Cryptocurrency taxation is a subject that concerns a growing number of users, traders and investors. An area that creates a lot of confusion among taxpayers is the application of VAT, or the value-added tax most countries levy on the sales of goods and services. Georgia has become the latest nation to free crypto-fiat transactions from VAT, a decision that affirms Bitcoin’s status as a currency. The same has already happened in many other jurisdictions, despite the absence of comprehensive regulations.
VAT-Free Crypto Exchange, No Income Tax for Traders
Traders of digital coins, both companies and individuals, will not owe VAT to the government in Tbilisi. That’s according to a newly adopted bill aimed at regulating the taxation of entities that trade or mine cryptocurrencies. The law was recently signed by Georgia’s finance minister Nodar Khaduri and entered into force at the end of June. The document provides a legal definition for decentralized digital money:
Cryptocurrencies are digital assets that are exchanged electronically and based on a decentralized network. Their exchange does not require a reliable intermediary and they are managed using distributed ledger