France has gotten in the way of a long list of new crypto-friendly tax regulations that seek to provide cryptocurrency merchants and their customers with more profits.

The French Nationwide Meeting rejected the regulations on Monday, believing that the present rate of tax exemptions is fair, and thus warrant no changes. At the time of writing, these exemptions stand at 305 euros, though the new laws would have risen this rate to roughly 3,000 or 5,000 euros. Members of the Meeting stated that such a spike would be nothing less than “extreme.”

All Crypto Businesses Are Pooled Together

In addition, the Meeting also turned down regulations that would have granted different rules for enterprises that engage in short-term or occasional cryptocurrency trades and those that did so regularly. A bill was also rejected that would have benefited those who have experienced capital losses on their digital asset portfolios.

Surprisingly, one amendment left out of the Meeting was a 30 percent flat tax set to be implemented for all cryptocurrency transactions. Presently, crypto property is taxed at over 36 percent, which accounts for 19 percent revenue and 17 percent social contributions. The Nationwide Meeting assembly has stated in the past that:

“A flat tax charge is positively welcomed for its simplicity and authorized certainty.”

the tax is described as follows:

“At present, bitcoin good points are taxed at a charge of 36.2 percent, whereas different types of capital good points on different non-real property are taxed at a flat 30 percent. The finance fee adopted a medication to the 2019 price range invoice that may topic gross sales of crypto-assets like bitcoin to the 30 percent flat charge as effectively.”

If the law had gone into effect for crypto-based property, such assets would be subject to the standard 30 percent tax rate rather than 36, lowering fees significantly for local traders.

Regular Crypto Activity in Europe

Over the past year, Europe has become something of a major crypto haven. Iceland, for example, has admitted that it currently requires more electricity to power its many bitcoin mining operations than it does to power all its residences, while Malta has become a central hub for several crypto businesses that have since packed up their bags and moved from Asia due to the continent’s growing (and restrictive) legislation regarding digital assets.

Switzerland arguably stands as Europe’s top crypto-performing nation, housing what’s known as Crypto Valley – an assortment of both blockchain and digital currency-based startups and business ventures.

Will France eventually see the light when it comes to cryptocurrency? Post your comments below.

This post is credited to livebitcoinnews

An anonymous poster on Reddit’s /r/taxes subreddit asks: “Did I ruin my life by trading crypto?” After an initial investment of $5,000, this “clueless college kid”  was able to turn his cryptocurrency portfolio into $800,000 at the peak of last year’s cryptocurrency bull run.

However, his portfolio is now worth only $125,000, and he estimates that he owes $400,000 in capital gains taxes, effectively bankrupting him. The poster, a college from California, claims that he won’t be able to afford the taxes since he only works part-time at Barnes & Noble, earning $12 an hour.

How was he able to turn $5,000 into $800,000? He started by buying Ethereum (ETH) in May of 2017, when ETH was trading around $200. After that:

Well, I went down the rabbit hole and struck gold a few times, hitting 10x’s on multiple alt coins… I brought my 5k initial all the way up to a $880k portfolio in December 2017. Now I should have listened. I should have cashed out, yes. Once I hit $1 million I was going to… I would have been set. And then, JUST like that the market tanks going into the new year.

Just like that, his gains disappeared. As he says above, he didn’t sell towards the top. Instead, he diversified into “more than a few bad ICOs to start 2018.” It’s possible these ICO’s locked up his contributions for months, and by the time the tokens were launched, might’ve already been in panic mode.

This post highlights a big problem with the cryptocurrency market: there are no clear guidelines for taxation. In traditional markets, there are clear rules. This means your broker will tell you every year, around tax season, how much you owe Uncle Sam. Cryptocurrency, on the other hand, is the wild west, and there are no clear cut laws. This means that the poster above didn’t plan to pay any taxes, and only realized his fate when he received a tax form from Coinbase.

The Crypto Tax Nightmare

Despite the poster’s pain, this example should be a cautionary tale for everyone. Cryptocurrencies are taxable in most jurisdictions, and although it’s a difficult process to file, everyone should plan to pay taxes.

If you live in the United States, as the Reddit poster here does, it might be worthwhile to HODL through the massive drawdowns. In the United States, traders are rewarded for holding positions for more than a year by qualifying for “long-term capital gains” taxes. Normally, trades and investments are taxed as ordinary income, which means traders pay somewhere between 10-39.6% based on their tax bracket. Investments that fall under the “long-term” qualification are only taxed at 0-20%, and most people (who make $38,601-$425,800) only pay 15% on long-term capital gains.

This represents a huge discount, but also explains why the anonymous poster is in so much trouble. If he booked $800,000 in profits, and realized them within a year, he would be responsible for short-term capital gains tax. Since he made over $425,800 in income, that means he’ll have to pay 39.6% federal income taxes, or a whopping (estimated) $316,000. The rest of his tax bill, totalling $400,000, could be from state taxes. The user admits to living in California, which has a state income tax of 12%.

Crypto-to-Crypto Trades Taxable

Additionally, it’s possible the poster expected he’d be exempt from taxes by sticking to “crypto-to-crypto” trades. In the past, traders reasoned that they could defer taxes by avoiding cashing out to fiat. Under the “like-kind exchange” exemptions, traders can avoid taxes by selling an asset and using the profits to buy something that’s “like-kind.” Commonly used in real estate, many cryptocurrency traders applied this to crypto, too.

However, as of the 2017 tax reform bill, cryptocurrency trades are no longer allowed under “like-kind exchange.” This means anytime you swap BTC for ETH, this is considered a “sale,” and any change in the price of BTC is a realized gain. This presents an accounting nightmare, and shows why traders should actively prepare for taxes – either by hiring a CPA or using software like CoinTracking.

This post is credited to cryptoglobe

To establish a seamless tax reporting mechanism for cryptocurrency gains in Japan, the Japanese Tax Commission held a debate on October 17, 2018, per a report by the local media outlet Sankei News.

Standardization of Tax Filing Process

According to the report published, the Japanese Tax Commission is contemplating ways by which gains or profits on cryptocurrency trading can be correctly reported to the tax authorities. The general assembly meeting held by the Commission is not surprising as crypto investment and interest continues to rise in the island nation.

Currently, calculation of profits or gains made through cryptocurrencies can prove to be an exhausting task – courtesy of factors like non-existent regulation policies, and the difference in the price of digital currencies among various exchanges worldwide.

Even the way of storing and archiving historical transaction data is not standardized among different crypto exchanges, which only adds to the cobweb of problems. Concerning the meeting held by the Commission, Minoru Nakazato, president of the Japanese Tax Commission, said:

“Since it is necessary to take into consideration frameworks other than the taxation system and business practices, we will hold a small meeting of experts to deepen the discussion while listening to outside opinions.”

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As things stand, any gain from the sale of cryptocurrencies falls under the umbrella of “miscellaneous income” in Japan. This proves to be an excessive burden for the taxpayers as tax rates ranging from 15 to 55 percent are levied on the basis of the actual amount of profits made above a specified threshold value of 200,000 yen per year (approximately $1,800)

Crypto Action on a Surge in Japan

Japan has proved to be one of the hotbeds for cryptocurrencies. Unlike their Asian counterparts China and India, the Japanese have shown a more lenient attitude towards digital currencies along with the willingness to make changes to the existing regulatory infrastructure to imbibe digital currencies in the economy.

As reported by BTCManager on August 10, 2018, Japan’s apex financial regulatory body, the FSA is considering updating the existing regulations concerning bitcoin (BTC) and other cryptocurrencies seeing the rampant speculative trading behavior observed in the investors.

On a more recent note, the FSA also decided to expand its team focused on cryptocurrencies and related activities – observing the growing interest of Japanese companies in establishing a digital currency exchange.

The number of applications seeking approval to establish a cryptocurrency exchange is estimated to reach an unprecedented high in the year 2019.

This post is credited to btcmanager