Positive aspects of the tax declaration of digital assets

As everything that revolves around cryptocurrencies generates controversy, if there is an issue that makes them more interesting, it is the fact that they do not require a tax declaration as such since they are not regulated assets.

Although the perspective changes if cryptocurrencies are legal in the countries and must follow a tax scheme created solely and exclusively for them, because they are such new elements that affect family and business finances, and economies.

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Although there are many modalities of fiscal control, most countries still do not have a strict approach regarding the execution of monitoring concerning income from cryptographic operations.

Due to the anonymity of the operations carried out with digital currencies, which does not allow determining the identity of the people who operate, this complicates verifying the natural or legal persons subject to tax withholdings.

Tax regulations must adapt to digital assets.
Having cryptocurrencies in our assets does not imply that they must be declared to the country of residence's tax authorities when sold or exchanged.

The fiscal effect resides on all those profits or profits that people receive during a determined budgetary period, which becomes an obligation for citizens to declare said profits.

In the case of cryptocurrencies, exchanging or selling crypto assets may generate benefits. Still, if they are sold and the earnings are not as expected due to the volatility of these digital assets, they should not be subject to tax withholding.

For the countries where operations with cryptocurrencies are handled, fiscal transactions are still quite complex since these must be reflected mainly in the legal tender of each country.

Such is the case that if profits are received from the sale of a property and the operation was carried out with crypto assets, in the end, the transaction will be reflected before the corresponding entities at the rate equivalent to legal tender.

The situation for tax inspectors and customs agents is complex since they need help determining for sure what is the amount for which the tax calculation should be made.

Just as in the traditional economy, many people and even companies tend to evade tax obligations; unfortunately, cryptocurrencies can be considered a resource for what is the diversion of capital and thus reduce the tax declaration before the State.

The procedure is considered the most complex since there is no verifiable access to the operations other than an infinite number of functions that rest in the blockchain ledger.

Cryptocurrency Tax Declaration.
As we have said, only some countries apply the current tax regulations regarding declaring taxes for cryptographic income. Still, the countries that have created a legal foundation have determined the following instances in which they are assumed to be announced.

1 If profits or losses are generated in the sale, purchase, and exchange of crypto assets.

2 Interest earned from cryptocurrency trading operations is generated as if fixed-term income were developed in the case of stacking.

3 Any income exists for boobies, prizes, or another type of profit without directly carrying out the cryptographic operation.

4 When financial and economic operations are carried out through mining or digital trading currencies.

These specific cases should be subject to withholding and tax declaration.

The interest of the institutions in exercising control over the income and profits obtained from cryptographic operations is that the State does not accept that these sums of money, in many cases significant, do not reach their hands to distribute it in social benefits.

In addition, enrichment must be subject to fiscal supervision; remember that income from cryptocurrency transactions increased considerably more among young people after the pandemic.

Conclusion:
The tax issue requires the most evaluation since, in many cases, it is easier to verify operations of a cryptographic nature if there is a document that verifies and certifies digital financial operations.