Bitcoin News reports that gains and profits realized from different transactions and operations from cryptocurrencies will be taxed in Azerbaijan. Government authorities are keen for a piece of pie in the ever growing crypto industry, targeting both individual incomes and corporate profits.
Tax Bracket to Be Expanded to Cover Crypto Transactions
The announcement was made by Azerbaijan’s Deputy Director General of the Tax Policy and Strategic Research Department of the Taxes Ministry, Nijat Imanov, on May 5th, during the second Finance and Investment Forum (FIF 2018) in Baku.
Revenue from crypto operations and transactions will be subject to taxation in the oil rich country. Imanov sought to clarify the Ministry of Tax’s position with regards to cryptocurrencies after some Azerbaijani government officials expressed conservative stances, causing concern among crypto supporters.
If someone bought cryptocurrency and then sold it at a higher price, that amount must be reported as income and subjected to taxation,
This means that profits from organizations based in Azerbaijan will be subject to tax under the country’s tax code. At the moment, the corporate profit tax rate stands at 20 percent. Additionally, the personal income tax is progressive and, as such, money earned by residents both at home and abroad is taxed by the government. Incomes of less than 2,500 AZN a month (>$1,500) are taxed at 14 percent, and a 25 percent tax is imposed on any amounts above this.
Buying and Holding Crypto Is Still a Big Deal for Many Investors in the Country
Although various government officials have taken a conservative stance on crypto, the number of enthusiasts has been growing exponentially in Azerbaijan.The volume of cryptocurrency trading is growing and the state hopes to increase budget revenues through crypto taxation. Crypto markets registered rapid growth between May and December last year.
In an interview with The Trend, the founder and the CEO of Crypto Consulting Elnur Guliyev said, “During that period, even small investments of $10 or so, in almost any cryptocurrency, were profitable.” Although the markets have been down for many months this year, they are gaining momentum and the government aims at making good revenue from the increasing popularity of crypto in the country.
However, Guliyev issued a warning that the markets were not subject to daily growth and various skills were required to make a prediction of which crypto might rise, and when. According to Guliyev, the most obvious way is to purchase Bitcoin and hold it until its value rises to make a profit. The expert opines that the method still works but cannot say for how long.
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Will Azerbaijan’s taxation of gains accrued from cryptos discourage people from investing in them? Let us know in the comments section.