No Tax On Crypto Mining In Kazakhstan Soon To Be In Action: Report

The lawmakers in the country of Kazakhstan have recently decided that no tax on crypto mining will be needed as long as the mined crypto is exchanged for fiat money. The decision has gone viral in the cryptocurrency news today and opened a lot of gates for acceptance of similar initiatives by other countries in the near future.

According to one legislative analyst at a local blockchain association, crypto mining won’t be treated as an entrepreneurial activity – instead, it will be seen as a “purely technological progress” the reports from the local business publication Kursiv showed on December 4.

The report about no tax on crypto mining in the country was written by Madi Saken who is a legislative analyst at the National Association for the Development of the Blockchain and the Industry of Data Centers of the Republic of Kazakhstan (NABDC). He announced the news in a local blockchain event called “Blockchain Day” on December 4. The Bitcoin news were later on been confirmed by Saken.

As the report outlines, no tax on crypto mining is what the main law on crypto taxation is. The bill is currently under consideration with the presidential administration but will reportedly be sent to the Mazhilis which is the lower house of the bicameral Parliament of Kazakhstan, in December 2019.

Specifically, this proposed law shows that the legal status of crypto mining will be officially established, along with rules for its taxation. As Saken confirmed, digital assets and cryptos won’t be considered as subject to taxation because tax liabilities only apply to income made in “real money.” As such, the taxes will only be applicable when cryptocurrency is exchanged for fiat money.

“Tax liabilities only emerge when there is an income in the form of real money, particularly when a cryptocurrency is exchanged for real money, which means it is sold on an exchange. Then, this income in the form of classic money will be subject to taxation,” Saken said.

But even despite the no tax on crypto mining, the process will be still deemed as entrepreneurial activity when entities offer services to use their hardware. Mining farms would also be taxed by analogy with typical data centers, the report notes.