The US Senate plans to raise part of the $550 billion necessary for investing into the transport and power infrastructure from posing taxes on cryptocurrency holders.
Bloomberg has reported that the U.S. Senate intends to tighten crypto taxation on investors and traders in order to raise $28 billion from that industry in taxes.
This would be part of the $550 billion necessary to fund the transportation and power systems across the country.
— Bloomberg Crypto (@crypto) July 29, 2021
Planning to rake in $28 billion in crypto taxes
The Senate proposal suggests that the IRS must now tax crypto transactions, collecting data from crypto brokers. Businesses would have to report transfers of digital currencies that exceed $10,000.
The bipartisan plan is set to invest $550 billion in the U.S. transportation network, broadband and utilities. The final target has been reduced from the $579 billion proposed last week.
Simultaneously, the Senate is voting for a $3.5 trillion stimulus for social programs in the U.S.
Crypto becomes an area for tax cheats
According to IRS officials, the crypto industry is largely turning into a shelter for those who are hiding their taxes from the federal government.
In an attempt to increase control over crypto transactions, last year the IRS introduced an addition to Form 1040, as well as to the individual tax return.
Executives in the crypto sphere refuse to agree to this proposal, saying that some companies would simply be unable to collect the data required by the IRS.
Senator Elizabeth Warren also mentioned that she wants to impose a wealth tax, including on people who made their fortunes on crypto. She said that it does not matter to her what assets the wealth to be taxed is tied to.
South Korean Taxman to Be Granted Right to Search Crypto Tax Evaders’ Homes
Things are going from bad to worse for South Korean crypto investors. Fresh from seeing their crypto exchange options shrivel to just four, heavily audited platforms on Friday, they are now being told that if they seek to sidestep crypto trading profits reporting protocols, their coins could be liquidated – and bailiffs could be sent to search their houses.
Crypto is not yet taxable in South Korea, but as of January 1, 2022, all crypto profits above USD 2,100 will need to be declared, and traders will be forced to pay a flat rate of 20% on their earnings above this threshold.
In addition, local branches of the National Tax Service (NTS) have been executing a countrywide crackdown on individuals they suspect of making crypto buys in order to avoid declaring income. This initiative has seen millions of USD worth of tokens seized and in many instances liquidated by the NTS, which demands not only overdue tax bills, but also fines in some instances.
But, Maeil Kyungjae reported, the Ministry of Strategy and Finance confirmed that the government “recently submitted an amendment to the National Tax Collection Act” to the National Assembly.
The latter is almost certain to green-light the proposal, which will be bundled with other legal amendments and hurried through parliament in the coming weeks.
Once legally binding, this will give the NTS sweeping new powers “to collect tax on cryptocurrencies such as bitcoin (BTC),” the media outlet noted.
Currently, tax officers only have the power to confiscate cryptoassets from tax “dodgers” by freezing and seizing coins on exchanges. But, the ministry confirmed, the new powers will allow tax officers to search homes and other premises if the need arises.
The measure will also grant officers the right to convert crypto funds to fiat KRW wherever they find them. This means that officers could decide to liquidate (and then confiscate) customer funds on any given exchange providing they feel they have enough proof that the customer in question has been evading taxes.
In Ukraine, meanwhile, MPs could be set to mull draft crypto tax proposals that would see individuals taxed at a rate of 6.5% on crypto trading profits, and companies taxed at a slightly lower rate of 5%.
Mikhail Chobanian, the founder of the crypto exchange Kuna, wrote on Telegram that lawmakers have “received proposed amendments to the tax code, and opined that the idea was “cool, clear, simple and sane.”
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