Led 22

Bitcoin is Being Increasingly Regulated Across the Globe

· January 22, 2017 · 4:00 am

Countries are reiterating tax specifications as Bitcoin becomes increasingly regulated around the globe amid rising price and popularity. 


Bitcoin Taken Seriously, Increasingly Regulated

Starting the year in the $1,000 USD range, Bitcoin has had an eventful month and January isn’t even over yet! So far, we’ve seen many countries take a new stance on Bitcoin in regard to regulations and taxes.

Although this may cause some commotion in the short-term, as seen with the Public Bank of China inspections, which led to a crash in the price, it’s actually great news for Bitcoin. It means countries are taking Bitcoin seriously (as they should), allowing it to intermingle with their traditional economies, rather than considering national bans.

Although we doubt that Bitcoin will be chosen as the official currency by any country in the near future, 2017 may hold great things for Bitcoin. Below are just some of the countries, who have recently reiterated their stance or are starting to consider regulating virtual currencies.

Poland

In Poland, Bitcoin miners were subject to a 23% VAT when selling the cryptocurrency. This is because mining was considered a service and the act of selling Bitcoin was subject to a fee for this service.

Even recently, in November 2016, a case in the city of Poznan led the Finance Minister to rule that the sale of bitcoins is an act subject to VAT as a supply of services.

poland

However, a recent case in January where a company issued foreign customers invoices in U.S dollars to be paid in Bitcoin led the country to revisit the subject. The Minister of Finance decided that the action selling bitcoins, for which the taxpayer occasionally received as compensation for services rendered, does not constitute an economic activity. Thus, Bitcoin is not subject to VAT.

The Minister pointed out that the sale of virtual currency would be taxed only if the company conducted professional activity in this field (eg. currency, banking services) and charged a commission fee for doing so.

The decision was based on the ruling of the European Court of Justice in October 2015, which stated that bitcoin transactions are exempt from the consumption tax since Bitcoin is used as a means of payment and not as a commodity.

Israel

The Israeli Tax Authority, however, has taken a different stance on the subject and has classified Bitcoin as taxable asset, and not as a currency or payment system.

A new document issued by the Israel Tax Authority on January 12th states that Bitcoin, Litecoin and other virtual currencies are considered neither as currencies or financial securities and are instead taxable assets that are subject to capital gains tax and value added tax (VAT).

israel

Individuals will be required to pay the capital gains tax of 25% every time they sell a cryptocurrency. Companies and individuals that are trading, marketing or mining bitcoin will be taxed as a business and must charge their clients a 17% VAT. Companies that accept Bitcoin payments, will need to classify the exchange as barter, which will lead to extra paperwork for the company.

The document was issued in response to the repeated questions from cryptocurrency users in the country. Although the new tax laws will make the life of cryptocurrency users harder, the regulatory landscape has at least emerged from the uncertain gray area.

China

Although no new regulations have yet been issued by the country, the latest developments suggest they will soon be.

Following the inspections carried out by the People’s Bank of China to domestic exchanges, these have halted margin trading services, which has led some to believe that new regulations are on the horizon.

Trading fees may also be applied to exchanges in China, as seen in the warning posted on BTCC’s official website.

China Bitcoin Core attack

Currently, citizens in China are free to hold and trade bitcoins, although financial firms cannot. The regulatory framework issued by China in 2013 sees Bitcoin, not as a currency, but as a virtual commodity. 

The sale and importation of commodities are subject to a 17% VAT in the country.

Russia

Russia, which has always had a difficult relation with the cryptocurrency has surprised many on this subject by stating that no further action will be taken by the government to prohibit the use of Bitcoin.

Russians_paywithBTC_articlecover_Bitcoinist

Instead, the Bank of Russia will try to attain a better knowledge of Bitcoin and build a regulatory framework around it. Bank of Russia’s Deputy Chairman Olga Skorobogatova stated:

It became clear that it is not straightforward to address Bitcoin with existing financial regulation. Regulators and financial agencies agree to not prohibit the use of Bitcoin. Instead, we want to gain a better understanding of Bitcoin, and build a regulatory framework we have gathered the necessary knowledge.

Nigeria

In Nigeria, where crypto-themed Ponzi schemes like OneCoin and Swisscoin are highly popular, warnings have been issued by two separate authorities, the Securities and exchange commission (SEC) and the Central Bank of Nigeria (CBN).

Bitcoinist_Central Bank of Nigeria

Although no new regulations have been issued, both notices warn users and financial institutions regarding the legal status of cryptocurrencies, which are not seen as legal tender, stating that financial institutions should deal with cryptocurrencies at their own risk.

Both notices mention OneCoin as a cryptocurrency, which demonstrates the lack of knowledge some countries still face when dealing with Bitcoin and other digital currencies.

For more about how Bitcoin is regulated (or unregulated) in other countries, go here.

What’s your take on the recent regulatory developments in the world of Bitcoin? Are they a step in the right direction? Let us know below!


Images courtesy of shutterstock

Show comments

Share
Úno 05

Simplex Offers Bitcoin Exchanges Risk-Free Credit Card Purchase Solution

Source: bitcoin

Bitcoinist_Buy Bitcoin

Buying Bitcoin for the first time remains a major struggle for novice digital currency users. Even though there are plenty of exchange platforms to choose from, as well as peer-to-peer solutions such as LocalBitcoins, people want more convenient options. Simplex is a new startup that wants to facilitate the purchase of Bitcoin through credit cards.

Also read: NXT Announces Version 1.7.4!

Simplex Unifies Bitcoin And Credit Cards

For quite some time now, a lot of people around the world have been looking to buy Bitcoin with their credit card in a convenient way. But there is a valid reason so few Bitcoin exchanges are dealing with credit card payments, as there is a high fraud rate. Funds can be charged back from a credit card payment, but Bitcoin transactions can not, which puts the exchanges at a severe disadvantage.

Simplex, an Israeli Bitcoin startup, may have solved the problem, though. Their service will give Bitcoin exchanges access to an API that makes accepting credit card payments risk-free for them. Not only will this help Bitcoin in gaining higher adoption rates, but it would also further bridge the gap between traditional finance and digital currency.

Up until this point, buying Bitcoin from an exchange usually means consumers have to send a wire transfer. Depending on the region where they live, these transfers can be anywhere from instant to taking five business days to complete. Needless to say, this is far from a perfect solution, although it offers the best financial protection for Bitcoin exchanges.

At the same time, various banks around the world have begun to block transfers made to either buy or sell Bitcoin. These restrictions are hurting the digital currency ecosystem in the long run, as consumers get the idea Bitcoin is unobtainable except by a select few. Plus, not every country has their own exchange, making international wire transfers harder and more expensive.

The main goal of Simplex is to provide convenient and frictionless purchasing methods for Bitcoin. By removing some of the restrictions associated with wire transfers, the purchase should complete almost instantaneously. Every partner will have their payments processed by Simplex, removing any risks associated with this payment provider for the exchange or broker.

Former PayPal Employees At The Helm

It hardly comes as a surprise to hear former PayPal employees are venturing into the world of Bitcoin and digital currencies. Both Netanel Kabala and Erez Shapira have worked many years for the traditional payment processor, and their knowledge will be of great value to the service offered by Simplex.

Speaking of which, the company has allegedly processed over US$3.5m in transactions since going in open beta twelve months ago. That success has attracted attention from investors, including Bitmain and Cumberland, and the recently successful funding round will help the company launch in full over the next few months.

What are your thoughts on the service offered by Simplex? Let us know in the comments below!

Source: Finextra

Images courtesy of Simplex, Shutterstock

The post Simplex Offers Bitcoin Exchanges Risk-Free Credit Card Purchase Solution appeared first on Bitcoinist.net.

Simplex Offers Bitcoin Exchanges Risk-Free Credit Card Purchase Solution

Share