Business 15 January 2019Derek Tonin
Bulgaria investigates crypto exchanges to discourage tax fraud
Bulgaria doesn’t want to miss out on any money coming to it from cryptocurrency. As reported by Novinite, a Sofia-based news site, the Bulgarian National Revenue Agency (NRA) will start inspecting crypto exchanges to ensure their compliance with the law. Primarily, they will focus on compliance with tax and social security regulations.
Once the investigation is completed, the NRA will determine if users have been properly declaring their income from the purchase and sales of digital currencies. That income should be declared in annual tax returns and taxed at 10%.
The deadline for individual annual income tax returns this year falls on April 30. The date for companies to submit is March 31.
Considering the downturn the crypto market took in 2018, it would seem that Bulgaria is attempting to bleed a stone dry, as not many investors will likely have profits to report. If there are any that came out ahead, they’ll have little place to hide once the NRA gets their exchange account information.
Bulgaria isn’t the only country to be keen on taxing cryptocurrencies. In December, France rejected calls to lower taxes on digital currencies from their current rate of 36.2%. Spain has also started watching crypto investors, hoping to avoid tax fraud with its 15,000 investors, and Denmark has already made it clear they will go after 2,700 traders for tax evasion, with that number expected to rise.
Japan is taking a slightly less draconian approach to crypto taxation. They are looking to implement a system that will report earnings over JPY10 million ($88,700), which makes it much less of a burden for small, first time investors.
Many new investors all around the world likely got started in the crypto-boom of late 2017, early 2018. Although many probably lost whatever gains they could make, for the very few who came out ahead, it looks like in most places in the world, their government would love to recognize their success with a tax bill.
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