The Ministry of Finance is focusing on the taxation of the capital gain resulting from the sale of cryptocurrencies at a rate of 15%, after first clarifying the landscape regarding which procedure will be followed in order for these modern but also with many questionable financial products to be accepted by the Tax Office as until are currently considered “invisible”.
The news that the “king” of cryptocurrencies, Bitcoin, reached an all-time high of $69,000 within the week shows that this new way of investing is here and growing, and decisions are expected soon to be made on the control and taxation of cryptocurrencies through of the special 15-member working group that was recently established and will start meeting immediately for this purpose. In fact, in addition to tax officials of the Independent Public Revenue Authority, legal and tax advisers to the Hellenic Banking Association and the Bank of Greece as well as officials of the Authority for the Legalization of Proceeds from Criminal Activities participate in this group.
Huge profits
There are not a few cases where holders of cryptocurrencies who had acquired them at very low prices and now liquidate them making huge profits, while asking to be taxed on the resulting capital gain so that they can then use this money to buy a property or other assets, the Tax Office officially answers them that these amounts can neither be declared nor recognized and by extension neither can they be taxed with a favorable regime (e.g. capital gains regime). Capital gain means the difference between the acquisition price paid by the taxpayer and the sale price received.
On the other hand, if someone buys a property with profits from crypto-currencies and does not cover the “pothen esches” with declared incomes from earlier years, the Tax Office can impose income tax on him with the highest tax rate of up to 42% as well as fines and surcharges as he deems that it is income that the citizen hid from the authorities, i.e. it is the product of tax evasion.
Another issue that arises and must be answered by the competent committee established at the Ministry of Finance is the fact that if cryptocurrencies are recognized as investment products, their owner should be able to justify the amounts paid for their acquisition because they are presumptive.
Detailed situations
A thorn is the fact that taxpayers will have to keep detailed statements accompanied by the supporting documents of the digital platform where the purchases and sales took place and be able to prove how these amounts arise as in most cases these platforms are not recognized.
A typical example of a student who, from his involvement in the cryptocurrency market, obtained profits-capital gains of approximately 300,000 euros in one two years. The individual, in his attempt to acquire his own property, addressed the Tax Office in order to be informed about the steps he must follow and what regime applies in his case. The tax office forwarded the question to the central administration of the Ministry of Finance and the answer was negative in the sense that it cannot make use of these amounts because so far no decision has been made to handle such cases. This issue does not concern only Greece but the countries of the European Union as a whole, while in the USA the landscape has been clarified regarding how incomes resulting from the purchase and sale of cryptocurrencies are taxed.
The Independent Public Revenue Authority has already started contacts with tax administrations of other states in order to draw expertise and solutions to the major problem that has arisen from the spread of cryptocurrencies and the tax evasion phenomena that are spreading.
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