Topic: *DJ UK HMRC: Corporation Tax, Capital Gains Tax to Apply To Bitcoins updated (Read 580 times)

Wire: DJ Global Markets (DGM) Date: Mar 3 2014  17:26:06
DJ UK Tax Authority Issues Guidelines on Taxation of Digital Currencies





 
   By Neelabh Chaturvedi
 
  LONDON--The U.K.'s tax authority Monday set out guidelines for the taxation
of crypto currencies such as bitcoin, allaying uncertainty over their treatment
for business and consumers.
  Her Majesty's Revenue and Customs said no value-added tax--a sort of national
sales tax--will be due on income received from the mining of crypto currencies
or income received by miners for the provision of other services in connection
with the verification of specific transactions.
  No VAT will be due on the value of bitcoins or other crypto currencies when
they are exchanged for sterling or other foreign currencies either. If VAT is
levied on a product, the tax must still be paid whether payment for the product
is made in pounds, bitcoin or anything else.
  "Taxpayers can rely on the VAT treatment outlined unless and until HMRC
announces any changes. Any changes will not apply retrospectively," the HMRC
said in a statement.
   Any profits made by companies and individuals from the appreciation of their
value of crypto currencies could still be liable for taxes.
  "Gains and losses incurred on bitcoin or other crypto currencies are
chargeable or allowable for Capital Gains Tax if they accrue to an individual
or, for Corporation Tax on chargeable gains if they accrue to a company," the
HMRC said.