Welcome to Latam Insights, a compendium of Latin America’s most relevant crypto and economic news during the last week. In this issue: Paraguayan lawmakers introduce a bill to ban cryptocurrency mining, Brazil to change crypto taxation framework, and a poll finds that Latam believes CBDCs might help combat corruption in the region. Paraguayan Lawmakers Introduce […]
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Brazil Eyes Crypto Taxation Changes in New Bill
Brazil is on the verge of presenting a new crypto taxation scheme proposed in a bill to be presented to the National Congress in the coming days. The bill proposes taxing cryptocurrencies the same way as shares and capital instruments with fluctuating exchange rates, instead of categorizing them as goods. Brazil to Change Cryptocurrency Taxation […]
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Major Party in South Korea Proposes to Defer Cryptocurrency Taxation
The People Power Party, a major political party in South Korea, has proposed to defer cryptocurrency taxation for up to two years as part of a general election pledge. The Korean government has already postponed establishing cryptocurrency taxation until 2025 when income generated from cryptocurrencies will be taxed at 22%. South Korea to Delay Cryptocurrency […]
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Ukraine to Adopt Europe’s Crypto Rules, Clarifies Taxation
Officials have revealed that Ukraine intends to implement the crypto market rules approved by the European Parliament. While the government is already moving in that direction, the tax service has issued a clarification regarding the taxation of income resulting from cryptocurrency transactions.
Ukraine Set to Incorporate EU Crypto Regulations Into National Law
A regional leader in crypto adoption, Ukraine now plans to follow in the footsteps of the global leader in crypto regulation, the European Union. Statements in Kyiv have indicated that Ukrainian authorities are going to incorporate the new EU norms into their country’s legal framework.
On Thursday, European lawmakers gave their final approval to the Markets in Crypto Assets (MiCA) package. It is the world’s first comprehensive attempt to regulate the crypto space. It introduces licensing for crypto service providers and mechanisms for investor protection.
“This is a truly historic event, I am sure Ukraine will be one of the first countries to implement this regulation into national legislation,” commented Yuriy Boyko, member of the National Securities and Stock Market Commission of Ukraine (NSSMC).
Boyko also said that draft provisions to achieve that are almost ready and officials will soon start talks with the main stakeholders. “The NSSMC, together with its partners, is actively working on the launch of the virtual assets market in Ukraine, and the MiCA regulation was taken as the basis,” he emphasized.
“Together with our colleagues from the NSSMC, we are already working on the implementation of some of the MiCA provisions so that crypto assets are legal in Ukraine as well,” confirmed Yaroslav Zheleznyak, member of Ukraine’s parliament, who took to Telegram to express his excitement about the regulatory development.
Lawmakers in Ukraine, a candidate for EU membership, first adopted a draft law “On Virtual Assets” in September 2021, but the bill was returned by President Volodymyr Zelenskyy, revised in accordance with his recommendations and passed again in February 2022, before he signed it into law. It should enter into force after deputies in the Verkhovna Rada approve relevant amendments to the Tax Code.
While the nation’s crypto tax rules are yet to be introduced, the Lviv Office of the State Tax Service of Ukraine has taken the matter in its own hands and clarified the taxation of crypto-related income for private individuals. “Income received by an individual from the sale of cryptocurrencies is included in the total annual taxable income,” the regional tax administration explained in a notice published this month.
Do you expect other non-EU countries in the region to introduce the MiCA rules in their jurisdictions? Tell us in the comments section below.
Revised Bill Suggests Prison Time for Russian Crypto Miners Evading Taxation
A draft law designed to regulate crypto mining in Russia introduces harsh penalties for miners failing to report digital assets to the state. In its latest revision, the bill also threatens to punish those who organize illegal trading of cryptocurrencies with imprisonment and hefty fines.
Forced Labor Awaits Miners and Traders Who Operate Outside Law, According to New Bill
Russian crypto miners will have to report their income and provide tax authorities with detailed information about their digital assets, including wallet addresses, to avoid being prosecuted by the state. That’s according to draft legislation that’s currently undergoing revision in Moscow.
A bill meant to regulate Russia’s growing coin minting industry was initially submitted to parliament in November. However, its adoption was later postponed for this year and lawmakers now plan to resubmit it with amendments envisaging serious consequences for miners that don’t abide by the rules.
The Russian Ministry of Finance, which is working on the changes, now wants to introduce severe punishment for those who evade declaring their crypto. This includes fines in the millions of rubles and prison time, the online news outlet Baza reported.
According to amendments to the Criminal Code prepared by the department, if miners fail to report their income twice in the course of three years and the value is over 15 million rubles (close to 0,000), they will face up to two years of imprisonment, a fine of up to 300,000 rubles, and even forced labor for up to two years.
If the amount of unreported assets exceeds 45 million rubles in fiat equivalent (almost 0,000), the punishment will be harsher — up to four years in prison, a fine that can reach 2 million rubles, and forced labor for up to four years, the report further detailed.
Updated Law Takes Even Stricter Stance on Crypto Trading
Crypto mining enterprises will have two options to sell the extracted cryptocurrency — on a foreign exchange or on a Russian trading platform established under “experimental legal regimes” which are yet to be established. This is something that the Bank of Russia has been insisting on in order to support the legalization of mining.
Exchange operators, banks or other legal entities, will be added to a special register and any coin trading activities outside the described legal framework will be viewed as violations of the law, the penalties for which are even heavier than those prescribed for miners. “Illegal organization of circulation of digital currencies” will lead to prison sentences of up to seven years, a fine of up to 1 million rubles, and forced labor for up to five years.
In the latest version of the mining bill, the authors have also added provisions concerning the prevention of money laundering. According to the texts, cryptocurrency owners “are obliged to provide the authorized body with information on their operations (deals) with digital currency at its request.”
What is your opinion about the new amendments to the Russian bill on crypto mining? Share your thoughts on the subject in the comments section below.
CZ Binance Hints At Rising Taxation Being Detrimental To Indian Crypto Industry
The Indian government has maintained a bullish stance on its income tax on crypto assets. The government demonstrated this with the proposal of a Cryptocurrency and Regulation of the Official Digital Currency Bill in 2021. However, cryptocurrencies and NFTs are currently not regulated in India. The RBI even tried to ban crypto in 2018.
Although the proposed “Cryptocurrency and Regulation of Official Digital Currency Bill” was never implemented, the government’s stance on crypto is still unclear. However, while still weighing its stance, the Indian government implemented a new law to tax gains and income from virtual digital assets (VDAs).
The new tax policy came to focus at the Singapore Fintech Festival (SFF) held from November 1 to 4. At the event, the Binance CEO, Changpeng Zhao (CZ), pointed at the high tax rates as a killer of the crypto industry.
The Singapore Fintech Festival is one of the most anticipated events in the crypto and Fintech industry. The event has more than 60,000 participants and 850 speakers representing banks, global financial services firms, and policymaking bodies.
Crypto Exchanges Face Decline In Volume Due To High Taxes
During a panel discussion at the SFF event, CZ said the new crypto tax in India, which became effective in April, may kill the industry. That is because the tax is outrageously high, with a 30% capital gains and 1% transaction tax on all digital assets transactions. The local crypto exchanges reported a 90% decline in the volume of activities since the policy became effective in April.
Aside from the high tax rates, the government tightened the regulatory processes. Crypto platforms now have to follow more extensive Know your customer (KYC) and security approaches.
In 2019, Binance acquired an Indian crypto exchange called WazirX. However, there was a recent issue surrounding WazirX’s frozen assets. In a short argument between CZ and WazirX’s CEO, CZ revealed that Binance never completed its deal with the embattled crypto exchange. Instead, the CEO stated that Binance only provided wallet services to WazirX as tech solutions.
As per reports, WaxirZ is going through a decline in sales volume and laid off 40% of its workforce in October.
India May Introduce More Tax Policies
At the beginning of this week, the Central Board of Direct Taxes (CBDT) in India proposed a reformed common ITR form. The board intends to introduce the new form as a replacement for some series of ITR forms. The draft ITR form contains fields that require information on foreign businesses with a user base in India.
Some tax experts commented on this move. They said it is an attempt to include digital assets and Web3 firms incorporated outside India in the Tax policy. However, the latest Nasscom report stated that India has more than 450 crypto and Web3 start-ups.
But 60% of the 450 start-ups are registered in crypto-friendly countries with clear regulatory models.
Featured Image From Pixabay, Charts From Tradingview
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Crypto Trading Volumes In India Sink Due To Heavy Taxation, What’s Ahead?
Cryptocurrency trading is taking another pattern and shape in India due to the implementation of taxation laws. As a result, the traders are experiencing a different turn in their transactions lately in the country. The new rule in India for 1% taxation on every transaction has been enforced from July 1. Also, the government has a taxation rule of 30% on crypto income for traders, investors, and other participants in the field.
Subsequently, trading volumes have made a drastic drop over the applied law. On average, India’s three prominent crypto exchanges recorded up to 72.5% dip since the enforcement of the Tax.
Related Reading | Mounting Support For Bitcoin At ,000 As Market Ushers In A New Week
From July 1, India enforced the Tax Deducted at Source (TDS), creating a negative stance for traders. This has brought a plunge in the overall crypto trading volumes in the country, as witnessed by most exchanges. According to the reports, the record on July 3 shows that CoinDCX had a 90.0% drop in trading volumes. On the part of BitBNS, the decline was about 37.4%.
Data from CoinGecko revealed slight stability in volumes after crashing to the low values. However, the average record shows a downward move of 56.8% in the volumes.
Most notable crypto traders are currently on edge with the outplaying of recent events in the Indian crypto market. One of the traders, Shounak Shetty from Mumbai, disclosed his opinions concerning the new taxation of 30% on income and TDS.
On July 4, Shetty stated that such rules would damage visionary talents in the country. Shetty mentioned that he is now seriously contemplating the profitability of sticking with the Indian exchange. To him, other places like Dubai seem more inviting and conducive to higher gains.
Crypto Exchanges Record Drastic Revenue Drop
The low trading volumes drastically reduced the overall generated revenues for Indian exchanges. On July 4, Crypto India, a YouTube channel in the country tweeted that with a trading fee of 0.1%, most exchanges could only see small revenues. The combined daily funds for Zebpay, WazirX, and CoinDCX are ,649 as volume levels hit the lows.
Related Reading | Active Ethereum Addresses Touch 2020 Levels, Will Price Follow?
Some leading exchanges like WarizX, CoinDCX, BitBNS, and Zebpay have a drop in the average daily transaction volume. As of July 4, the value is .6 million as against the June value of .6 million.
In an explanation, Anuj Chaudhary, Policy Analyst in WazirX, stated that the TDS of 1% covers all virtual assets. Chaudhary gave his explanation on YouTube during The WazirX Show for the June 30 episode. The listed assets include cryptocurrencies, NFTs, metaverse, or other transactions executed on public blockchains.
The daily chart shows crypto market rebound possible | Source: Crypto Total Market Cap on TradingView.com
However, few exemptions to the tax exist. These include gift cards for discounts or goods, rewards points, and mileage points. Others are cards for subscriptions on websites, applications, platforms, and incentives void of monetary considerations.
Featured image from Pexels, chart from TradingView.com
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Thailand Government Disperses Confusion Surrounding Cryptocurrency Taxation
Before now, some countries have mapped out some crypto taxes for transactions on cryptocurrency assets within their jurisdiction. Thailand is one of the countries that proposes some taxation plans.
As the new year begins, the revenue department of Thailand is setting up its measures for implementing its tax plans on crypto traders this January. The move is to provide more clarifying information on the tax over crypto-related activities.
According to the director-general of the revenue department, this month will mark the finalizing of the criteria for tax calculations which will be on crypto trading profits. The statement’s release was one week following its government’s disclosed plans to levy crypto miners and traders with a capital taxation gain of 15%.
The total crypto market cap falls below trillion | Source: TradingView.com
A Bangkok Post article on Tuesday reported the instruction of Prayut Chan-o-cha, the Thai Prime Minister, to the revenue department. He told the department to analyze the issue and map out the taxation plans for the investors and the entire public.
Related Reading | Upside Potential in NFTs is Massive Says, Gary Vaynerchuk
Following the Prime Minster’s instructions, the department has engaged the Bank of Thailand in a discussion. The talk is also the country’s Stock Exchange and Security and Exchange Commission.
Cryptocurrency Investors React On Taxation Plan
The Thai Digital Asset Association, while seeking clarifications, got in touch with the revenue department on Sunday.
A local media reports that the association seeks to know more concerning withholding taxes and capital gains. Suppakrit Boonsat, the President of the Association, stated that many cryptocurrency investors accept the taxation. However, their concern is making moves that may violate the Revenue Code.
Some traders are worried that there could be back taxation or penalties to trades and profits in previous years.
According to a spokeswoman from the government, the authorities are not posing any hindrance to industrial development and innovation with fintech included. However, she warned that a rush to accept crypto trading without a thorough understanding could lead to a crypto crisis.
Thailand intends to place its new taxation only on profits from miners and traders. In addition, there is an exemption of the country’s digital asset exchanges. With the largest affiliated with commercial banks and billionaire business tycoons.
Related Reading | January Proves Turbulent For Investors But NFT And GameFi Seems To Be Eating Good
According to the latest filing requirements, those that fail to comply with the rule will be heavilThethe move. In addition, they issued some warnings to individual businesses and commercial banks concerning adopting the country’s digital assets as pa through the movement options.
In December, through the move Bank of Thailand mentioned its plan of drawing out measures for regulating crypto-related activities. The regulation, which was tagged ‘Red Lines,’ will cover both businesses and individuals within the crypto industry.
Featured image from Pixabay, chart from TradingView.com
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Op Ed Tendencies and Opportunities of Bitcoin Taxation in the EU
Each member state in the EU sets its own tax rules. It is still possible, however, to identify key trends and opportunities in cryptocurrency taxation. nThe post Op Ed Tendencies and Opportunities of Bitcoin Taxation in the EU appeared first on Bitcoin Magazine.n
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British Regulators Ruminate on Crypto Rules While Standing Firm on Crypto Taxation
n The bear market has given British regulators more time to consider crypto legislation, but not necessarily less reason to take a hard line, especially in terms of taxationn
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