UK Tax Office Combating Evasion
The United Kingdom Tax Office & Her Majesty’s Revenue Customs (HMRC) has announced a new piece of legislation that requires cryptocurrency exchanges to be reported in tax documents. This is necessary to verify the compliance of citizens maintaining cryptocurrencies in their portfolio.
The HMRC has notified all exchanges operating in the United Kingdom of the new legislation. Three crypto companies, including eToro and Coinbase, have been informed that any users on their platform found evading taxes will face legal repercussions. Exchanges have also been reported that when requested, database documents must be handed over to government officials. This is like the USA, who already had a federal court order against Coinbase.
Her Majesty’s Revenue Customs (HMRC) has provided the exchanges with a guide on how to deal with the taxation process of cryptocurrency and blockchain. However, the HMRC hasn’t provided any details regarding this guide as it would jeopardize the new legislation. From all accounts, this financial regulator deems cryptocurrency as property and not money. This means corporation taxes; capital gain taxes and income taxes could be imposed on exchange n traders in the future.
The Tax Man Returns
It’s not surprising to see that financial authorities have begun working with tax authorities. The regulation of cryptocurrency has been a highly debated conversation amongst government officials in the last twelve months. Recently, the United States Internal Revenue Service provided notice to taxpayers with cryptocurrency holdings that failing to report income could result in significant fines or prison time. It’s estimated that 10,000 other taxpayers in the USA will receive this notice by August 31st.
Brazil’s Finance & Tax Authorities are both collecting data on cryptocurrency exchanges, determining what rules need to be enacted to regulate over the blockchain& crypto markets. The new piece of legislation from Brazilian Authorities is expected to arrive by September 2019. Cryptocurrency exchanges and brokerages maintaining services in Brazil will be required to document all crypto transactions performed quarterly. The value of those transactions isn’t relevant.