While many people refer to crypto as the “Wild West,” some predict it will only last for a few more years.
According to Thomas Shea crypto tax head at EY Financial Services crypto taxes is a dynamic topic, crypto tax head at EY Financial Services, in an interview says that new legislation may be adopted soon. According to the report Shea stated that “There is a new law that will require reporting for at least some crypto transactions, and there will be major changes when those rules go into effect.”
With the rise in popularity of crypto, policymakers are constantly looking for new ways to raise income by taxing and regulating digital assets, according to the EY executive.
While few people grasp the taxation of their crypto holdings, Shea believes that knowing the changing tax implications of crypto is critical. Market participants must be aware of the “scope of their transactions that may trigger a taxable event and the accompanying reporting requirements,” according to the tax expert.
Even if a cryptocurrency holder exchanges their cryptocurrency for other assets such as Bitcoin (BTC) or Ethereum (ETH), the EY executive points out that this is a “taxable event,” and users must report gain or loss on the disposed of crypto.
Non Fungible tokens are the same way (NFTs). “There is no taxable event if you buy an NFT using fiat,” Shea explains purchasing NFTs using crypto, on the other hand, is handled similarly to a crypto-for-crypto exchange. According to the crypto tax expert, “the gross proceeds less your tax basis in the asset, often including any associated fees/costs.”
Meanwhile, crypto dealers in Thailand are said to be exempt from the country’s 7% VAT on regulated exchanges. Traders in the country would be able to offset losses with gains on an annual basis.
The Indian government recommended a 30% income tax on cryptocurrency revenue in February. Many people were against the proposal because a 30% crypto tax is almost double the corporate tax rate, which is at 16%.