From the launch of Bitcoin till now, most of the regulators across the globe face issues of taxing cryptocurrencies in a way that is not only fair but quite streamlines. But, in the last few years, there have been a lot of nations that have fully exempted their crypto industries from VAT and different associated charges.
Recently, the Republic of Georgia has exempted cryptocurrencies from value-added tax, as per the reports shared by Bitcoin.com on July 13.
According to the report, Georgia's finance minister Nodar Khaduri, lately signed a bill intended at regulating the entities which trade and mine cryptocurrencies. The change came into effect after June 15. According to the bill, the definition of the decentralized currency is as follows:
“Cryptocurrencies are digital assets that are exchanged electronically and based on a decentralized network. Their exchange does not require a reliable intermediary and they are managed using distributed ledger technology.”
As per the new bill, Georgian crypto holders can exchange cryptos for fiat currency without any need to pay Value Added Tax to the government. If this isn't sufficient, all the citizens with smallest crypto holdings wanting to improve altcoin's transactions online are exempted from any IT on their cryptocurrencies.
Khaduri said that the Georgian Lari will be considered legal tender in Georgia and just like other foreign fiat currencies, the nation will not enable cryptos for payments. Moreover, Georgian crypto miners will be needed to pay VAT, if their operations are being registered abroad. This might force local miners to reallocate their crypto mining business.
The Small European nation presently offers its citizens with highly abundant/ cheap hydropower. Due to very less electricity rates, a lot of Bitcoiners have started to shift in this area to build their startups.
EU based tax authorities have started to try and regulate their crypto markets. For instance, the UK still considers crypto coins as foreign currencies, but Germany views the buying of cryptocurrencies as investments.
Currently, countries such as Estonia and Switzerland are accepting crypto and designed frameworks which are accepting of this novel asset class. Also, note that Estonia and Slovenia presently tax the gains of individual cryptocurrency traders.
As per this article, we should mention that Value-Added-Tax(VAT) is an 'indirect-tax-scheme' which has become a highly essential source of income for many governments around the globe. To put things into position, around 160 nations are using this model with countries such as France are getting more than 'half of their budget receipts' through VAT.
