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RE: Tax Accounting for Witnesses

in #accounting7 years ago

Many people misunderstand the income tax laws in their country. In the UK it's considered a currency, in the US it's considered an asset but income tax still applies.

In the US and the UK you're required to pay income tax on assets that you receive, they still count as income whether the asset is bananas, or STEEM.

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Oh I understand, but it must be recognized. I assume that it was but wasn't sure.

I think you might not be correct though that SP can be considered under income tax. For example, I can't actually pay you in bananas in the US or UK, I must pay you in currency. You must only pay income tax on pay as income, so there is no income tax on non-currency payments. I think this is to protect people from unfair pay and to be able to account for it easily, and thus facilitate tax.

There is such a thing as "benefit in kind", which is probably what the bananas would count as if the relationship was employer / employee. I'm not to sure what a trade counts as, which in the case of witnessing would probably be running a service for an asset.

I'd also be interested to know whether SP qualifies as a currency even in the UK, since it is non-transferrable for example. You can only divest it into Steem at a fixed rate, suggesting that it's more like game or store points. Have you considered this?