China’s tax agency asks gov’t to impose digital currency taxes
An official Chinese tax newspaper has called on the government to impose taxes on digital currencies, despite the recent show of hostility towards the industry by the government. The article, which was attributed to the state tax agency, further called for clarity regarding Bitcoin property declaration, liquidations, mergers and acquisitions, and more to avoid tax evasion.
China has been unequivocal in its hard stance against digital currencies. The country banned BTC years ago and has continued to reiterate this stand. It has banned ICOs, chased off exchanges, curbed banking access for players in the industry, and booted out miners over the past few years.
However, despite clearly not leaving any room for digital currencies, the China State Tax Administration believes that the government should define taxation policies for the sector.
China’s tax official newspaper called for a tax on crypto and said that the exchange’s taxation scale was very large. But since the PBOC defines all of crypto activities as illegal activities, taxation seems to indirectly recognize their legalization. https://t.co/SZCX5KuiB7
— Wu Blockchain (@WuBlockchain) October 20, 2021
In an article on China Tax News, the administration’s Loudi Taxation Bureau called on the government to go even further and legally define other related activities.
“At the same time, China should improve the relevant property declaration and registration mechanism and carry out real-name registration and dynamic tracking of users who hold a large amount of virtual currency,” the bureau stated.
The bureau also wants the government to define policies related to reorganizations, fines and confiscations, liquidation, bankruptcy, mergers and acquisitions, and more “to clarify the handling of virtual currencies to avoid the loss of national taxes.”
The article was attributed to the bureau in general and didn’t single out the specific author. It represents one of the very few calls for taxation in an industry that’s being suppressed by the government spiritedly. While the government has claimed that the clampdown is to protect investors, many have said that Xi Jinping’s administration is anti-Bitcoin as it represents the ultimate freedom in a state governed by a communist regime.
The call for taxation also comes at a time when the HM Revenue and Customs, the U.K.’s tax agency, has sent letters to digital currency investors warning them to check if they have paid taxes. According to tax experts, the letters serve as a reminder to investors to get their taxes in order and are not meant as a threat of enforcement.
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Author: Steve Kaaru