According to the new law, which came into force at the end of June, the Georgian authorities are exempting crypto-FIAT transactions from VAT. The law was approved by the Minister of Finance of Georgia, Nodar Khaduri. Georgia is one of the first countries in the world that has taken such steps.
Cryptocurrencies are the subject of controversy in many countries around the world. Recently, even Donald Trump spoke about them, claiming that he is not a Bitcoin fan, and cryptocurrencies are not money.
Mining and crypto payments still taxed
Georgia joins countries that are more friendly to Bitcoin and other cryptocurrencies. In the statement of the representatives of the Georgian government, we read that cryptocurrencies are digital assets, and their network is decentralized and does not require intermediaries. Nevertheless, using crypto for paying for various assets will still not be allowed in the country. Georgia still considers Georgian lari as the only FIAT and treats cryptocurrencies more like foreign currencies.
In addition, cryptocurrency mining will still be subject to VAT. Georgia is a very good place for mining due to a large amount of electricity processed from hydropower.
More liberal changes in Singapore
Earlier, the cryptocurrency world has been informed that Singapore is going to take similar steps. The project was presented by the Inland Revenue Authority of Singapore (IRAS). The project is to be constructed with the residents of the Asian city-state by July 26 – if it is adopted, which seems very likely, it will come into force on January 1, 2020. The assumptions of the new law are to be more liberal than in Georgia – both crypto-FIAT transactions and paying with tokens for services or tangible goods are to be exempt from VAT.