Cryptocurrency investments have attracted the attention of tax authorities in Belgium. Several investigations have been opened into cases of Belgian citizens who have traded on foreign exchanges. Anyone speculating on crypto markets is expected to pay 33% tax on their gains, despite the fact that bitcoin and the like are not regulated or legalized in the country.
Also read: Germany Treads Lightly on Bitcoin Taxation
Three Cases Under Investigation
The Special Tax Inspectorate (STI) is currently studying at least three different cases of Belgian investments in cryptocurrencies. A fourth file was closed and treated as a “non-case”. According to local media, the investigations have started after Belgian officials were tipped off by colleagues from abroad.
Belgian tax authorities are now more closely interested in Belgians investing in cryptocurrencies, De Standaard and Het Nieuwsblad wrote. Anyone speculating on the cryptocurrency market must pay a 33% tax on gains, and declare these in the “other income” section on their tax return, STI said at the end of last year.
The new rules, however, have proved difficult to implement, as the Brussels Times reports. The management of cryptocurrency assets takes place on foreign trading platforms and Belgian authorities find it hard “to penetrate” there, the magazine says.
Despite the obstacles, the Special Tax Inspectorate intends to strengthen its checks within the crypto sphere. “It is a world in which Belgian tax authorities still have much to achieve”, says Francis Adyns from FPS Finance.
STI has started the investigations after receiving information from a foreign tax authority about the crypto dealings of several Belgian citizens. The inspectorate intends to approach the trading platforms directly to obtain more data about their transactions.
In December, the Belgian tax agency decided to withhold 33% of profits and incomes from speculative trading of bitcoin and other cryptocurrencies. The tax is imposed on private individuals trading cryptos with the intention of making profit from price fluctuations. When the crypto trading is conducted by a business, taxes may reach 50%.
Taxation Without Legalization
Earlier last year media reports suggested that Belgium could tighten its cryptocurrency regulations. Belgian officials made it clear they were in favor of strengthening government control over cryptocurrencies. The Minister of Justice Koen Geens said that they should be subject to stricter rules because of their growing popularity with cybercriminals and scammers. He also insisted that crypto companies should be obliged to cooperate with authorities.
“Crime prevention and regulations should evolve with new technologies”, Geens tweeted in 2017, calling for the adoption of new legislation. He proposed regulating all digital currency transactions. The minister received support from the country’s tax authority, which admitted the number of ordinary Belgians interested in cryptocurrencies was growing, too.
Currently, cryptocurrencies are neither legal, nor illegal in Belgium. Brussels has not announced a comprehensive policy yet, despite comments and warnings from some officials. Like many other EU countries, Belgium is expecting a common European policy. In December, the governor of the Belgian National Bank Jan Smets said bitcoin was not a currency but also added that it was not a threat to the monetary stability. Smets stated that the risk of investing in bitcoin was relatively low.
Do you believe tax authorities in Belgium will go after cryptocurrency users and investors before the country has adopted a comprehensive regulatory framework? Share your thoughts in the comments section below.
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