A high ranking official from the Azerbaijan Tax Ministry declared that cryptocurrency transaction gains are going to be taxed in the country. The authorities want to tap into both personal incomes and corporate profits. In the past we saw a highly conservative stance when referring to cryptocurrencies but now Baku wants to put a focus on proper taxation.
Azerbaijan To Tax Private And Corporate Incomes
According to Tax Policy and Strategic Studies deputy director Nidjat Imanov, crypto transaction revenues will be taxed in Azerbaijan. He declared:
“Incomes from operations with cryptocurrencies will be taxed. Formally, this means – corporate profit tax for legal entities, and personal income tax for individuals. If someone bought cryptocurrency and then sold it at a higher price, that amount must be reported as income and subjected to taxation.”
Azerbaijan’s current tax laws state that resident enterprise profits are taxed at a rate of 20%. Personal income tax is different since it is progressive, with taxes ranging between 14% and 25%.
You Can Still Hold Cryptocurrencies
Statistics show that cryptocurrency trading volume is constantly growing in Azerbaijan. Because of this the state hopes to be able to increase its budget revenues. Between the months of May and December of 2017 there was rapid growth registered by crypto markets. Crypto Consulting CEO and founder, Elnur Guliyev, stated that even small $10 investments became profitable when made then.
This evolution led many to buy cryptocurrencies and just hold the coins. This is not going to be a problem in Azerbaijan since only when registering a profit from the crypto investment a tax would apply.
Blockchain And Crypto Technologies To Be Developed By Azerbaijan
Azerbaijan is a country rich in various natural resources. Up until now it maintained a really conservative stance when referring to cryptocurrencies. This was because cryptocurrencies are not officially recognized as legitimate payment means. With the government talking about taxation, this is surely going to change. While people in the country may see this as a bad thing, recognizing cryptocurrencies as payment means is a win for crypto in general.
A brand new association was set up by crypto sector representatives. The main activities are to educate and prepare regulatory proposals, together with consulting services if they are required. The new center is going to focus on blockchain technology implementation in banking and corporate sectors while supporting the projects that are funded through ICOs. Foreign experts will be consulted in order to cooperate.