Reports indicate India’s tax authority is considering a plan to impose an 18% Goods and Services Tax on cryptocurrency trading. Additionally, the Central Board of Indirect Taxes and Customs is proposing to have digital currencies classified as commodities. This would be as opposed to securities or currencies. While this would remove uncertainty surrounding digital assets categorization, other laws would accompany digital currency use in illegal activities.
In India, digital currencies haven’t been formally legalized or banned, though the risks that come with the digital assets have been highlighted by the government on multiple occasions. Last month, the Reserve Bank of India issued an order preventing commercial banks from dealing with organizations which trade in digital currencies. However, cryptocurrency exchanges have gone to court to protest the move by the central bank. Among the presented proposals, a retroactive application of the Goods and Services Tax could begin July 1st, 2017. The date coincides with the beginning of the indirect tax regime.
Tax on crypto mining
Regarding the mining of digital currencies, the proposal suggests viewing digital currency production as a service. Additionally, the miner’s levy should be based on coins mined, or generated transaction fees. The proposal further suggests taxing wallet services providers under the Goods and Services Tax. This means that they will have to register.
Also required to register under the Goods and Services Tax are digital currency exchanges. They will pay levies based on the commissions that they earn from their activities. This will include foreign cryptocurrency exchanges when they provide a service to Indian nationals and residents.
Temporary suspension of cryptocurrency taxes in Poland
This comes after the Polish finance ministry temporarily lifted the levies imposed on the trading of digital currencies. According to Poland’s Ministry of Finance, the temporary tax suspension will allow time for an in-depth analysis. The analysis will lead to creating more workable and applicable regulations. Before the tax suspension, the country’s digital currency traders were required to pay taxes under two brackets of 18% and 32%, regardless of whether a profit was made. Additionally, each individual trade carried a 1% levy due to a property transfer classification.