The lack of acceptance of Bitcoin by retailers and buyers is not only due to perceived technological barriers and an inadequate ecosystem. Tax complications also plague potential BTC spending.
Why Bitcoin is not yet advanced today
Bitcoin’s development is based on three popular statements that show why Bitcoin is not used more frequently to buy and sell goods and services. The first is the relatively small number of shops, both online and offline, that accept Bitcoin and other crypto currencies as payment methods. This is due to a lack of infrastructure and the complexity of departing from crypto to fiat.
The second point is that the price volatility of crypto currencies is seen by the public as very high, which makes it difficult for merchants to accept digital assets. On the other hand, many Bitcoin holders do not have to spend their Bitcoins before the price rises. Another obstacle, however, is to prevent the use of Bitcoin in retail, namely taxation. The way the tax authorities deal with crypto currencies varies greatly from country to country: real estate, assets, raw materials and, in rare cases, currencies. However, a sale of a crypto currency is usually considered taxable income.
The tax authorities have quickly classified crypto currencies and created framework conditions so that their use is not exempt from tax. For example, in the US and Japan, users must accurately log each of their crypto transactions if they are to fully comply with the regulations.
There are few crypto oases
According to reports by Coin Central, there are very few crypto “tax havens” in the world. Portugal, Belarus, Malta and Singapore are the only countries to tax crypto gains at zero percent. Crypto gains are also not taxable events in countries that are illegal or unrecognized, but this corresponds to a tax-free scenario.
Countries such as Germany are subject to other tax-privileged countries that do not tax capital gains from crypto if they are held for more than a year. Taxes in Peru on capital gains from crypto are five percent.