Overstock Becomes First Major US Company to Pay Taxes in Bitcoin

Investment Into Overstock's Cryptocurrency Exchange Causes Share Price to Rocket

Internet retailer Overstock has announced that it intends to become the very first major US-based company to pay a part of its state business tax in Ohio using Bitcoin. 


Taxes With Bitcoin

According to its own investor portal, US-based internet retailer Overstock is set to pay part of its Ohio state business tax using Bitcoin. Supposedly, by doing so, the retailer will become the first major US company to pay its taxes using the digital currency.

Speaking on the matter was Patrick M. Byrne, Overstock CEO and founder, who noted:

We have long thought that thoughtful governmental adoption of emerging technologies such as cryptocurrencies (when accompanied by non-restrictive legislation over these technologies) is the best way to ensure the U.S. does not lose our place at the forefront of the ever-advancing global economy. […] We are proud to partner with forward-thinking governments and officials like Ohio and Treasurer Mandel to help usher in an era of trust through technology for our nation’s essential financial systems.

Earlier in November, Bitcoinist reported that Overstock’s share price soared as the company announced plans to sell its retail-oriented business and to focus on previously acquired blockchain startups.

‘Ahead of Its Time’

Paying taxes with Bitcoin in Ohio became possible in late November 2018 at OhioCrypto.com.

According to State Treasurer John Mandel, who pioneered the idea, Overstock’s move to pay its taxes with the cryptocurrency is ‘ahead of its time’:

We applaud Overstock for becoming the first national brand in America to register to pay taxes via cryptocurrency. Their embrace of blockchain technology was ahead of its time and we’re proud to have them join OhioCrypto.com.

In an interview for Fortune, Mandel also added that paying taxes with Bitcoin reveals certain financial advantages. According to him, taxpayers who use credit cards pay 2.5 percent service fees, while those who use Bitcoin will only incur a fee of 1 percent. Early filers like Overstock, however, won’t incur any fees at all.

What do you think of Overstock paying part of its state business tax in Ohio using Bitcoin? Don’t hesitate to let us know in the comments below!


Images courtesy of Shutterstock

The post Overstock Becomes First Major US Company to Pay Taxes in Bitcoin appeared first on Bitcoinist.com.

Source: Blockchain

UK Gov’t Unveils Cryptocurrency Tax Guidelines For Individuals

Bitcoin cryptocurrency tax uk

Her Majesty’s Revenue and Customs (HMRC) yesterday released a policy paper, detailing cryptocurrency tax guidelines for individuals. The good news is that no new punitive tax measures apply to crypto, which essentially falls under existing taxation schemes.


Which Tax Applies?

After defining what a crypto-asset is, the paper notes that the nature of the industry requires a continually developing tax perspective. It breaks down the difference between exchange, utility, and security tokens, although the guidance within applies specifically to exchange tokens.

The tax treatment, however, is not dependent on the definition of the token, but on its nature and use. In simple terms, crypto-assets received as a form of payment will be liable for income tax. Those held as a personal investment will be subject to capital gains tax, but only on disposal.

Cryptocurrency Tax Liabilities

Income Tax and National Insurance contributions are liable on crypto-assets received in the following circumstances:

  • Non-cash payment for employment or services rendered
  • Mining fees or awards – where the mining activity is not at the degree where it would amount to a taxable trade.
  • Financial trading in cryptocurrency – where the level of organization and frequency amounts to financial trade.

As crypto-assets gained through these activities count towards total earned income, the level of tax payable depends on tax bracket.

Capital Gains Tax

In most cases, HMRC expects that the buying and selling of crypto-assets by an individual will amount to investment activity. As with any other asset, this requires payment of tax on any gains realized at the point of disposal.

For the purposes of crypto-assets, disposal may include:

  • Selling for money
  • Exchanging for other types of crypto-asset
  • Using as payment for goods or services
  • Giving away to another person – who is not a spouse or partner

Charity donations are not usually subject to capital gains tax. Special rules apply to pooled assets (those which a person acquires over time and at different prices), regarding initial purchase cost.

Rates of capital gains tax are 20% for higher or additional rate taxpayers, and 10% for basic rate taxpayers. If your gains plus your income fall within your personal allowance then zero tax is due.

The Bottom Line

This is a very clear and well-written paper, and it is refreshing to see the British government eschew the “Crypto bad!” mentality, favored by some. By treating crypto-assets as regular income and/or investments, dealing with them should be made easier, as most taxpayers (and all tax professionals) will already be familiar with these processes.

Interestingly, the Bank of England posted a Twitter poll this week, asking for respondents preferred way to receive Christmas money. No prizes for guessing what’s coming top. Although perhaps somebody should tell the BoE that ‘bank transfers’ are ‘digital currency.’

Additionally, acceptance of bitcoin and other cryptocurrencies by the government for tax payment could also be on the horizon. Earlier this month, Bitcoinist reported that UK Member of Parliament, Eddie Hughes, has called for local authorities to take a lead, and accept Bitcoin payments.

Do the cryptocurrency tax guidelines help mainstream adoption? Let us know in the comments below!


Images courtesy of Shutterstock, Twitter

The post UK Gov’t Unveils Cryptocurrency Tax Guidelines For Individuals appeared first on Bitcoinist.com.

Source: Blockchain