Tax The Bitcoin?

Tax the bitcoin?

Do you need a bitcoin tax regulation? The professor of Economics and Finance at the UPF Barcelona School of Management, Luz Parrondo, analyzed the positioning of 17 countries on the cryptocurrency, considered in most cases an intangible asset.

"There is a wide variety of possibilities of using these digital currencies that we could talk about long and hard, if we only circumscribe those that are used as a means of payment like Bitcoin, the problem they are having is that they now have a very large speculative value that makes it difficult to treat both accounting and tax, "says the teacher who has analyzed the limited legislation through binding consultations reaching the conclusion that in no country is recognized as legal tender.

"At the time of accounting it can not be considered money or equivalent to money. How should it be counted then? First, it must be differentiated if it is an investment, a payment or a means of payment. In the first and last case there is a great international consensus when considering the cryptocurrency as an intangible asset. As such, at the time that this asset is exchanged for another when making the purchase or sale of a product or service, we are facing a commercial exchange, "he says.

"Every time a swap is made, it looks at comparing the value of the cryptocurrency when it is acquired, with the value at the time of being used as a means of payment and the loss or associated capital gain is recorded. It will be this loss or this gain that will be taxed in the income tax or in the corporate tax, as appropriate, "says Professor Parrondo.

"They will be subject to tax on these two taxes, the profits derived from investing in cryptocurrencies, and the Personal Income Tax the payments received in cryptocurrency," he adds.

Although there is no specific legislation, taking into account the binding consultation made to the Spanish Tax Agency, it points out that the purchase of cryptocurrencies is subject to, but exempt from, the Value Added Tax (VAT). "This, however, does not exempt the payment of VAT associated with the sale of goods and services using cryptocurrency as a means of payment. For example, if we buy Bitcoin, we do not pay VAT, but if we buy one with Bitcoin, we will pay VAT on the car, "he explains. The teacher of the UPF Barcelona School of Management, recalls that blockchain technology allows what until now only an intermediary could get, verifying that a transaction is legitimate. "The transactions to be included in the decentralized database or blockchain, is verified through algorithms that decode the so-called 'miners'. They are people who are on their computer breaking the code, breaking the algorithm until they find a way to verify and validate that it is correct. The process is called mining and these workers are paid back with the blockchain's native currency that are validated, for example within the bitcoin blockchain they are paid with bitcoins, within Ethereum, they are paid with ethers, "he says. Luz Parrondo points out that apart from using it as a means of payment, cryptocurrencies go much further. Ecosystems are being created between companies that create their own blockchain platform, or use a public one like Ethereum, generating their own currencies or 'appcoins' to be able to exchange and monetize, for example, property rights, consulting services, artistic creations or even medical records. He has analyzed what happens in 17 countries with cryptocurrencies. It has compared its attitude (favorable, doubtful or prohibitive) with respect to cryptocurrencies, if they consider them legal tender or even if they have decided to outlaw them and if the country has pronounced itself officially or unofficially. Your report reflects the favorable attitude of the US