With the increase in popularity and opportunities in the world of cryptocurrencies, it seems transaction of the virtual money could be a source of income for the governments as well. Cryptocurrency has already become taxable in many states. However, many countries are yet to impose taxation on the virtual currency Industry.
Talking about the countries, South Korean Government has made the profits from crypto, free from any taxation. But Germany is not considering this tax-free logic. Even though the country has approved bitcoin as a legal currency, various rules have been set in regards of the tax-system of bitcoin. For example, buying bitcoin will be taxable (VAT) but if the bitcoin is sold after at least one year from the purchase, the profit will be free from any sort of taxation.
Denmark’s taxation system for bitcoin is quite friendly for individual investors and only the cryptocurrency companies are liable to pay taxes just like any other business standards.
Talking about Singapore, individual cryptocurrency investments are tax free as virtual currency has not been made legal. However, the companies dealing with cryptocurrency are liable to pay taxes.
Belarus has made some extraordinary crypto-friendly rules which allows free taxation for individuals as well as the companies for a time period of five years whereas Russia, sharing the same Economic union(Eurasian economic union), has imposed taxes of 13% and 24% on the crypto-gains on individuals and companies respectively.
Moving on to United States, some states have shown green flag to cryptocurrency by exempting taxes whereas other states could not loose the opportunity to make some profits from taxation on cryptocurrencies. Henceforth, Arizona has managed to enroll itself as the first state in US to impose tax on virtual currency. Similarly, Georgia may also follow the same path by accepting taxes for cryptocurrencies. On the other hand, Wyoming, a state in western United States, has exempted virtual coins from taxation.