News about cryptocurrencies constantly appears in all media, even those that are not related to information technology and the economy. In 2021, everyone wants to invest in crypto – from students to owners of international corporations. Therefore, it is not surprising that states are rushing to develop new regulatory laws. A common understanding of how to relate to virtual currency has not yet been formed. In this article, we will analyze what are the rules regarding cryptocurrency in Georgia and other countries.
How governments around the world treat cryptocurrency
Most countries do not explicitly prohibit any transactions with electronic money, but they do not give permission for legalization either. Maintain a neutral and cautious stance. But fortunately, there are examples of a progressive attitude, when the government of the country comes to the conclusion that it is better to normalize and legalize digital business, thereby bringing it out of the shadow sector. This benefits both the development of the crypto industry and the state itself due to additional budget revenues.
So far, unfortunately, there are not many such states: Estonia, Japan, Malta, Belarus, Georgia, Germany, Slovenia, Switzerland, Singapore, Gibraltar, Bermuda. Let’s talk more about some of this list.
In Estonia, in order to obtain a license to operate with cryptocurrency, you need to open a company and apply for a special branch of Financial Supervision. It usually takes one month to review. To do this, be sure to prepare the following package of documents:
- certificate of incorporation;
- KYC documentation;
- risk assessment documents.
With this license, your company will be able to:
- Exchange cryptocurrency for real money;
- Be a bank and keep the clients’ cryptocurrency;
- Make transactions between different e-wallets.
In Estonia, it is legal to use cryptocurrencies as a means of payment or exchange, while the status of a real currency has not yet been fixed.
General rules and regulations apply to the taxation of cryptocurrencies:
- When calculating value added tax, cryptocurrencies are considered equal to euros;
- At the time of income tax payment, cryptocurrencies are equated to property;
- Any income from the exchange and sale of cryptocurrencies is commercial and taxable.
In Japan, in order to obtain a license to operate with cryptocurrency, you need to open a company with a registered capital of $ 90,000 or more. There are requirements for directors – at least one must be a resident of Japan. The service itself will cost you $ 30,000. To register, be sure to prepare the following package of documents:
- Business plan;
- Passports of directors and beneficiaries;
- AML policy.
Bitcoin was recognized as real money back in 2017, so the consumption tax was lifted. The obligation to pay taxes arises only during the sale of cryptocurrency or the purchase of goods or services.
In Malta, in order to obtain a license to operate with cryptocurrency, you need to open a company and apply to a special branch of the MDIA (Malta Digital Innovation Authority), which deals with all regulation of issues with digital currency.
There is no law on the taxation of cryptocurrencies in the country, but there are general tax liabilities:
- Corporate tax – 35%;
- For non-residents of personal income tax (if money is not transferred to local banks, when 15% is transferred) – 0%;
- Income tax on capital gains (income on stock markets also falls under this concept) – 0%.
The Government of Malta is extremely positive about cryptocurrency and aims to become a hub for financial and IT companies.
In Belarus, in order to obtain a license to operate with cryptocurrency, you need to open a company. The minimum authorized capital is from $ 800,000, but for ICO operators from $ 200,000.
The country’s National Bank recognized cryptocurrencies as real money, but commercial transactions with tokens are exempt from VAT and income tax until 2022. Mining until 2023 is not subject to taxation. Otherwise, taxation is in line with the general rules.
The rules regarding cryptocurrency in Georgia are regulated by only one piece of legislation. But at the same time, Georgia is among the leading countries in the world for the extraction of cryptocurrency. In 2020, Georgia took 3rd place, behind only China and Venezuela. Affordable electricity prices and loyal tax policy attract entrepreneurs from all over the world to Georgia for crypto mining.
Back in 2019, the Ministry of Finance published a public decision on taxes applicable to cryptocurrencies in Georgia. According to the decree:
- individuals in Georgia are exempt from income tax on any profit that was received from the sale of cryptocurrencies;
- the sale of cryptocurrency (exchange it for Georgian or other national currency) is not subject to VAT (applicable for both legal entities and individuals);
- the sale of computing (hash power) from Georgia abroad is also not subject to VAT. In addition, the right to reimburse the input VAT on such transactions is retained (applies as for legal entities);
- the sale of computing (hash power) on the territory of Georgia (from a resident of Georgia to a resident of Georgia) is a transaction subject to VAT.