Taxation of cryptocurrencies, what you need to know when using digital money

Gradually, digital currencies are taking up more and more of a place in our lives; some use cryptocurrencies exclusively for investment, while others use them for daily payments.

At the same time, not everyone realizes that profits received from using cryptocurrencies are taxed according to the same scheme as profits from exchange rate differences in transactions with conventional currencies.

Therefore, an unpleasant surprise may be a letter from the tax service offering to pay taxes and fines for not paying them on time.

It would seem, what kind of taxes could there be if you are not engaged in stock exchange speculation, but use this type of asset exclusively for your needs.

But the general rule applies here: if you bought something cheaper and sold it more expensive, the difference between the purchase and sale will be considered profit, on which you need to pay income tax.

That is, if you bought Bitcoin at the beginning of the year for $20,000, and at the end of the year you sold it for $30,000, the amount of 10,000 is taxable income.

The tax rate depends on which country you live in - Russia - 13%, Ukraine - 18%, Belarus - 13%, Kazakhstan - 10%. Moreover, each country may have its own nuances, tax-free minimum income or terms of currency ownership:

The very moment of tax obligations occurs when selling cryptocurrency, after which you need to pay tax and at the end of the year enter the profit received into your income tax return.

If you trade cryptocurrency professionally, then some cryptocurrency stock brokers may independently deduct income taxes when you withdraw profits from the trader’s account.

Taxation of exchange trading on Forex - https://time-forex.com/info/nalogi-s-zarabotka-na-foreks

If you keep your money in cryptocurrency and do not exchange it for a national one, there are no tax obligations and you can sleep peacefully.

Operations with stablecoins

Many users think that there is no need to pay tax when transacting with stablecoins, because these cryptocurrencies have a stable exchange rate.

The only time you don’t have to pay is when you exchange stablecoins for the US dollar or another currency to which a specific altcoin is tied.

But in the case of national currency, a different situation is observed, for example, you bought 100 Tether (USDT) at the rate of 50 rubles per coin, and a month later you sold it at 60 rubles. That is, despite the fact that you used a stablecoin, you still made a profit in the national currency.

Is it possible not to pay tax on cryptocurrency transactions?

In principle it is possible. There are two options in which paying the tax will lie solely on your conscience:

• Using cash payments – that is, buying and selling immediately for cash without the use of bank cards and accounts.
• No withdrawal to a bank account - you can pay for a product or service with cryptocurrency, your purchase will remain anonymous and there will be no tax obligations.