Bitcoin is gradually getting rid of income tax worldwide and becoming part of capital reserves
After the value of bitcoin began to rise again and returned last week above the level of 100 thousand dollars, it is likely that this most famous world cryptocurrency will celebrate another success - in one of the states of the USA, it is leaning towards the fact that it will soon be burdened with zero tax. Some others are also considering including it in their banking reserves. By the way, Aleš Michl, the governor of our central bank, recently speculated about this as well.
The American state of Missouri wants to exempt profits from cryptocurrencies like bitcoin from state income tax. Missouri would thus become the first state in the US to completely relieve such profits from the burden of state income tax. However, the provision will only start to apply for companies when the highest state income tax rate drops to 4.5 percent. That is not expected until at least five years from now.
According to supporters of the law, the stated move should stimulate local investment and economic growth. Opponents, on the other hand, warn that it could lead to a notable drop in state budget revenues, as much as 430 million dollars per year, which translates to more than 9.5 billion crowns!
The interest in bitcoins is related to their gradually increasing value. Last year, for the first time in history, this cryptocurrency rose above the price of one hundred thousand dollars, which brought substantial profit to many owners. But that also means putting them on your tax return and paying tax from them. If Missouri Governor Mike Kehoe signs the bill, this will no longer be necessary in the coming years.
But Missouri is definitely not alone in thinking about the future with bitcoin. Another state is New Hampshire, which accepted this cryptocurrency as a reserve asset in early May. Czech National Bank Governor Aleš Michl also considered a similar move this year when, in an interview for the Financial Times, he indicated that bitcoin would constitute up to 5 percent of all the central bank's reserves.
Domestic situation
The Czech Republic could be the next country where bitcoin owners can be freer. Domestic cryptocurrency owners are expecting that they could potentially tax their profits from them in the same way as those from stocks. At least that's what the bill on introducing a so-called time and value test for bitcoin, which is supposed to come into effect this year, assumes. The proposal has already passed successfully through the House and Senate and was signed by President Petr Pavel in February.
Currently, the difference between the purchase and sale price of cryptocurrency is taxed by 15 or 23 percent in our country. In addition, profits from the exchange of one cryptocurrency for another or exchange for goods are also taxed. It is the same in the case of using payment cards, which can be loaded with virtual currency and then practically pay everywhere, where a regular payment terminal works. In the tax return, cryptocurrency revenues are entered in the "Other income" column.
The only option not to pay income tax at all in our country at the moment is only to buy and hold cryptocurrencies. Our tax laws currently do not provide any other option.
Open World
There are many countries that are gradually becoming more accommodating towards cryptocurrencies. For instance, in neighboring Germany, there is no income tax if you hold a particular cryptocurrency for at least one year. In Portugal, income tax was also not charged until 2023, but currently there is a regulation similar to that in Germany. In Singapore, the sale of crypto is tax-exempt without any conditions. The same is true in Malta, Switzerland, Cyprus, Greece, Slovenia, Estonia, or Belarus.
The very first country to classify bitcoin as legal tender was already Salvador in 2021. The country also subsequently developed and introduced the Chivo crypto wallet to enhance the acceptance of bitcoins and began buying assets as an investment.
Trump is for cryptocurrencies
The opportunities for promoting cryptocurrencies will likely increase more and more. Bitcoin significantly strengthened after Donald Trump's November victory in the US presidential elections. Trump promised in his campaign that he would create strategic reserves of bitcoin and support its domestic mining in such a way to make the United States a global center for this technology. However, the value of the cryptocurrency later fell significantly, in part due to concerns about Trump's tariff policy.
"Now, as the United States seem to be more reasoned and are making deals with other countries, cryptocurrencies are once again on the rise,"
said analyst Stéphane Ifrah from Coinhouse company, quoted by the Ceskenoviny.cz portal. The expert also added that there is clearly a renewed interest of investors in riskier assets.
Sources: author's text, Ceskenoviny.cz, E15, Investujeme.cz, Binance Square
