Is Crypto Tax Fair?
TLDR: Not really. If anything they should probably be taxed like forex trading.
The idea behind crypto currencies is that it's a non-government currency, not property. However the government in many countries view crypto currencies as property with associated capital gains implications. Essentially what happens is that if you save money in crypto, then want to buy goods (or other crypto) with that crypto, you are going to have to keep track of any gains, which can quickly become a nightmare.
In contrast, forex trading is also taxed, however profits are summed at the end of the year and any gains are just additional income added on top of whatever else you earned for the year. This limits the chance that you didn’t sell high and held through the tax year, only to have to pay sometimes 60-70% tax on your remaining portfolio during a bear market, as has been the case with many of our users.
But does the government care? Probably not. It is a common strategy for the government to heavily tax things it doesn’t like, and as competition to fiat currency, you can be sure they don’t like crypto. And so we join the ranks of tobacco, alcohol, and gambling taxes.
If you can’t ban it, tax it.
All content in this article is general information only and does not constitute financial, tax or legal advice. It is not intended to be used by anyone for the purpose of financial advice, legal advice, tax advice, tax avoidance, promoting, marketing or recommending to any other party any matter addressed herein. For tax, financial or legal advice please consult your own professional.
Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that we are not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. CA Mitesh and Associates is Mumbai's leading Cryptocurrency Taxation Firm which is committed to helping people navigate complex tax laws and banking regulations. Our main aim is to assist the individuals with applicable laws & regulations compliance and providing support at each & every level to make sure that they stay compliant and grow continuously. For any query, help or feedback you may get in touch here - Appointment with CA
Comments