What is cryptocurrency and blockchain technology?

Basically, cryptocurrency is a form of decentralized digital currency designed for online payments. Bitcoin, which launched in 2009, is the first cryptocurrency and is the most famous and widespread. In recent years, bitcoin and other cryptocurrencies, including Etherum, have been seen as an alternative to money and are gaining popularity among entrepreneurs, investors and people looking to operate finance in the digital space.

The most popular cryptocurrencies are Bitcoin, Ethereum and Lightcoin. Other well-known cryptocurrencies include Monero and Ripple. Some are similar to Bitcoin. Others are based on certain technologies and have functions other than value transfer.

Cryptocurrencies allow value transfer online without resorting to an intermediary such as a bank or other financial institution which allows value to be transferred anywhere in the world, almost instantly, 24/7, with minimal fees.

Accounting services and transactions with cryptocurrencies

Brain Storm Consult offers an accounting and consulting service in connection with the tax treatment of cryptocurrency transactions.

Cryptocurrencies are considered as part of other financial instruments. Therefore, the National Revenue Agency supervises and controls individuals and legal entities in order to prevent tax evasion.

Taxation of individuals

Income from the sale of cryptocurrencies is treated as income from the sale of financial assets, is taxed on the total annual tax base and should be declared in the annual tax return by April 30 of the year following the year of realization of income.

Taxation of legal entities

For corporate income tax purposes, cryptocurrency transactions are also treated as financial asset transactions. Regarding the VAT Act, the trade in cryptocurrencies is an exempt transaction, but an obligation for registration arises on the grounds of Art. 96 of the VAT Act.

Cryptocurrency trading is relatively new, but is increasingly entering Bulgaria. Our specialists will advise you on all cases. Therefore, do not hesitate to contact us for more information and assistance. You can make an inquiry through our contact form, by email sales@brainstorm.bg or contact us at +359 2 80 99 740.