Treasury experts have put a magnifying glass on these digital assets and tax experts warn about the dangers of failing to comply with the obligations of the treasury. The cryptocurrency market is boiling. Interest in these digital assets has increased since the start of the pandemic. According to the Statista Global Consumer Survey, 10% of the American population already uses or owns cryptocurrencies such as bitcoin. Nigeria is the most attractive state for cryptocurrency exchange according to Statista: 32% of its population say they have these coins and trade them.
This interest in investing in digital assets is concentrated in the younger generations. According to a CNBC Millionaire survey, more than a third of millionaire millennials have at least half of their wealth in cryptocurrencies, and close to 50% own NFTs. Cryptocurrencies have become for a few years the main source of wealth generation for many of these investors.
Given the boom, Treasury experts have already put the magnifying glass on these digital assets. Some tax commissions (in some countries) are looking for a way to surface some profits that escape the treasury, as well as redesign taxes to better tax digital currencies.
But citizens still have many questions about how to manage these assets. Above all, they still do not have a specific regulation. There are some regulations established regarding cryptocurrencies. For example, is European regulation MiCA (proposal for the Regulation of Cryptoactive Markets) that is still in the process of being prepared and is not expected to begin to be applied until at least 2024.
In this sense, one of the issues that most worries investors is how cryptocurrencies are taxed. The doubts range from when they must be declared, going through what taxes must be paid to what sanctions the offenders can face for not complying with the Treasury.
We must start from the fact that the holders of these virtual currencies in our country have to comply, like the rest of the taxpayers, with the obligations of personal income tax and wealth tax. The difference is that the high speculative component of the value of cryptocurrencies can give more than one a scare. For example, the KCS price fluctuates over time in much more extreme ranges than most traditional currency rates.
What Taxes Do I Have To Pay For Cryptocurrencies?
These assets are the virtual representation of a value, and, therefore, are accounted for as part of the owner’s equity. If he is a tax resident in our country, he must declare his possession in the Wealth Tax in case of exceeding the legal threshold for it. Also its transmission, both in the personal income tax and in the tax on inheritance and donations. In the case of the wealth tax, simply for owning the cryptocurrencies and being part of the taxpayer’s wealth and, in terms of income, for the profits (from the transmission or generation of income) obtained during the year with the cryptocurrencies.
After all, receiving cryptocurrencies in inheritance or as a gift is also taxed, in both cases following state and regional inheritance legislation.