What is a cryptocurrency and how it works? (Photo: Nasdaq)

CRYPTOCURRENCY MINING TAXATION – LEGAL PROCESS BY POWERHOUSE COUNTRIES

According to a published article from The Medium, cryptocurrency mining has taken the world by storm, but as its popularity grows, the legal basis for taxation needs to be emphasized. Explore here the global perspective.

Cryptography is used by cryptocurrencies to protect transactions and regulate the generation of new units. Although Bitcoin is the most well-known cryptocurrency, there are thousands of others, each with special characteristics and applications.

Cryptocurrency mining taxation is a difficult task. Governments find it challenging to create a stable taxation system due to their decentralized character, lack of precise standards, and fluctuating prices.

Now that the setting has been set, let’s travel the globe and examine how other nations view Cryptocurrency Mining Taxation.

United States of America

The Internal Revenue Service (IRS) of the United States categorizes cryptocurrency mining taxation as property. This indicates that cryptocurrency-related profits earned from purchasing and selling are taxable as capital gains.

Guidelines on cryptocurrency taxation (Photo: Visionary Financial)

Furthermore, those who mine cryptocurrencies or acquire them in exchange for goods and services must declare their income at fair market value under this Cryptocurrency Mining Taxation policy.

European Union

Because each member state has its own tax laws, the European Union (EU) does not have a standardized approach to Cryptocurrency Mining Taxation.

Value-added tax (VAT) is not applied to the exchange of cryptocurrencies for fiat money, according to a decision by the European Court of Justice.

Although there is some consistency within the EU as a result, each nation still has its own capital gains and income tax laws.

United Kingdom

Whether they are sold, traded, or given as gifts, cryptocurrencies in the United Kingdom are liable to capital gains tax when they are disposed of under their Cryptocurrency Mining Taxation policy.

Additionally, those who mine cryptocurrencies or get them as payment must declare the value as income and pay the necessary taxes.

The UK also waives VAT on exchanges of cryptocurrency for fiat money.

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