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If your token issuing company is profitable, in a jurisdiction that charges tax, at some point the profit from token sales will most likely be taxable. However, when that tax point arises, and when the tax is paid can be mitigated. For example, a tax on the sale of the tokens at the outset, may be avoided with the correctly drafted token contracts. Plus, utilising ICO friendly international jurisdictions can be a valuable tool in ICO tax planning. Harvex can create tax efficient ICO structures at the outset, using our global ICO knowledge to benefit owners, investors and token subscribers alike. For active ICO’s, Harvex have vast experience in completing tax returns, with an emphasis on ICO companies.
Generally, no. If your company has no profit, the fact you own cryptocurrency will not immediately mean you owe any extra tax. On an individual level, if you have sold cryptocurrency at a loss, then you may actually be able to reduce your tax bill. In both the above cases of companies and individuals, we would recommend discussing with Harvex to ensure you are tax reporting your cryptocurrency correctly, as tax structures and situations are frequently different, especially in the cryptocurrency sector.
Depending if you hold cryptocurrencies for investment purposes, for trading purposes or accept them as means of payment will guide the accounting approach you should use. For example, cryptocurrency held for investment purposes would generally be held on the balance sheet and revalued periodically, with a different type of accounting approach implemented if the investment is held as an individual. This is very different to accepting cryptocurrency as a payment for services instead of fiat, or trading cryptocurrencies. Harvex' vast experience means we know how to correctly account for almost every digital asset class or digital currency type. Accounting standards for cryptocurrencies are evolving day by day and our job is to make sure we apply the correct accounting approach based on the latest legislation.

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