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Taxation of income obtained from cryptocurrency transactions
Taxation of income obtained from cryptocurrency transactions
Individuals who earn income from cryptocurrency transactions are required to register with the tax authorities, obtain a Tax Identification Number (TIN), and calculate personal income tax at a rate of 14 percent in accordance with Article 101.2 of the Tax Code on the income earned. The “Personal Income Tax Return” for the calculated tax must be submitted to the tax authority no later than March 31 of the year following the reporting year, and the corresponding amount must be paid to the state budget.
According to Article 99.3.8 of the Tax Code, other income that reflects an increase in the initial value of a taxpayer’s assets and is not considered salary is regarded as income derived from non-entrepreneurial activities. Income generated as a result of cryptocurrency purchase and sale transactions also falls within this category.
At the same time, pursuant to Article 155.1 of the Tax Code, only income derived from entrepreneurial activities is subject to Value Added Tax (VAT). Therefore, even if the volume of cryptocurrency transactions carried out by individuals in any month (or months) within a consecutive 12-month period exceeds 200,000 manats, they are not obliged to register for VAT purposes or submit a relevant application. Consequently, income obtained by individuals from cryptocurrency transactions is not considered a taxable object for VAT purposes.
Individuals who earn income from cryptocurrency transactions are required to register with the tax authorities, obtain a Tax Identification Number (TIN), and calculate personal income tax at a rate of 14 percent in accordance with Article 101.2 of the Tax Code on the income earned. The “Personal Income Tax Return” for the calculated tax must be submitted to the tax authority no later than March 31 of the year following the reporting year, and the corresponding amount must be paid to the state budget.
According to Article 99.3.8 of the Tax Code, other income that reflects an increase in the initial value of a taxpayer’s assets and is not considered salary is regarded as income derived from non-entrepreneurial activities. Income generated as a result of cryptocurrency purchase and sale transactions also falls within this category.
At the same time, pursuant to Article 155.1 of the Tax Code, only income derived from entrepreneurial activities is subject to Value Added Tax (VAT). Therefore, even if the volume of cryptocurrency transactions carried out by individuals in any month (or months) within a consecutive 12-month period exceeds 200,000 manats, they are not obliged to register for VAT purposes or submit a relevant application. Consequently, income obtained by individuals from cryptocurrency transactions is not considered a taxable object for VAT purposes.