Azerbaijan has joined the growing list of countries that are taxing revenue received in cryptocurrencies.
Revenues received in cryptocurrency in Azerbaijan are subject to taxation, according to Nijat Imanov, deputy director general of the tax policy and strategic research department for the Taxes Ministry, according to the country’s Trend News Agency. Imanov noted the requirement during the second Finance and Investment Forum in Baku on May 5.
If someone buys a cryptocurrency and sells it at a higher price, the profit is recorded as income and subject to taxation, Imanov said, calling it a profit tax for legal entities and an income tax for individuals.
Crypto Activity On The Rise
Purchasing and selling cryptocurrencies on the country’s cryptocurrency market is a popular way of earning money. The market grew rapidly from May to December of 2017.
During this time frame, a person could benefit from as little as $10 in any cryptocurrency, according to Elnur Guliyev, director and founder of Crypto Consulting company. Such a situation does not happen often, he said, noting that the least expensive option is to purchase and resell bitcoin. He said the option still exists, although it is hard to say how long it will continue.
Numerous Countries Fall In Line
Azerbaijan is far from alone in taxing its citizens for revenues received in cryptocurrencies.
U.S. taxpayers have been required to report taxable income from cryptocurrency transactions. They are required to include it as part of taxable wages, realized gross income from cryptocurrency mining, or realized capital gains or losses from the exchange or sale of such currency that is held as a capital asset.
South Africa’s tax agency has told taxpayers that cryptocurrency-related income falls under normal tax rules and can incur capital gains tax.
South Korea’s ministry of strategy and finance is planning to announce a cryptocurrency taxation framework by the end of June. Taxation is expected to start in 2019.
Israel’s official tax authority has confirmed that cryptocurrencies will be like assets and investors must pay capital gains tax.
Thailand’s finance minister announced that investors will have to pay 7% in value-added tax on cryptocurrency tradesas well as a 15% capital gains tax.
France has changed the cryptocurrency classification, thereby reducing the tax rate from a maximum 45% to a flat 19%.
Guidelines in India have been ambiguous as cryptocurrencies are not regulated, but taxation department has stated its plans to collect taxes from citizens.
Featured image from Shutterstock.
Follow us on Telegram.