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Is Cryptocurrency Income Subject to a 14% Tax? – Official Statement
The tax obligations of individuals earning income from cryptocurrency transactions have been clarified. Accordingly, individuals who generate income from buying and selling cryptocurrencies must register with the tax authorities, obtain a Tax Identification Number (TIN), and pay income tax at a rate of 14% on their income.
AZE Finance reports that this was stated in the response to an inquiry addressed to the State Tax Service.
The clarification notes that, under Article 99.3.8 of the Tax Code, other income indicating an increase in the initial value of a taxpayer's assets (excluding wages) is considered income derived from non-business activities.
Accordingly, individuals earning income from cryptocurrency transactions must calculate income tax at a rate of 14% in accordance with Article 101.2 of the Tax Code. Taxpayers are required to submit an income tax return to the tax authorities no later than March 31 of the following year and pay the calculated tax to the state budget.
What amount is the tax calculated on?
Taxable income is determined based on the positive difference between the value of the cryptocurrency on the date of acquisition and its value on the date of disposal. In other words, tax is calculated on the increase in the cryptocurrency's value, rather than on the entire sale proceeds.
The income is considered to have been received on the date the acquired cryptocurrency is disposed of.
Which accounts must be used for transactions?
The State Tax Service stated that non-cash payment transactions related to the purchase and sale of cryptocurrency must be conducted through bank accounts opened in accordance with Article 35 of the Tax Code.
How are social and health insurance contributions regulated?
According to the clarification, under paragraph 12 of Article 15 of the Law on Social Insurance, income that is not related to employment or business activities is not subject to mandatory state social insurance contributions.
Furthermore, under Article 15-2.2.2 of the Law on Medical Insurance, individuals earning non-business income from cryptocurrency transactions are not required to pay mandatory health insurance contributions on such income.
Thus, the main tax obligations of individuals earning income from cryptocurrency transactions are to obtain a TIN, calculate income tax at a rate of 14%, and submit the relevant tax return within the deadline established by law.
The tax obligations of individuals earning income from cryptocurrency transactions have been clarified. Accordingly, individuals who generate income from buying and selling cryptocurrencies must register with the tax authorities, obtain a Tax Identification Number (TIN), and pay income tax at a rate of 14% on their income.
AZE Finance reports that this was stated in the response to an inquiry addressed to the State Tax Service.
The clarification notes that, under Article 99.3.8 of the Tax Code, other income indicating an increase in the initial value of a taxpayer's assets (excluding wages) is considered income derived from non-business activities.
Accordingly, individuals earning income from cryptocurrency transactions must calculate income tax at a rate of 14% in accordance with Article 101.2 of the Tax Code. Taxpayers are required to submit an income tax return to the tax authorities no later than March 31 of the following year and pay the calculated tax to the state budget.
What amount is the tax calculated on?
Taxable income is determined based on the positive difference between the value of the cryptocurrency on the date of acquisition and its value on the date of disposal. In other words, tax is calculated on the increase in the cryptocurrency's value, rather than on the entire sale proceeds.
The income is considered to have been received on the date the acquired cryptocurrency is disposed of.
Which accounts must be used for transactions?
The State Tax Service stated that non-cash payment transactions related to the purchase and sale of cryptocurrency must be conducted through bank accounts opened in accordance with Article 35 of the Tax Code.
How are social and health insurance contributions regulated?
According to the clarification, under paragraph 12 of Article 15 of the Law on Social Insurance, income that is not related to employment or business activities is not subject to mandatory state social insurance contributions.
Furthermore, under Article 15-2.2.2 of the Law on Medical Insurance, individuals earning non-business income from cryptocurrency transactions are not required to pay mandatory health insurance contributions on such income.
Thus, the main tax obligations of individuals earning income from cryptocurrency transactions are to obtain a TIN, calculate income tax at a rate of 14%, and submit the relevant tax return within the deadline established by law.