Azerbaijan has become the latest country to tax cryptocurrency gains. According to Nijat Imanov, an official from the Taxes Ministry in charge of tax policy, revenue from cryptocurrencies are subject to taxation.
According to the official buying cryptocurrencies and selling them at a higher price attracts an income tax for individuals and a profit tax for legal entities.
“If someone bought a cryptocurrency and then sold it after its price increased, this amount is recorded as income and therefore should be attracted to taxation,” Trend news agency quoted Imanov as saying.
He was speaking at the second Finance and Investment Forum on May 5.
Like in many other countries globally, cryptocurrencies have attracted the attention of many in Azerbaijan with a considerable part of the population engaged in trading. The trend picked up significantly in the second half of 2017 as the market experienced dramatic gains.
With the growth of cryptocurrencies slowing down this year, buying and selling of cryptocurrencies has become a sensible way to make money easily compared to holding.
More Countries Introducing Cryptocurrency Taxation
A growing number of countries are now imposing taxes on cryptocurrencies.
Thailand introduced cryptocurrency taxation in April. Cryptocurrency trades are subject to a 7% value added tax and an additional 15% capital gains tax on specific investments.
US citizens are required to report taxable income from cryptocurrency transactions. However, only a few people are said to have made disclosures.
Up to now, the central bank had adopted a conservative view about cryptocurrencies. Chairman of the Central Bank of Azerbaijan has previously said the regulator does not consider cryptocurrencies as a form of payment.
The remarks were made in November during discussions on the budget.
“We think that cryptocurrencies continue to be a dangerous instrument for investing,” he added.
The CBA is, however, more positive about blockchain technology and has mulled over using it for identification and integrating it into payment systems.
Rustamov said the bank was studying the technology for potential use in the financial and public service sectors according to Azer News.
“For this, we have already started negotiations with leading consulting companies. I think that at the first stage, we must create stable technological and legislative infrastructure, and then start introducing this technology,,” he said as reported by Azerbaijan News.