Kazakhstan will only tax cryptos once they are sold for fiat

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Kazakhstan will only tax cryptocurrencies once they are sold for fiat currencies. The country will also consider cryptocurrency mining as a technological process, not economic.

In a new bill that’s currently being reviewed by the country’s president, the government intends to finally establish a formal taxation model for cryptos. As revealed by local business news outlet Kursiv, the bill doesn’t consider cryptos as ‘real money,’ thus exempting crypto holders from the normal taxes.

The report cites Madi Saken, an analyst at the National Association for the Development of the Blockchain and the Industry of Data Centers of the Republic of Kazakhstan. Saken revealed during a recent blockchain conference that the country’s taxation laws only apply to income made in ‘real money.’ The bill will exempt crypto holders from taxation until they sell it for fiat.

Saken stated, “Tax liabilities only emerge when there is an income in the form of real money, particularly when a cryptocurrency is exchanged for real money, which means it is sold on an exchange. Then, this income in the form of classic money will be subject to taxation.”

The bill will treat crypto mining farms in the same way as data centers. Crypto mining will be considered as a technological process, not as economic. However, if the mining farms offer their mining hardware for use by other entities, it will be deemed an economic activity.

The bill currently sits with the president and will be forwarded to the country’s lower house of parliament this month.

With the bill, the government hopes to make the country a crypto mining hub, Saken added. Already, Kazakhstan has cheap electricity which is crucial for miners. This has seen a number of global mining companies set up operations in the Central Asian country. Bitfury announced earlier this year that it was to open data centers in the country, teaming up with the Astana International Financial Centre. CoinGeek Mining also has operations in the country, having partnered with BNK Energy in 2018 on the country’s largest data center.