India's Potential Cryptocurrency Tax Showcases Universal Federal DilemmaMay 23, 2018, 11:30AM
India's Central Board will review a new proposal for a cryptocurrency tax GST tax. It's implementation may clarify some regulatory matters.
Governments around the world continue to explore options for regulating and taxing the burgeoning cryptocurrency market. In the latest news, India's government is exploring a Goods and Services Tax (GST) on cryptocurrencies. The Central Board of Indirect Taxes and Customs will oversee the planning before tabling the proposition to the GST Council for finalizing. The rate is expected to be 18 percent.
India recently banned all financial firms from dealing with cryptocurrency. It's unclear if latest action represents a move towards reversing that position. To classify cryptocurrencies as an intangible asset will force governing bodies to establish valuation policies. The current proposal would price cryptocurrencies based on "transaction value in rupees or the equivalent of any freely convertible foreign currency." Further clarifications surrounding the market and a cryptocurrency tax would also serve to clean up a cluttered gray area for regulation.
Decisions made over the next couple months could establish an important precedent for the Indian economic landscape. An aggressive proactive form of taxation will deter bad actors questionable use cases for cryptocurrencies. Governments around the world are keeping a close eye on the industry and implementing tax collection policies. Poland's Ministry of Finance has recently suspended tax collection on virtual currencies prefering to conduct an "in-depth analysis" of the space. The United States is targeting digital asset tax reform at this summer's 2018 Accounting Change for Finance Leaders Conference.
Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.