India is believed to be considering applying an 18% tax on cryptocurrency trading, mining and more…
The Indian government is believed to be considering taxing cryptocurrency trading, according to a new report. Furthermore, the tax may spread to mining cryptocurrency as well.
According to sources known to Bloomberg, the Indian Central Board of Indirect Taxes & Customs is considering applying an 18% tax rate to cryptocurrencies, with a proposal set to go before the country’s Goods And Services Tax Council.
Furthermore, the tax may be retroactive too, leading to bills arriving in people’s inboxes for previous transactions.
The proposed approach from India would classify cryptocurrencies as ‘intangible goods’, in the same way that software is classified. Furthermore, the potential taxation rate could yet hinge on how successful Indian enforcement agencies are in their request for an outright trading ban on virtual currencies in the country. India looks like it needs to decide whether to go for taxation or banning, as it mulls its approach where cryptocurrencies are concerned. Our suspicion is that it’ll resist calls for a ban, and go for tax instead.
Going back to the taxation proposal, Bloomberg says its puts forward that “purchase or sale of cryptocurrencies should be considered as supply of goods, and those facilitating transactions like supply, transfer, storage, accounting, among others, will be treated as services”.
Exchanges would thus need to register with the Goods And Services Tax Council, and pay tax on their commissions. Wallet service providers too would be liable.
Cryptocurrency mining, meanwhile, would be treated as a supply of service under the new proposals. Tax would thus be levied on the miner on the transactions fees or reward that they receive.
Should retrospective taxation be introduced, then the cut off date for that would be July 1st 2017.
It’s an extensive collection of proposals on the surface, but none of this as of yet has been confirmed by the Indian government. Furthermore, Bloomberg’s sources are remaining anonymous for the time being, although they’re said to be “people with direct knowledge of the matter”.
More on this as we hear it.