Bruno Le Maire, the French minister for the economy, has revealed that the government will not be imposing taxes on crypto-to-crypto trades. The policymaker made his statement in an interview with Bloomberg on September 12, 2019, stating that they will only be taxing cryptocurrency gains when they are converted into fiat.
As for the country’s reasons for doing this, Le Maire stated that they believe gains left in crypto shouldn’t necessarily be subjected to any taxation requirements. He said, “We believe that the moment the gains are converted into traditional money is the right time to assess tax,” while adding that the Value Added Tax (VAT) will also only be imposed when a crypto asset is used to make purchases.
The move actually makes a lot of sense, not least of all because it provides more freedom for cryptocurrency users to apply their assets and make trades without worrying about any taxation requirements.
Other countries within the European Union are also beginning to make clarifications on how cryptocurrencies and crypto activities will be taxed within their borders. Late last month, Jornal de Negócios, a local news medium in Portugal, reported that the country’s tax authorities had declared a tax exemption on all cryptocurrency trades and purchases.
The tax authority itself clarified the report in an official ruling, adding that crypto trading in fiat currencies, as well as crypto remuneration payments, will be exempted from the VAT.
In addition to all of these, the news medium added that there would be no income tax imposed on cryptocurrency earnings in Portugal as well.
Crypto users in the United Kingdom might not find things as easy as those in the other two countries. Last month, as Bitcoin Magazine reported, Her Majesty’s Revenue & Customs (HMRC), the payments and taxation authority in the U.K., had launched an inquiry into crypto exchanges and their user bases. The HMRC had sent letters to several cryptocurrency exchanges, asking for information about their customers’ transactions and identities.
According to the report, the HMRC’s inquiry was in a bid to prevent tax evasion from crypto traders living in the U. K.
It’s still unclear how the British authority plans to impose taxes on crypto users, or whether it will ask for evaded taxes to be repaid. However, given the level of oversight that it plans on getting, it seems likely bitcoin traders in the U.K. crypto community won’t be enjoying tax exemption for much longer, unlike their counterparts in France and Portugal.
Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.