Saturday, May 30, 2020

Bittax CEO Says 2018 Crypto Tax Returns Will Be Enormous

A recent interview with the founder of Bittax, Gidi Bar Zakay, which held at the just concluded Israel Bitcoin Summit in Tel-Aviv, provided insight on what is required of crypto users for taxes as well as the progress crypto regulation has made so far around the world.

Why People Need Bittax

Speaking on the challenges experienced by individuals while calculating their Bitcoin taxes, Zakay admitted that the process is a bit complicated to execute with just a calculator or Excel from the comfort of the home and even the most familiar method of calculation, First In First Out (FIFO), requires a lot of carefulness to ensure that the tax data is presented accurately.

When asked about why he launched Bittax platform, Zakay said he was initially prejudiced against Bitcoin like most people, but all that changed when he was asked to comment on a Bitcoin-related circular to be published by the tax authority. The circular opened his eyes to the potential in Bitcoin, a currency that is needed by the world at the moment.

How Does Bittax Work?

The Bittax founder said the services of the company would soon expand beyond Israel, where it currently operates to both the USA and Europe.

While taking about how the system operates, Zakay explained that users would need to input their addresses into the system at first, which then provides a complete rundown of their activity. Following this, the users will point out the transactions they own, the ones sent to a third party and the ones being handled by the exchange. However, if it happens that the user has forgotten certain transactions, the system will help them remember by making recommendations.

Once a full overview has been reached for the user, they will be notified of the missing data by the system. He added that the calculation method employed by the system is not the usual type but rather executes a more specific identification of sold coins and then calculates the tax liability. This, he said, makes the system unique.

How Many People Need Bittax Services?

According to activity data from various exchanges, hundreds of millions from across the globe will be needing the services of Bittax. Only few crypto owners pay taxes, and Zakay thinks that it is so because people are yet to understand that regulation will bring about international adoption of cryptocurrency while the government is yet to figure out a better way to collect taxes from crypto owners. Once this can be fixed, he said, “this process will unfold naturally.” Zakay says he is looking forward to witnessing a large increase in the filed reports for 2018 and even more for 2019.

What to Expect

The Bittax CEO said that 2019 would see more supervision in the digital assets market by the authorities and also tax payment by users will be increased. He added that more care should be adopted to ensure that the privacy of users who pay taxes is not compromised. He added that they are “working on a solution which will maintain the privacy of the users throughout their relationship with the tax authorities, and will only expose the necessary information, addresses and personal data not included.”

Speaking on the advantages of the solution for both coin owners and the tax authorities, he stated;

“This solution will be beneficial for both the tax authorities and coin owners around the world because it’ll be worthwhile for the users to report their earnings willingly and not wait for the authorities to locate them.”

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