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Crazy Crypto Tax Law In Australia Demands Up To 500% Provisions

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Crazy Crypto Tax Law

Crazy crypto tax law in Australia contains some very harsh provisions that would put the crypto owners in a huge tax burden. These unfair tax laws also apply to tokens which were obtained via hard forks and why is this the case, we read more in the latest cryptocurrency news below.

Companies that also pay their employees in cryptocurrency will have major inconvenience with the taxes which are likely to incur at the end of this year. According to the Australian news outlet platform Micky, one crypto holder had to pay up to 500% tax on his digital assets. Crypto Tax Australia’s Adrian Forza stated that the country’s crazy crypto tax law stipulates the value of cryptocurrency used for tax purposes comes from the price which was set for the purchase.

If one investor buys a token X at $100 and then the price drops to $10, the tax for the token will be based on the $100 purchase price. The crypto tax in Australia is about 40% so that means you would have to pay a $40 tax on $10 worth of virtual currency. Forza declared:

‘’That’s a really unfair outcome because he’s basically received cryptocurrency and the value has dropped significantly and now, he has to pay tax on money he doesn’t have. This is something they will have to change as it is unfair.’’

During the 2018 bear market, the prices plummeted by more than 80 percent across the board so the virtual currency holders in Australia needed to pay unfair taxes. Around the world, the crypto taxes make it possible for users to hold crypto for a longer period of time not to lose their assets on paying the taxes.

Forza also noted that there were some other crazy provisions in Australia’s tax system. For example, the Australia Taxation Office considers Ethereum Classic as the original Ethereum even though nobody else thinks this is the case. Ethereum Classic came after an Ethereum hard fork. The implication of this tax law is that the Ethereum users have to pay capital gains on 100% on their ethereum holdings only because the tax agency considers the purchase price to be zero.

As it was reported in the coming altcoin news, there is another crazy tax law regarding the companies which want to pay their employees in crypto. Now, they have to pay up to 47% on every dollar paid. This extra cost makes it very hard for companies to pay their stuff in Bitcoin which could really dampen the bitcoin or crypto adoption.

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Regulation

IRS Is Hunting Cryptocurrency Traders With Warning & Action Letters

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The latest cryptocurrency news put the Internal Revenue Service (IRS) in the focus. According to reports, the IRS is hunting suspected cryptocurrency holders and traders who may have misreported digital assets on their tax returns. As the sources show, there have been more than 10,000 warning and action letter sent by the authority. Letters such as the 6174-A, 6173 and CP2000 have all appeared in the mailboxes of many cryptocurrency traders all around the United States. A lot of crypto tax software companies are also on the hunt list - and have seen an influx of customers coming to them for tax help out of fear of penalties. As many best cryptocurrency news sites showed, the main problem and reason why IRS is hunting traders is the misreporting of their documents. However, traders claim that the authority does not have all of the necessary information - and that the information they have is extremely misleading. For those of you who don't follow our Bitcoin and altcoin news, cryptocurrencies like Bitcoin in the US are treated as a property from a tax perspective - and not a currency. Just like many other forms of property (stocks, bonds, real estate etc.) the capital gains and losses are incurred on the bills. It also doesn't come as a surprise that a lot of traders are not paying taxes on their crypto activity. This is why the IRS is hunting traders - which is also why it makes sense to start out carrying out these enforcement campaigns. In general, cryptocurrency users are constantly transferring crypto in and out of the exchanges. Therefore, the exchanges have no way of knowing how, when, where or at what cost the cryptocurrencies are acquired. They can only see what appears in the wallet on the specific platform. The second a person transfers crypto in or out of an exchange is when the exchange loses the ability to give users an accurate report detailing the cost basis and the fair market value of the cryptocurrencies. Both of these aspects are mandatory components for tax reporting. All in all, the IRS is hunting traders without all the information. So, if you receive a warning letter from the IRS, you should not panic. As long as you are properly filing your crypto gains and losses, you should be fine.
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First Crypto Banks In Switzerland Are Seen As A “Game Changer”

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Cryptocurrency banks are a new thing on the horizon - and they are already showing up in Switzerland. As sources report, the first crypto banks in the country could open the floodgates to the integration of cryptocurrencies as well as other digital assets in the established financial sector. Some of them include the names of Sygnum and SEBA, which were among the recent provisional banking and securities dealers in Switzerland. They have been awarded licenses by the official Swiss regulator last week - and both entities are interested in becoming fully fledged banks once they complete some of the final routine regulatory hurdles. The CEO of Sygnum Swizerland, Manuel Krieger, was featured on many best cryptocurrency news sites that reported about the first crypto banks. As he said:
“This is the first time such licenses have been granted worldwide, so Switzerland is playing a pioneering role. We now have a responsibility as an enabling platform to help banks and other financial players make the step into the digital asset world.”
Other members of the bank and officials agreed that crypto will apparently "come out of the shadows once these assets are done in a 100% compliant manner" This, according to the official who runs the group's Singapore operation, is a "game changer." What is very interesting is the fact that Swizerland has been one of the leading players in the global adoption of tokenized digital assets and DLT technology. The country is in the process of updating its financial legislation to incorporate the new technology. To remind you with a piece from our altcoin news, Switzerland is also the home to Facebook's Libra cryptocurrency foundation - which was set up in Geneva. Other established players such as the Swiss stock exchange and state owned telecom giant Swisscom are also involved, as well as a number of startups. The benefits of tokenizing all types of financial assets in a purely digital format and then trading them on DLT ledgers are believed to be manifold - and instantaneous settlement might help big time in the future. Even though there are some critical voices about the adoption, the fact that Swizerland houses the first crypto banks is definitely a positive sign for the entire industry.
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China Plans Crackdown On Crypto Mining In Inner Mongolia

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Big news come from China as the regulators of the Chinese autonomous province of Inner Mongolia plan a complete clean up of the province and its crypto mining enterprises. It seems that China plans crackdown on the crypto mining industry in this province. As the local crypto outlet ChainNews reported a while ago, there have been five departments within the province of Inner Mongolia which determined the need to rectify the mining industry in the province. The organizations named included the Development and Reform Commission, the Public Security Department, the Office of the Ministry of Industry, The Financial Office and the Big Data Bureau.
“The virtual currency ‘mining’ industry belongs to the pseudo-financial innovation unrelated to the real economy, and should not be supported," the report summed up, indicating that China plans crackdown.
China's regulatory approach towards crypto mining has been somewhat inconsistent, sources reported. This left it unclear what exactly what the recent notice will mean for miners operating in the province of Inner Mongolia. In a tweet with a reaction to the ChainNews' report, a partner at Primitive Ventures and popular crypto commentator (featured on many best cryptocurrency news sites) named Dovey Wan wrote:
“I doubt this will have any impact.”
What's also interesting is that as of the end of May, China was responsible for 70% of the global BTC mining. At the time, reports showed that China plans crackdown and that regulators were investigating illegal mining operations in Sichuan - a province which is responsible for 70% of the Bitcoin (BTC) mining thanks to the electricity generation of the Dadu River Basin. In April this year, reports in the altcoin news also showed that the National Development and Reform Commission in the country was considering a ban on crypto mining throughout the country. This tentative ban led to speculation that mining would be forced to leave the country or go underground - which was clearly a troubling proposition for the Chinese regulators. China currently houses the majority of the world's hash power and so far, no ban like this has entered into law. Meanwhile, the recent Bitcoin and coming altcoin news show an increase on the markets.
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Netherlands Could Block Foreign Crypto Firms Under New Laws

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The European country of Netherlands could block cryptocurrency entities which are based outside of the country. These businesses may get the boot under the new crypto regulations, the latest cryptocurrency news show. In fact, a report by CoinDesk on the DNB recent registry mandate for crypto companies brought a DNB spokesperson named Tobias Oudejans in the focus. Oudejans said that the current legislation before the Dutch House of Representatives will not only force domestic companies to register with the central bunk - but also that foreign entities will not be allowed to conduct services within the country. This shows that Netherlands could block the foreign crypto firms in total. In fact, foreign entities here include all firms registered outside of the European Economic Zone, a block which constitutes most of the European countries. When asked if the foreign crypto companies will have to create offices within the Netherlands or Europe in order to gain access to the market, Oudejans gave no specific comment. The legislation, according to Oudejans, is still under consideration. According to him, the central bank has already asked all Dutch crypto companies to register before the January 10 cut off date mandated by the AMLD 5. For those of you who don't know, the legislation and central bank registration is based on anti-money laundering concerns. Just like all financial firms, Oudejans noted that crypto firms in the country must register with the Dutch government. It is true that Netherlands could block the foreign crypto firms - but it is also true that a lack of clear regulation in the country is an issue which many Dutch crypto service providers face, according to one local crypto firm. We are talking about Crypto2Cash and its founder PJ Datema. As he told many best cryptocurrency news sites, the latest DNB standards will help mature the market.
“It’s a really nice step. I’m not saying they are embracing crypto. [But] we are finally moving forward after a long period of silence,” Datema said. “It’s good they are taking action. If we want the market to mature and the participants to evolve… you want anti-money laundering (AML) and proper know your customer (KYC),” he summed up.
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