Kazakhstan mandates 75% revenue sale from crypto mining for tax purposes
Kazakhstan, one of the largest Bitcoin (BTC) mining hubs in the world, announced plans to introduce new crypto regulations aimed at reducing tax fraud and illegal business operations.
A new law signed by Kazakh President Kassym-Jomart Tokayev on February 6 reinstated the nation’s stance against illegal mining and issuance of crypto assets. Of the two different pieces of legislation, the first requires issuers of secured digital assets to have the authority’s permission.
Moreover, such issuers will be subject to monitoring in accordance with the current law in the country – “On combating the legalization (laundering) of proceeds from crime and the financing of terrorism”. The law enters into force from 1 April 2023.
The second piece of legislation targets unsecured digital assets, typically earned through crypto mining. To reduce the possibility of tax evasion, crypto miners in Kazakhstan will be required to sell at least 75% of their earnings via registered crypto exchanges. This rule, which aims to collect “information about the income of digital miners and digital mining pools for tax purposes,” will be effective from January 1, 2024 to January 1, 2025.
All licenses for crypto mining in Kazakhstan are issued for a limited period of three years – which differs based on whether the miner owns the mining facilities or not.
Related: Kazakhstan among top 3 Bitcoin mining destinations after US and China
Alongside the introduction of the above laws, Kazakhstan launched the pilot project of the central bank’s digital currency (CBDC) project – the “digital tenge.”
Next to the National Bank of Kazakhstan, #Binance presented a bilateral report on “State of the Digital Assets Industry and DeFi in Central Asia”.
The joint report provides an overview of crypto adoption, general trends in DeFi and the local digital asset industry.
— Binance (@binance) 3 February 2023
A report published jointly by the National Bank of Kazakhstan (NBK) and crypto exchange Binance NBK Deputy Governor Berik Sholpankupov wrote about the bank’s vision of a “collaboration between traditional finance and DeFi,” adding:
“In Kazakhstan, we also started a hands-on R&D project to explore how our CBDC – Digital Tenge, can bridge the crypto world with traditional fiat payment infrastructure.”
Earlier, in October 2022, Kazakhstan’s Astana Financial Services Authority (ASFA) granted Binance a permanent license to manage a digital asset platform and provide custody services.
