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Sweden demands $90M in outstanding tax from crypto miners

The Swedish Tax Agency found several crypto firms provided misleading business descriptions to avoid paying taxes between 2020 and 2023.

Swedish crypto miners owe over $90 million in taxes after government investigations revealed four years of misappropriations.

The Swedish Tax Agency —Skatteverket — investigated the operations of 21 crypto-mining firms between 2020 and 2023. The investigation revealed that 18 crypto-mining firms filed “misleading or incomplete” information to benefit from tax incentives.

According to the agency, some crypto firms provided misleading business descriptions to avoid paying value-added tax (VAT) on taxable operations. Others found ways to avoid paying import taxes on mining equipment or income tax on mining revenue.

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Memecoin Collector Becomes Largest Holder of Solana-Based Altcoin Before Bitcoin Halving: Lookonchain

Ernst & Young taps ZK-proofs on Ethereum to automate contracts

EY said it chose Ethereum instead of a private network as it is cheaper, more confidential and prevents a party from gaining a “strategic advantage” over another.

Big Four accounting firm Ernst & Young has launched an Ethereum-based solution using zero-knowledge proofs aimed at helping its private business clients facilitate complex contracts.

Called the EY OpsChain Contract Manager (OCM), the solution will help private businesses execute complex business agreements in a timely, confidential and cost-effective manner, the firm explained in an April 17 statement.

Among the types of contracts that can leverage EY’s Ethereum-based solution are purchase agreements, standardized rate cards, volume discounts, rebates and strike prices.

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Memecoin Collector Becomes Largest Holder of Solana-Based Altcoin Before Bitcoin Halving: Lookonchain

IRS Targeting Bitcoin and Crypto Traders As Digital Currencies Become Top Priority For Agency: Report

IRS Targeting Bitcoin and Crypto Traders As Digital Currencies Become Top Priority For Agency: Report

The U.S. Internal Revenue Service (IRS) is gearing up for a new campaign to tackle the digital assets industry and the tax implications that come with it. To prepare for collecting crypto tax, the IRS recently hired industry veterans Sulolit “Raj” Mukherjee and Seth Wilks to serve as executive advisers for the agency. Mukherjee previously […]

The post IRS Targeting Bitcoin and Crypto Traders As Digital Currencies Become Top Priority For Agency: Report appeared first on The Daily Hodl.

Memecoin Collector Becomes Largest Holder of Solana-Based Altcoin Before Bitcoin Halving: Lookonchain

IRS tax bill will swipe creditors of any ‘meaningful recovery,’ says FTX

FTX Trading said the firm “never earned anything anywhere near the amount” that would justify a $24 billion tax bill.

A proposed $24 billion tax bill from the United State IRS will likely suck up any “meaningful recovery” that was meant for victims of FTX, according to the bankrupt crypto exchange. 

The United States tax authority has been trying to chase tax arrears from the crypto exchange and its sister firm Alameda Research since May this year. The IRS initially claimed $44 billion across 45 separate claims against FTX and its subsidiaries in May. 10, but recently brought that number down to $24 billion.

However, in a Dec. 10 filing to a Delaware-based bankruptcy court, FTX said the claims put forth by the Internal Revenue Service were “meritless” and would also impact the funds meant to reimburse impacted FTX users.

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Memecoin Collector Becomes Largest Holder of Solana-Based Altcoin Before Bitcoin Halving: Lookonchain

Crypto is the ‘largest growing’ asset class in Aussie DIY pensions

Australians are increasingly adding cryptocurrency to their “self-managed super funds” as a means to secure their retirement life, according to newly released data.

Australians are increasingly looking to cryptocurrency to secure a peachy retirement, with allocation to the asset class from self-managed retirement funds increasing 400% in just four years — with the growth rate surpassing stocks and bonds.

As of the quarter ending in September, the nearly 612,000 self-managed super funds (SMSFs) are holding a total of $658.6 million (992 million Australian dollars) worth of cryptocurrencies, statistics released on Nov.

The latest figure is a 400% increase from the same quarter in 2019 — which closed out at just under $131.5 million (198 million Australian dollars).

In Australia, self-managed super funds — also known as private superannuation funds — allow individuals to control how their retirement funds are invested.

Crypto tax provider Koinly’s head of tax Danny Talwar told Cointelegraph this makes crypto the “largest growing asset class in SMSFs.”

In comparison, listed shares — representing the largest allocation category for SMSFs at the end of the last quarter — grew 28% over the same time.

However, total SMSF allocations to crypto saw a slight 0.8% drop from the quarter ending June 2023 and a 2.4% drop compared to the previous year.

Crypto allocation amounts within all SMSFs per quarter since September 2019.

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Memecoin Collector Becomes Largest Holder of Solana-Based Altcoin Before Bitcoin Halving: Lookonchain

Australia’s tax agency won’t clarify its confusing, ‘aggressive’ crypto rules

The Australian Tax Office’s new rules on DeFi are unclear on whether capital gains taxes apply to liquid staking and transferring to layer 2 bridges.

Australia’s tax regulator has been unable to clarify confusing aspects of its new guidance that suggests capital gains tax (CGT) is payable on a slate of everyday decentralized finance transactions.

The ATO failed to answer direct questions from Cointelegraph on whether staking Ether on Lido or transferring funds via bridges to layer 2 networks are CGT events, leaving DeFi users in the dark about how to comply.

The Nov. 9 guidance from the Australian Taxation Office (ATO) says CGT is payable when transferring tokens to another address or smart contract that a person doesn’t have “beneficial ownership” over or if the address has a non-zero balance of the tokens.

Exchanging “one crypto asset for a right to receive an equivalent number of the same crypto asset in the future,” providing liquidity to a protocol, wrapping tokens and loaning assets are ATO examples of DeFi uses incurring a CGT event.

While the criteria suggests the rules may encompass liquid staking — such as staking Ether (ETH) on Lido — or sending tokens through a layer 2 bridge, this hasn’t been clarified.

An ATO spokesperson said in response to direct questions that the tax consequences of a transaction “will depend on the steps taken on the platform or contract, and the relevant surrounding facts and circumstances of the taxpayer who owns the cryptocurrency assets.”

The non-answer leaves investors unable to comply with possibly unintended consequences of the opaque new guidance, which has not yet been tested in court.

A CGT event would mean that if a DeFi user in Australia bought ETH for $100 and then staked it or sent it via a bridge to an L2 when the price is $1,000, they would need to pay tax on $900 “profit,” even though they haven’t sold the ETH or realized a profit.

Liberal Party Senator Andrew Bragg told Cointelegraph the former government had commissioned the Board of Taxation to propose appropriate rules for taxing cryptocurrency, but the findings have been delayed twice and will now not be released until February next year.

“In absence of legislation, the ATO has been allowed to make up the rules on their own,” Senator Bragg said.

He said the Labor government’s “laziness in not releasing these findings” has created complexity and uncertainty for Australian crypto users.

Koinly head of tax Danny Talwar said that in his opinion, a transfer via a bridge may result in a CGT event, but it largely hangs on whether a change in beneficial ownership occurred.

He added liquid staking would be a CGT event as the ATO views it as a crypto-to-crypto transaction, where Ether is swapped for another token.

Related: Study claims 99.5% of crypto investors did not pay taxes in 2022

Matt Walrath, the founder of Crypto Tax Made Easy, thinks the ATO doesn’t fully understand DeFi and called the new rules “aggressive.” He added they make staking and transferring funds to layer 2 blockchains much tougher for Australian DeFi users.

“Things are moving so fast within DeFi, I think they don’t have enough of an understanding about the nature of [what] these transactions actually are.”

Walrath contested beneficial ownership is transferred when users interact with liquid staking services, meaning no CGT event occurs. He said stakers can still withdraw funds at any time and the staked tokens technically don’t leave the user’s wallet.

“Although the bank might own my house when I mortgage it, I’m still the beneficial owner. I can rent that house out and derive the income from it. I’m the one who can enjoy it by living,” he sa.

Talwar suggested the new rules on wrapped tokens lack “economic substance.”

“Wrapped Bitcoin is economically similar to Bitcoin and therefore there is a question as to whether a CGT event has occurred.”

“We need more people in the Aus crypto community fighting for sensible tax laws,” Walrath stressed.

Magazine: Best and worst countries for crypto taxes – plus crypto tax tips

Additional reporting by Jesse Coghlan.

Memecoin Collector Becomes Largest Holder of Solana-Based Altcoin Before Bitcoin Halving: Lookonchain

Crypto staking rewards are taxable once received: IRS

The United States tax collector will require taxpayers to count staking rewards as gross income at the time they gain “dominion" over the tokens.

United States crypto investors must report crypto staking rewards as gross income in the year it was received, according to a new ruling from the country’s top tax authority.

On July 31, the Internal Revenue Service issued Revenue Ruling 2023-14, giving clarification about how income earned from staking digital assets should be treated for taxation purposes.

Excerpt from Rev. Rul. 2023-14. Source: IRS

Gross income includes income realized in any form, whether in money, property, services and now staking rewards.

The ruling applies to cash-method taxpayers who receive any crypto as remuneration for validating transactions on proof-of-stake blockchains and applies both when staking cryptocurrency directly and when staking through a centralized crypto exchange.

The ruling stated that the fair market value of the crypto rewards should be included in annual income and determined when the assets are received.

“The fair market value is determined as of the date and time the taxpayer gains dominion and control over the validation rewards."

“Dominion” was defined as the time when the investor controls and has the ability to sell, exchange, or otherwise dispose of the cryptocurrency rewards.

The IRS previously subjected crypto-mining rewards to both income and capital gains tax but had no provisions for staking rewards up until now, according to crypto tax firm Koinly.

Head of tax at Koinly, Danny Talwar, elaborated to Cointelegraph:

“The revenue ruling compounds the understanding of many accounting professionals in that staking rewards are only taxed as gross income when they are able to be sold. This means in that rewards accrued but locked won’t be taxable until the recipient can exercise ‘dominion and control’ over their staking rewards.”

Messari founder Ryan Selkis said the IRS is treating crypto staking like stock dividends.

Meanwhile, Jason Schwartz, tax partner and digital assets co-head at Fried Frank, said: “While the ruling is therefore unsurprising, it’s still disappointing,” adding:

“Tax law has always required the existence of a payer, such as an employer or other counterparty, for taxable income to accrue to someone. Even treasure trove discoveries are deferred payments.”

Related: Judge suggests IRS issued $4K refund over tax lawsuit based on quality of lawyers

The IRS tax bulletin comes at a time when U.S. federal regulators such as the Securities and Exchange Commission are targeting crypto-staking service providers and exchanges, alleging that they are offering illegal securities sales.

Magazine: Best and worst countries for crypto taxes – plus crypto tax tips

Memecoin Collector Becomes Largest Holder of Solana-Based Altcoin Before Bitcoin Halving: Lookonchain

Tax Authority Slated to Become Main Crypto Regulator in Russia

Tax Authority Slated to Become Main Crypto Regulator in RussiaRussia’s tax administration is going to be tasked with overseeing the crypto industry in the country, a high-ranking government official has indicated. According to the regulatory concept that’s currently under consideration, the revenue service will also serve as an entry point for market participants. Russians to Report Crypto Holdings and Transactions to Their Tax Service […]

Memecoin Collector Becomes Largest Holder of Solana-Based Altcoin Before Bitcoin Halving: Lookonchain

Russian Companies ‘Actively’ Using Crypto, Russia to Adopt 4 Relevant Laws, Official Says

Russian Companies ‘Actively’ Using Crypto, Russia to Adopt 4 Relevant Laws, Official SaysRussian lawmakers intend to soon approve four bills designed to regulate various aspects of cryptocurrencies, a high-ranking member of the Russian parliament announced. Meanwhile, Russian companies are already using digital assets in cross-border settlements, the official noted. Russian Legislature to Vote on Crypto Laws by End of July The State Duma, the lower house of […]

Memecoin Collector Becomes Largest Holder of Solana-Based Altcoin Before Bitcoin Halving: Lookonchain