Thai SEC executive Tipsuda Thavaramara. As Cointelegraph reported earlier, Thai Prime Minister Prayut Chan-o-cha has instructed the revenue department to offer clarification for investors and the public on crypto taxation soon. 

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Indian taxman recovers $6.62M from WazirX for evading tax on commission

Indian crypto exchange WazirX has reportedly paid over $6.6 million (49.2 crore rupees) following non-payment of Goods and Services Tax (GST) on trade commissions. The total recovery includes the pending tax of $5.43 million (40.5 crore rupees), the interest and a penalty for non-payment.Government officials from the Central GST and Central Excise committee (CGST Mumbai Zone) recovered the funds from the crypto exchange after detecting a GST evasion of $5.43 million on the commissions. A typical GST fraud involves creating fake invoices without actually moving the goods between the seller and the buyer.Officers of CGST Mumbai East comm’te have detected GST Evasion of Rs 40.5 Cr. on commission of Wazir X Crypto Currency & recovered Rs 49.2 Cr. in cash as GST, interest & Penalty today on 30.12.2021 from Zanmai Labs Pvt. Ltd. @nsitharamanoffc @mppchaudhary @cbic_india @PIBMumbai— CGST Mumbai Zone (@cgstmumbaizone) December 30, 2021According to local media Economic Times, the tax department detected that WazirX uses its in-house WRX tokens for commissions, which were distributed by Zanmai Labs. Further investigation revealed that the crypto exchange missed out on paying 18% tax on the total tokens issued based on its market price.The investigators revealed that WazirX paid GST on the 0.2% commission it charges users for making trades with local currency i.e. the rupee, clarifying:“But in cases where the trader opts for transaction in WRX coins, the commission charged is 0.1% of trading volume and they were not paying GST on this commission.”It is also important to note that WazirX and WRX tokens are owned by Binance, the world’s biggest crypto exchange in terms of the trading volume. According to a Zanmai Labs spokesperson, the non-payment of tax was related to the misinterpretation of GST rules:“We voluntarily paid additional GST in order to be cooperative and compliant. There was and is no intention to evade tax.”WazirX CEO Nischal Shetty previously told Cointelegraph about the importance of regulatory clarity for retail adoption. He also warned that an overnight regulation may harm the progress of the crypto ecosystem and leave open loopholes for bad actors:“There is a $2.5-trillion market out there, and it is not going to wait for any nation to come on board. I’ve been tweeting ‘#IndiaWantsCrypto’ for over 1,000 days with the sole objective of having crypto regulation in India.”Day 1000What a milestone for Indian Crypto!With #IndiaWantsCrypto my mission has been:- Bring positive crypto regulation in India- Spread right information about CryptoLakhs of people have joined this campaignLet’s continue our missionJai Hind #IndiaWantsCrypto— Nischal (WazirX) ⚡️ (@NischalShetty) July 28, 2021

While the concept of GST is fairly new in the region, the government of India has previously agreed to show leniency to defaulters and fraudsters — typically settling such cases with a monetary penalty and a lower probability of jail time. WazirX has not yet responded to Cointelegraph’s request for comment.Related: Indian trade group recommends ‘special class security’ status for cryptoIn an attempt to help the Indian government decide crypto laws, the Confederation of Indian Industries (CII) proposed to treat cryptocurrencies as securities of a special class. A report released by the non-government trade association showed the CII proposes to formulate new regulations around the nascent crypto market instead of regulating them under existing securities law.As Cointelegraph reported, the CII recommended a special provision of income tax and GST laws, which will treat cryptocurrencies as an asset class for tax purposes unless specifically treated as “stock in trade“ by a participant.

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