Bittrex iota coin
38 comments
Litecoin future growth
Given the nascent nature of Bitcoin and the evolution of Bitcoin adoption, governments are at differing stages of understanding, particularly when it comes to incorporating Bitcoin into the tax frameworks which already exist.
This article aims to clarify the current status of the UK government with regards to taxation of Bitcoin. The paper focussed on the four key areas of taxation: A brief summary as follows:. VAT is a government tax levied on the value added to a product or service throughout the supply chain to the end consumer.
If a manufacturer purchases materials, he can claim the VAT charged on the purchase back from the government. But when he sells his product, presumably for some gain compared to the original cost of materials, he must pay VAT on the sales price. So overall, the manufacturer has reclaimed an amount of VAT on expenditure, but paid a greater amount of VAT on revenue, and therefore his net VAT contribution will be the VAT rate times the added value that manufacturer has contributed to the supply process.
The guidance contained within the policy paper is very clear for the case of Bitcoin: VAT is not claimable or chargeable on sales or purchases of Bitcoin. VAT is not claimable or chargeable on the mining of Bitcoin. VAT is, however, chargeable in the normal fashion on products or services which are sold in exchange for Bitcoin. So in this respect, the VAT treatment of Bitcoin is very much the same as if it were a currency.
Corporate Tax rules are the same for Bitcoin as they would be for any other currency, with profits or losses on exchange movements between currencies taxable. Tax on corporate profit would be unchanged. Specifically, this would therefore require an individual to include any income received in Bitcoins on their tax return.
A tax typically chargeable on the profit made when selling assets. Bitcoin is subject to Capital Gains Tax as per the normal rules. The above guidance is reasonably clear and straightforward, and relatively encouraging for those transacting or investing in Bitcoin the exemption of VAT on Bitcoin mining activity, for example, allows such mining to take place unhindered in the UK.
The rules are quite specific surrounding other currencies, with conversion to sterling allowed at the rate used by the accounts of the company, only queried if such rate diverges markedly from rates obtained from reputable sources. What is a reputable source for the sterling to Bitcoin conversion rate? As any accountant would tell you, however, best keep detailed records with as much evidential proof as possible should you or your firm be subject to a tax inspection…. Bitcoin Tax Issues in the UK.
Bitcoin Bonuses Are Here!