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United States: Tax on Cryptocurrency

The IRS has added a question on the first page of Form 1040 for the year 2020, requiring taxpayers to declare any virtual currency transactions.

The federal tax rate on bitcoin capital gains varies between 0% and 37%. (FY2020). When you buy cryptocurrency, you should keep track of the price you paid. This is the crypto asset’s cost basis. The selling price is the disposal price when the crypto is sold. The capital gain is the difference between the selling price and the cost basis. The fair market value of virtual money in US dollars as of the date of payment or receipt will be demanded of taxpayers.

Any gains or losses from a crypto asset held for less than a year are taxed at the highest marginal tax rate applicable to your taxable income. Any losses can be used to offset income tax up to $3,000 in total. Any additional losses might be carried over to the next year.

If the cryptocurrency was kept for more than a year, the appropriate tax rate is substantially lower, ranging from 0% to 15% to 20%, depending on the individual or combined marital income.

Canada: Tax on Cryptocurrency

Cryptocurrencies, such as Bitcoin, are legal in Canada. You can use digital currencies to buy products and services on the Internet and in stores that accept digital currencies,” according to a Financial Consumer Agency of Canada webpage on digital currencies. Open exchanges, often known as digital currency or cryptocurrency exchanges, allow you to purchase and sell digital currency. Depending on the nature of the trading operations, Crypto attracts either CGT or income tax in Canada. If the income comes from a business, the entire amount is taxed, however, capital gains are only taxed 50% of the time.

United Kingdom

The HMRC has published a crypto handbook in the United Kingdom. This guide explains how crypto assets are taxed. Individuals who hold crypto assets as a personal investment, mainly for capital appreciation or to make specific purchases, may be subject to CGT when they sell them.

Australia: Tax on Cryptocurrency

Australia defines crypto as an asset. The trading stock rules, not the CGT regulations, apply if bitcoin is held for sale or exchange in the regular course of business. The sale of bitcoin held as trading stock in a firm generates ordinary income, and the cost of acquiring cryptocurrency held as trading stock is tax-deductible.

Crypto that has been kept for more than 12 months by an Australian tax resident qualifies for the 50% CGT deduction if the CGT rules apply. ⁷ This effectively indicates that 50% of the net gain is exempt from taxation. A CGT event will be triggered if crypto is disposed of but not taken from a crypto wallet. Instead of the actual sale price, we’ll use the crypto’s AUD market value on the day of disposal.

Netherlands: Tax on Cryptocurrency

The tax system of the Netherlands differs from that of the Commonwealth countries. It levies a wealth tax rather than a capital gains tax. Rather, a presumed interest is levied in the Netherlands on the value of all assets minus all liabilities at the start of the tax year. The presumed interest is subject to a flat 31 percent tax rate in 2021, 30 percent in 2020.

Germany

Because it does not recognize cryptocurrency as a monetary currency, commodities, or stocks, Germany has been labeled a “crypto tax haven.” Crypto, on the other hand, is considered private money. This distinction is critical since private sales in Germany result in tax benefits. Tax exemption is available for private sales of up to €600.

Reliance Jio

According to the firm, Reliance Jio plans to accelerate growth through JioPhone, Enterprise Data, and other digital avenues via the recent spate of launches, coupled with new digital app offerings.

“Thus, we assign an EV/EBITDA multiple of 20 times on FY23 EBITDA, with a target price of Rs 847 per share (for its 66% stake). The higher multiple captures the digital revenue opportunity, potential tariff hikes, and opportunity in the Feature Phone market (not built into our estimates),” Motilal Oswal Institutional Equities has said.

Retail business

The firm values Reliance Retail’s core business at 35 times FY23E EV/EBITDA and assign 4 times to Connectivity, arriving at target price of 755 – after excluding the recent 10% stake sale.

“Our premium valuation multiples capture the accelerated growth in new store openings, digital commerce, and the new JioMart platform,” the brokerage has said.

Oil to chemicals business

“Vaccination drives appear to be gaining momentum the world over, with large economies such as the US and India inoculating more than 4m daily. This is expected to soon revive demand for transportation fuels, thus boosting gross refining margins. Since the company has stopped disclosing GRMs separately, we build in EBITDA of USD107/134/mt for FY22/FY23E (vis-à-vis USD73-84/mt reported over 3Q- 4QFY21) – on the back of improvement in refining and petchem margins,” Motilal Oswal Institutional Equities has said.

“Using SOTP, we value the Oil to chemicals business at FY23E EV/EBITDA of 7.5x, arriving at a valuation of Rs 764 per share for the standalone business, and add Rs 68 for the E&P assets. We ascribe an equity valuation of a) Rs 847/share to RJio on FY23E 20x EV/EBITDA and b) Rs 755/share to Reliance Retail on FY23E 35x EV/EBITDA, factoring in the recent stake sale. Reiterate Buy, with target price of Rs 2,430 per share,” Motilal Oswal Institutional Equities has said.

The shares of Reliance Industries was last seen trading at Rs 2,257 on the BSE.

Disclaimer

The information above is based on the report of Motilal Oswal Institutional Equities. Investing in stocks are risky and investors should do their own research. The author, the brokerage firm or Greynium Information Technologies are not responsible for any losses incurred due to a decision based on the above article. Investors should hence exercise due caution as markets have run-up significantly. Please consult a professional advisor.