Značka: Taxes

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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Crypto-focused software firm Lukka raises $110M, reaches $1.3B valuation

Cryptocurrency accounting and data company Lukka said it had raised $110 million in a new funding round led by hedge fund giant Marshall Wace.In a Friday announcement, Lukka said it had completed a $110 million Series E funding round led by Marshall Wace, with participation from Soros Fund Management — a fund created by billionaire investor George Soros — Liberty City Ventures, S&P Global, and accounting advisor CPA.com. Lukka said it planned to use the funds for “aggressive growth and global expansion strategy” with its current customer base dealing in derivatives, decentralized finance, and other products related to the crypto space.Lukka CEO Robert Materazzi said the crypto ecosystem had entered a “new phase of maturity,” with the firm aiming to address challenges from innovative technology in the industry. The company added the S&P Dow Jones Indices, major accounting firm RSM, and financial services company State Street to its list of customers in 2021.The crypto-focused software firm announced a $53 million raise in March 2021, and recently achieved unicorn status with a more than $1 billion valuation. Serving many active crypto funds, Lukka has reportedly processed $2.1 trillion in unique transactions to date.Related: Lukka Co-CEO Explains How Blockchain Data Saves on TaxesFounded in 2014, the New York-based company focuses on offering blockchain and tokenized asset data to help businesses involved in the crypto space. Among Lukka’s products are tax solutions and data valuations to a digital asset content library.

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Coinbase, PayPal join TaxBit Network for free crypto tax forms

Crypto tax compliance firm TaxBit is working to unite major industry companies like Coinbase and Binance.US within one network to enable free 2021 tax forms for users.The crypto tax software provider on Tuesday launched the TaxBit Network, a certified network aiming to democratize crypto tax calculations and tax forms by providing necessary tax reporting data to all network users for free.The TaxBit Network at launch includes about 20 major crypto-related businesses in the United States, including firms like PayPal, Binance.US, Coinbase, FTX.US, Gemini, Celsius Network, Blockchain.com, Venmo, Paxos, OkCoin and BlockFi. The network will be adding new companies daily, TaxBit’s VP of marketing Michelle O’Connor told Cointelegraph.As part of the initiative, every user of a certified TaxBit network company will be able to receive free and accurate 2021 tax forms. Additionally, a number of participating platforms will be incorporating a quick TaxBit sign-up within their apps to simplify access to tax reporting tools.“If a user has taxable transactions on platforms not part of the TaxBit Network, a cost will apply to retrieve tax forms from out-of-network platforms,” TaxBit noted.The new development aims to eliminate barriers to mainstream crypto adoption by ensuring that crypto users in the U.S. are able to stay tax compliant without spending tons of money. “Historically, the process of generating cryptocurrency tax forms cost individuals anywhere from hundreds to thousands of dollars per year depending on whether they used do-it-yourself software or enlisted an accountant,” the announcement notes.”Our portfolio performance and tax optimization solutions empower year around decisioning versus that tax season-only mentality. With market volatility so prevalent, we provide the retail consumer with tax compliant solutions to optimize their holdings through tax-loss harvesting,” O’Connor stated.Related: US lawmaker planning to introduce comprehensive crypto bill in 2022Binance.US CEO Brian Shroder pointed out that the company’s participation in the TaxBit Network is a crucial step in their commitment to safety and compliance, particularly after President Joe Biden signed the infrastructure bill into law in November.TaxBit is a major crypto-focused tax compliance firm that brings together tax attorneys and software developers to build software to simplify and automate the process of crypto tax reporting. Backed by Winklevoss twins’ family office, TaxBit has seen notable growth recently, securing a $130 million raise at a $1.3 billion valuation in August 2021.

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Crypto trades in Thailand now reportedly subject to 15% capital gains tax

The government of Thailand is progressing in regulating the local cryptocurrency ecosystem by reportedly enacting new tax rules for the industry.Profits from crypto trading in Thailand are now subject to a 15% capital gains tax, The Bangkok Post news agency reported Thursday.The Thai Revenue Department also plans to step up its monitoring duties following a booming digital asset market last year. The department has the authority to collect taxes from crypto trades as profits from such activity are considered assessable income under Section 40 of the Royal Decree amending Revenue Code No.19, the report stated.The finance ministry recommended investors to calculate and report their income from cryptocurrencies in tax declarations in 2022 to avoid legal penalties. The new tax will be collected from all taxpayers who gained profits from crypto, including trading and mining operations.On the other hand, cryptocurrency exchanges are reportedly exempt from new tax requirements.Akalarp Yimwilai, co-founder and CEO at major local exchange Zipmex Thailand, raised concerns about the ongoing uncertainty regarding the crypto tax reporting process and how to calculate profits.“Tax methods and calculations should be more concise, clear and easy to understand. Many people I know want to pay taxes, but don’t know how to calculate them,” Akalarp said.Related: Crypto mining reportedly rises in Thailand due to Chinese crypto banThe new report comes in line with the Thai government’s plans to define “red lines” for crypto in early 2022. Bank of Thailand governor Sethaput Suthiwartnarueput officially announced in mid-December that the central bank was planning to release new regulations specific to the crypto industry early this year.As previously reported by Cointelegraph, financial authorities in Thailand have been considering legislation to collect a 15% capital gains tax on crypto since at least March 2018.

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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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Spreading holiday joy through charitable giving with cryptocurrency

The holidays are the perfect time of the year for giving back, and the rise of cryptocurrencies has created even more opportunities for charitable initiatives. This was highlighted during Giving Tuesday 2021, the Tuesday after Thanksgiving which saw over $2.4 million raised in cryptocurrency from the nonprofit fundraising platform The Giving Block.As crypto philanthropy becomes a new subsector of the cryptocurrency economy, some in the industry believe that crypto donations will only continue to increase. Alex Wilson, co-founder of The Giving Block, told Cointelegraph that last year the organization raised about $4 million in crypto donations, noting that this year, over $100 million in crypto donations will likely be received.According to Wilson, this growth is partly due to the fact that donating crypto is more tax efficient than fiat donations. “Anyone who donates before December 31 is able to claim a deduction for the 2021 tax year. This is a great way to offset some of your gains.” Wilson added that over 1,000 nonprofits currently accept crypto donations through The Giving Block, a few of which include St. Jude, Save the Children and United Way. “Next year, we have a lot of partnerships that are going live and we expect our growth to accelerate. We’re estimating that we’ll process nearly $1 billion in donations next year and work with over 6,000 nonprofits.”Cryptocurrency giving campaigns for the holidaysWhile a number of nonprofits have started to accept crypto donations, it’s also notable that campaigns centered around cryptocurrency philanthropy are being launched this holiday season. For example, in early December, Upbring Innovation Labs — a Texas-based organization seeking to advance technology in the nonprofit sector — launched the Give Big TX Crypto Fund. Ryan Park, vice president of innovation of Upbring, told Cointelegraph that the fund is a joint cryptocurrency campaign working with twelve Texas-based nonprofits: “You can think of this as a ‘cause fund.’ The cause here is to make Texas a better place to live. This is also about showing nonprofits that they can adopt new Web 3.0 technologies to advance. The larger goal overall is to see Texas emerge as a leader in crypto philanthropy.” Park shared that the Give Big TX Crypto campaign is partnering with organizations including Austin Pets Alive, Big Brothers Big Sisters Lonestar, Catholic Charities of Central Texas and eight other nonprofits. He added that the Texas Blockchain Council — a 501 C (6) organization — is also part of this initiative given the group’s involvement in advancing blockchain throughout different industries in Texas. Kelsey Driscoll, senior innovation program strategist at Upbring, further told Cointelegraph that the campaign will be accepting over 40 different types of cryptocurrencies for donations through Dec. 31, all of which are facilitated by The Giving Block. “When donations are made, The Giving Block automatically converts them to United States dollars, so accepting crypto has been just as easy as accepting fiat donations, if not easier,” she remarked. Driscoll added that the subreddit group r/Bitcoin will be matching Bitcoin (BTC) donations when contributions are made to any of the charities supported by The Giving Block. Pawthereum, a decentralized community-run project supporting animal shelters, has also launched a charitable cryptocurrency campaign this month. John Weathers, community manager for Pawthereum, told Cointelegraph that its 12 Days of Crypto Giving campaign allows for crypto donations to be made for specific projects that help animals in need. The Pawthereum project was created as a fork of the meme cryptocurrency project Grumpy Cat Coin, which raised $70,000 in crypto funds for the Sterling Animal Shelter in Massachusetts. Most recently, Pawthereum raised $25,000 through crypto donations for Muttville Senior Dog Rescue, a San Francisco-based animal shelter caring for dogs with special needs. According to Weathers, close to $400,000 worth of crypto has been donated since the campaign was launched on Dec. 14.Related: Is crypto a boys’ club? The future of finance is not genderedNonfungible tokens, or NFTs, are also being leveraged for donations this year. Given that the market growth for NFTs sales is expected to reach $17.7 billion by the end of 2021, this sector is launching one of the largest crypto charity events this season. Known as Right-Click, Give!, this is an auction open to the public hosted on the NFT platform Opensea. The auction ran through Dec. 24, and all proceeds will be donated to Blankets of Hope, a charity that provides warm blankets to the homeless while also teaching kindness to children in school. Mike Fiorito, co-founder of Blankets of Hope, told Cointelegraph that as an avid NFT collector, he is well aware of how welcoming the NFT community is as a whole. As such, he believes that more NFT-focused charitable campaigns will emerge. “There are a lot of kind people in the NFT space that are making fortunes — no matter how big or small — and want to give back,” he said. Park also pointed out that the Give Big TX Crypto campaign is allowing NFT artists to work directly with nonprofits to donate proceeds earned from minting nonfungible tokens. “Many artists doing NFT drops are looking to work with nonprofits and this is an opportunity to do so. We have two NFT projects donating proceeds from their mints to our fund.” Will charitable crypto campaigns catch on?Although there are currently only a handful of charitable crypto campaigns present, the benefits associated with cryptocurrency donations may result in mainstream adoption moving forward. While U.S. donors don’t have to pay capital gains taxes on any crypto assets they donate to a registered nonprofit, there are other technological advantages. For instance, Nawzad Amiri, community leader for Pawthereum, told Cointelegraph that the transparency provided by a blockchain network, along with the speed of transactions, is impressive when it comes to crypto donations versus fiat. Moreover, statistics from The Giving Block found that crypto donors may be willing to contribute more to charity, noting that $11,000 is the average cryptocurrency donation size on The Giving Block. Donation data from Giving USA found that $737 was the average charity donation for Americans in 2020. While the benefits may be clear to some, education seems to be the biggest challenge hampering adoption. For example, although Texas is growing into one of America’s biggest crypto capitals due to its friendly stance toward blockchain and mining power capabilities, Park shared that it has been challenging to bring Texas nonprofits on to the Give Big TX Crypto campaign: “We reached out to about 60 nonprofits and are partnering with 12 total. It seems like this would have been a shoo-in but there is still a long way to go in terms of educating the world on the potential of crypto philanthropy.”Another challenge worth mentioning is that while NFT’s may appear as ideal donation assets, there is uncertainty regarding tax deductions. Fiorito explained that he is still trying to determine if donating NFTs is considered a tax-deductible event. “This is a cloudy area because we are so early in the NFT space,” he commented. Due to this uncertainty, the Right-Click, Give! Auction is also accepting cryptocurrency donations through The Giving Block. Related: Biggest NFT drops and sales in 2021Challenges aside, it’s clear that crypto philanthropy has opened a new door of opportunities to a generation eager to give back. For instance, Park pointed out that the donor base for many of the nonprofits partnering with the Give Big TX Crypto campaign is over the age of 70. According to statistics from The Giving Block, the average age of crypto users is 38 years old, as Wilson added:“The people donating here are individuals that live and breathe Web 3.0 or that have held crypto for a long time. A big piece of this now is just educating those people that this opportunity exists.”

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