Could America and the UK be relaxing their cryptocurrency taxation laws?
A trio of big economies have been looking again at their cryptocurrency taxation laws…
by Manoj Sharma for CNR
Recently, Japan relaxed its tax laws around crypto trading and businesses. Reportedly following their lead, the US and UK are now said to be re-reviewing their laws that currently have digital assets under high taxation levels.
As part of their drive towards mainstream adoption, cryptocurrency and blockchain firms continue to push back against outdated legislation and resistance. Recognising this, three of the biggest economies of the world – the UK, the US and Japan – are taking steps to regulate cryptos and manage the taxes they generate sensibly.
The Japanese law changes will categorize the profits from mining or trading as ‘miscellaneous income’, which will subject to the taxation of about 55% for high-profit earners. Financial regulators in Japan have introduced a legal framework to guide the utilisation of cryptos. Still, the taxation policies there still could use some simplification.
In the case of the USA, its House Ways and Means committee has asked the IRS (Internal Revenue Service) to define terms over the taxation of cryptocurrencies. The US committee is looking towards ensuring that laws governing the use of cryptos will be streamlined and simplified, to allow payment of taxes from crypto proceeds.
Finally, in the UK, the government here has also demanded clarifications over tax for crypto assets. Cryptoassets Taskforce, the UK agency comprising of officials from the FCS, its Treasury, and the Bank of England has been given the responsibility to address this situation. After investigating the potential threat and benefits to the economic and financial sector of the country, a report was issued by the team that presents a position on blockchain and virtual assets.
Whether these respective nations ultimately make things clearer and easier longer term remains to be seen. But at the very least, a clearer way to deal with crypto is on their respective agendas.