So, the Turkish government is looking to wrap up their crypto tax regulations sometime next year.
But they haven't really given any details about what the tax rate will be for cashing out cryptocurrencies at banks or digital platforms yet. Just for comparison, India's crypto tax is sitting at 30%, which a lot of folks think is way too high.
Honestly, I think taxing crypto is gonna be a big headache for them, especially since it’s tough to track transactions involving coins in non-custodial wallets. Typically, capital gains or realized income would be the main things they look at when figuring out taxes on crypto-to-fiat conversions.
I mean, I get that regulation is better than just banning crypto altogether, but it really is a double-edged sword when it comes to decentralization, owning your data, and user privacy. No matter where you are, they seem to want to find a way to coexist with crypto, which could lead to some serious adoption.
Is this supposed to be a positive development or otherwise? Because this seems like a plan or trap that Turkish government is trying to discourage crypto speculation and encourage more traditional investment because the proposed tax rate is between 15% and 30%, which is quite high compared to traditional financial transactions according to what I read here . Although it has not been approved but I don't expect anything less. The Turkish government has been considering imposing a tax on cryptocurrency transactions since at least from 2021 And from what you posted, it seems that they're getting closer to finalizing this tax. If it's approved it would make Turkey one of the first countries in the world to impose a tax on crypto transactions. However, we are watching to see how this tax would be implemented and enforced.
The Turkish economy has a very large share of shadow exports. Although sanctions have been introduced against Russia, a lot of goods still come from Turkey and payment for these goods also includes cryptocurrencies. So any tightening of legislation could harm the Turkish economy, which already has many problems. And in Turkey, just like in Russia, there are many laws that are not respected.
Turkey is going in the wrong direction. With one of the highest inflation rates in the world, they first banned payments with cryptocurrencies, and, as it usually happens, as people skipped the ban they have realized that it is better to regulate them and try to tax them. The problem is that if you put high taxes you incentivize people not to declare. If instead of 30% they put a 5% tax almost everyone would declare because for how cheap it is it is not worth getting into a potential problem with the tax authorities, but with how disastrous Turkey's monetary policy is going I am not surprised.
Well slowly all other countries will start imposing tax on Bitcoin. But it will be very interesting to see how they are going to track it. Surely they cannot impose taxes on Bitcoin transactions, rather they will try to track any conversion into Fiat through the banking channel. That's how other countries are texting cryptocurrency.
But one good thing is going to happen, probably after a structured framework a lot of merchants might become interested in accepting Bitcoin payment. But we are yet to see this.
I can't read the full content, but is this draft the same thing as the document released on the latest news?[1] I can't really read it since it is in Turkish, but a quick search doesn't show the 15% number (unless my browser fucks up and failed to search the whole document). I might be wrong, but it seems like they are still open and researching further on the details.
[1] https://www.resmigazete.gov.tr/eskiler/2023/10/20231025M1-1.pdf
Turkey to toughen law on crypto assets - minister
ANKARA, Nov 1 (Reuters) - Turkey is preparing new legislation covering crypto-assets to persuade an international crime watchdog to remove it from a "grey list" of countries that have taken insufficient action to prevent money laundering and terrorist financing.
The Financial Action Task Force (FATF) downgraded Turkey to a so-called grey list in 2021. Addressing a parliamentary commission late on Tuesday, Finance Minister Mehmet Simsek said a FATF report found Turkey fully compliant with all but one of the watchdog's 40 standards.
A lot of things are going wrong in Turkey at the moment.
I think new legislations in the financial sector are their smallest problem.
As long as this government,and dictatorship is in place, and they keep supporting terrorist groups like Hamas and trying to call all Muslims to "fight all the Jews", it doesn't matter what they are doing regarding crypto. It will have 0 influence on bitcoin in general I think.
Sooner or later this will end really bad.
Crypto taxation is a challenge for governments, but regulation is better than a ban. Governments should focus on regulating intermediaries and taxing capital gains and realized income at a reasonable rate, while allowing people to hold and use cryptocurrencies without disclosing their identities. This would create a fair and balanced regulatory environment that fosters innovation and adoption.
It is better to avoid politics, because there will be a lot of counter-news about the bombing of hospitals.
In such a situation, all countries will be forced to raise taxes and look for additional sources of budget replenishment. And whose economies collapse faster, those countries will be among the losers. We live in an era of change.
Don't hold your breath, it's Turkey and Erdogan we talk about:
27 December 2021
Turned out to be a nothingburger one and a half year later, this will be at most slightly different.
That's what they are aiming also, they don't give a damn on the coins you hold in your wallet they are targeting specifically exchanges and capital gains, and for a trader you simply have no way out of this, let's not even mention DEX, it's not there were the real money is made, it's all in CEX and they know they can grab that data with a single click.
There is only one flaw in your reasoning, you assume that if you tax something by just 5% you will have a flow of grateful citizens who will be on January 1st on the stairs of the IRS to pay up. I don't think there is another region in the world that with the same income and education has the same hate for paying tax and the same affinity for tax evasion as southern Europe and that part of the middle east, if it's one thing Greece and Turkey have in commons is their hate for paying a single dime in tax, and you can see what that has lead to in both cases.
High taxes are an indirect encouragement for you to HODLINGgg, or at least to think several times before selling, and may lead some to evade paying taxes by incorrectly reporting profits, but it is a strategy that has proven to fail in reducing dealing with cryptocurrencies, especially since some may choose to continue trading because of free money when trading bitcoin.
Türkiye is not Europe and America, where tax laws are respected. There are a lot of Russians in Turkey and all private exchanges work the same way as shadow exchangers in Moscow. No taxes and no reports. If you come to a tourist city like Antalya, you can easily buy or sell your cryptocurrencies and even be able to pay for the rent of an apartment.
https://www.turkiyetoday.com/business/finance/up-to-22-years-in-prison-for-unauthorized-crypto-providers-in-turkiye-24385/
Up to 22 years in prison for unauthorized crypto providers in Türkiye
"The Turkish Parliament (TBMM) has passed a bill introducing new regulations on crypto assets. Individuals and legal entities operating as crypto asset service providers without authorization will face imprisonment for 3 to 5 years.
The Bill on Amendments to the Capital Markets Law has been approved by the TBMM General Assembly. According to the bill, crypto asset service providers must obtain permission from the Capital Markets Board (SPK) before establishment and operation. Compliance with the criteria set by TUBITAK is required for SPK authorization."
If the laws that will be implemented by the Turkish government are as planned as below.
I think it makes sense and is legal, considering the increase in crypto users in Turkey, very high, this could add to the government's annual asset income in crypto taxation, that's something that advances regulations with comprehensive thinking about the crypto sector.
However, there are points that in my opinion are not possible for taxation in Turkey, as is said about tax for transactions, this will have a few obstacles to regulate legally, What's more, as reported 0.03% in one transaction, it seems this is difficult to do, unless government taxation focuses on crypto exchange services operating there only, maybe that makes sense, as is done by other countries.
The Turkish government taxed crypto currencies so they could get removed from grey list, and 2 days ago we left the list.
https://www.bbc.com/turkce/articles/c0x6x01w911o
google translate:
https://www.bbc.com/turkce/articles/cz9dp87d8pgo
Google translate:
The gov doesn't really care about taxing crypto imo. They did it because many people were using crypto to wash their dirty money in Türkiye and the Europeans didn't like that.
It looks like the crooks finished the job successfully and now leaving grey list is more beneficial to the country.
The date of the first news I gave link to is Nov/23. It took 8 months to come up with a simple regulation. Now you know the reason.
Would it be taxable if someone did not sell any cryptocoin and only continued holding it? If I bought bitcoin after the implementation of this rule, do i need to pay taxes for unrealized profits? This would he headshaking if they do this. However, of you are only forced to pay taxes after selling your cryptocoin to fiat, I reckon that this would be very good for a hodling coin like bitcoin. Turkish people should be encouraged to become bitcoin maximalists heheheheh.
Usually no countries impose tax on unrealised profit. It works similar to stocks. If you hold a stock whose value goes up making you wealthy on paper, the government cannot impose tax on that. They can only impose tax only when you sell it. Crypto taxation will work similarly.
Also there are more practical problems in crypto taxation. It will be interesting to see how Turkish government plans to handle it.
The situation with laws in Turkey is somewhat similar to the situation with laws in Russia. In some situations, the laws are very strict, and in other situations, they are formal. If, for example, I need to transfer money from Russia to Turkey, then I will give cryptocurrency and the person in Turkey will receive dollars, euros or local currency without any taxes in cash.