Why does cryptocurrency reduce tax evasion (Why does cryptocurrency appreciate)?
Why does cryptocurrency reduce tax evasion? According to Article 225 of the Inc
Why does cryptocurrency reduce tax evasion? According to Article 225 of the Income Tax Law, tax evasion for cryptocurrencies refers to the failure of individuals to pay capital gains tax when engaged in digital asset transactions. If someone conducts transactions using virtual currencies and evades taxes, they will need to pay value-added tax or general tax rates. However, if you purchase digital assets such as Bitcoin and Ethereum using fiat currency and do not pay interest and goods and services tax (GST), then this payment will be subject to a 20% corporate income tax or other corporate income tax.
Therefore, the tax authorities in our country believe that digital yuan should be treated as tax revenue. Because in our current laws, “any form of withholding and stock conversion is prohibited” is considered illegal and criminal activity. Why does cryptocurrency reduce tax evasion? We can analyze it from the following points:
1. Cryptocurrency can reduce concealment. The anonymity and untraceability of the current digital yuan allow people to quickly identify the source and transfer of their held digital assets, ensuring accurate and reliable information transmission.
2. With the development of blockchain technology, more and more institutions are exploring how to provide secure technical support services for their digital wallets. Many financial institutions, including central banks and insurance companies, are actively exploring new business models based on digital currencies.
Why does cryptocurrency appreciate?
Why does cryptocurrency appreciate? The answer is simple: because it helps people get through long bear markets and benefits them greatly. If we consider Bitcoin and Ethereum as the biggest difference between the two, the value of these two cryptocurrencies will also rise.
Historically, when the price of Bitcoin doubled within a year, its price started to rise. However, due to factors such as slow transaction speed, high transaction fees, and lack of transparency, market fluctuations occurred. Currently, the most popular cryptocurrencies in the market are Bitcoin and Litecoin. So why does their price increase? Let’s look at the following two reasons:
1. The emergence of blockchain technology can reduce trust costs;
2. Decentralized financial technology allows assets to be more easily realized (including mortgage lending and exchange loans);
3. Blockchain technology can solve information asymmetry;
4. Smart contracts make data more efficient and secure;
5. Based on distributed ledger technology, a new global trade settlement system has been built.
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