The UK tax agency has released tax guidelines for corporate cryptocurrency, following a promise made a year ago.
After clarifying last year's situation for individual taxpayers, the UK's Tax Administration (HMRC) released business guidelines for cryptographic asset swap tokens – such as bitcoin – on Friday. it taxonomically separates utility tokens and security tokens. Indications on the last two categories are forthcoming, the regulator said.
According to the latest guidelines, cryptographic assets continue to be defined as commodities, not money or currencies.
Companies that trade tokens, including the sale of goods or services for crypto or mining, are liable to pay taxes. The type of tax paid – capital gains tax, corporation tax, income tax, national insurance contributions, stamp tax or VAT – is the discrimination of the authority.
Most mining activities constitute a taxable event as a form of commerce. If the extracted coins are not exchanged, they are considered as various receipts that bear their own tax burden.
The HMRC claims that home-based mining is not a taxable event, though.
"Using a computer at home while it has enough capacity to extract tokens would not normally be an exchange … extracting tokens to get an expected net profit would probably be a trading activity. . "
Investments and salaries
Corporate assets are considered taxable events, generating both a capital gains tax and a corporate tax. As for guiding cryptographic assets for individuals, similar trading tokens can be pooled for ease of calculation.
"If a person has bitcoins, ether and litecoins, they will have three pools and each one will have their own" pooled eligible cost "associated with it. These pooled eligible costs change as more tokens of this type are acquired and eliminated. "
Tips for forks and drips are also provided, although there does not seem to be any change from the individual tips issued in 2018.
In addition, employees may be paid in cryptographic assets under the new tax laws, regardless of the authorities' failure to recognize these assets as currency. However, employers can not use cryptographic assets for pension funds because HMRC does not consider cryptographic assets as money or currency, but as a commodity.
Given the fast pace and dynamism of the cryptography market, a new interpretation is possible.
"HMRC's perspective can change as the industry grows," says the guide.
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