In today’s crypto news, the government of Bulgaria is starting to investigate crypto exchanges to demand taxes from the profits that investors generated from trading digital assets such as Bitcoin and other altcoins. The National Revenue Agency (NRA) of Bulgaria has categorized cryptocurrencies as financial assets which incur a 10% tax on profit that individuals have to disclose on an annual basis.
The main problem, however, with NRA’s regulation of cryptocurrencies using the same policies is that it does not take into account the volatility of the emerging class. Meanwhile, cryptocurrencies are still in their infancy stage and the dominant digital assets such as Bitcoin and Ethereum still demonstrate daily moves from 5% to 15%.
Obviously, if an investor in Bulgaria is required to declare his profits on taxes on an annual basis, the decreasing price of Bitcoin could turn in a large negative return for the investor.
Bulgarian authorities are now considering crypto assets to be anonymous and have already said that by doing that, it will be easy for investors to evade taxes in the crypto market. With the Know Your Customer (KYC) and Anti-Money Laundering (AML) systems integrated by all the local exchanges, however, it will be difficult to hide or confine any transactions from the authorities.
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