Cryptocurrency taxation: are you doing it right?
The tax administration has detected irregularities in the tax returns of a number of taxpayers. The major irregularities were mainly related to the taxation of cryptocurrency income. Auditors will therefore focus on this area again. Will this affect you?
Hundreds of millions of dollars of data don't add up
A few days ago, the General Financial Directorate (GFD) issued a press release according to which the tax administration has launched a targeted audit action aimed at the taxation of cryptocurrencies and in particular the revenues derived from them.
The entire action is based on an analysis of data for 2019 and 2020 and for a selected group of taxpayers. Based on the evaluation of the information obtained, the GFD identified taxpayers who did not declare the income and did not pay income tax on it. The total difference between the identified and reported data amounted to hundreds of millions of crowns.
The tax administration first chose a milder instrument in the form of an appeal. In other cases, tax was levied (on about 80% of the audited entities) and a number of other entities suspected of not declaring income from cryptocurrencies (e.g. in connection with collective investment) were identified.
The future will bring further controls
The GFD notes that it will continue to monitor the taxation of cryptocurrencies. This is based, among other things, on the mandatory exchange of information, both nationally and internationally. The tax administration will now focus on cryptocurrency exchanges, cryptocurrency miners and cryptocurrency-related service providers.
If you want to make sure that you have taxed your cryptocurrency income properly, do not hesitate to contact our specialists.