Can Crypto be legalized after taxation?

Today, cryptocurrencies are well known to most people. From January 3, 2009, the first cryptocurrency (bitcoin) creation block was born, and it has grown to the $100 billion investment feast of more than 1,560 cryptocurrencies. In particular, after several times the price of bitcoin in 2017, the highest bitcoin price reached nearly $20,000. Taxation agencies of various governments have long been unable to withstand taxation, and taxation has become an important topic for discussing cryptocurrency regulation.

Unfortunately, this is not easy to handle. Just as the lack of consistency and global uniformity of securities laws for cryptocurrencies, transaction taxation regulation also has the same complex regulatory dilemma. In the case of purchasing goods or services using cryptocurrency, the cryptocurrency is treated as an asset or property. The income is first calculated as the buyer’s taxable income, and then the total value of the transaction is subject to transaction tax. Merchants, sellers and suppliers must collect and submit. But this goes against the cryptos globalization and decentralization. Therefore, all these new “digital economy” rules simply cannot be implemented.

One thing is very clear: the government will not continue to be indifferent given the income that Internet transactions can bring.

Japan: The tax rate is in the range of 15% to 55%.

In February of this year, the National Tax Agency of Japan announced that investors who earned money by investing in cryptocurrencies must file tax returns with the National Tax Agency from February 16 to March 15. Japan has thus become the first country in the world to implement a full cryptocurrency tax program.

United States: Tax evasion or sitting for 5 years

At the end of February this year, US President Trump signed the most controversial tax reform bill, the Tax Reduction and Employment Act.

According to the requirements of the new tax law, cryptocurrency transactions in the past December must be taxed, and cryptocurrencies are donated to others in the form of gifts, or donations to charities are not subject to tax.

After the regulatory news appeared, bitcoin prices fell sharply. The government’s regulation of crypto tends to be strict, and the reason for including crypto in taxation is that crypto is recognized, which is beneficial for the legalization of crypto. I believe that with the introduction of regulations, crypto will erupt more powerfully.