US and UK want to mitigate cryptocurrency taxation

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US and UK want to mitigate cryptocurrency taxation
US and UK want to mitigate cryptocurrency taxation

Recently, Japan has softened its tax laws regarding cryptocurrency trading and business. There are reports that the United States and the United Kingdom, where high taxes are applied to cryptocurrencies, may follow the example of Japan.

Aspiring to the mainstream, blockchain and cryptocurrency firms continue to resist outdated legislation.

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Realizing this, the three largest economies in the world – the United Kingdom, the United States and Japan – are taking steps to regulate cryptocurrencies and wisely manage the generated taxes.

Changes in Japanese law classify profits from mining or trade as “other income”, which will be taxed at about 55% for high-yield companies. Financial regulators in Japan have introduced a legal framework for determining how to use cryptocurrency assets (nevertheless, some simplified approaches to determining certain functions of specific cryptocurrencies still remain in Japan’s tax policy).

In the United States, the Standing Budget Committee of the House of Representatives appealed to the Internal Revenue Service (IRS) with a request to determine the conditions for taxation of cryptocurrencies. The committee is committed to ensuring that laws governing the use of cryptocurrencies are standardized and simplified.

Finally, the UK government also demanded clarification on taxes on cryptocurrency assets. Responsibility for solving this problem was assigned to a working group on cryptocurrency assets, consisting of officials from the Financial Supervision Authority (FCA), the Treasury and the Bank of England. After examining the potential threats and benefits for the country’s economic and financial sector, the group published a report that presented its position on the blockchain and digital assets.

Now on the agenda of the legislators of these leading economies is the question of how to make things clearer and simpler for the long term, as well as soften the tax regime for cryptocurrencies.