Income from cryptocurrency

Income from cryptocurrency

 

Question:
Hello,

I have cryptocurrency income accrued from cryptocurrency trading as an individual within a few months. I have the following questions:
1. Do I have to register for VAT as an individual?
2. Is there a legal way to reduce the tax payable (according to the NRA the cryptocurrency equates to a financial asset and the tax is 10%)?
I work under an employment contract and have no registered companies. Currently, I am no longer engaged in any kind of cryptocurrency activity, as I mentioned it lasted only a few months.

Thanks!

 

Answer:

Hello,

Although the income received is from a natural person who does not have a registered form of business activity, you have earned income from such activity and if these income for the last 12 months exceed 50 000 BGN, you are obliged to register under the VAT Act.

If your earnings are from cryptocurrency trading (you are not "digging" but buying and selling), then with a documented purchase of the cryptocurrency you have sold, you can reduce your realized sales revenue and pay tax only on the profits made, not on the income earned. We want to emphasize the documented purchase of the cryptocurrency that you subsequently sold.

Under the current situation, you should file an Annual Tax Return on Cryptocurrency Revenue by April 30, 2019, and you must also complete the Employment Revenue Application.

We hope we have been helpful.

Greetings!