According to domestic media outlet Kursiv, Madi Saken, legislative analyst at the National Association for the Development of the Blockchain and the Industry of Data Centers of the Republic of Kazakhstan (NABDC), revealed the decision at a domestic blockchain event “Blockchain Day” on December 4.
The news report states that Kazakhstan legislators have completed drafting a law on crypto taxation and the bill is currently being studied by the office of the President. The bill is expected to be sent to Mazhilis, the lower house of the two-tier Parliament of Kazakhstan, sometime this month.
In particular, the suggested law will define the legal status of cryptocurrency mining and also taxation rules. As per Saken, crypto assets won’t be brought under the tax bracket because tax obligation arises only if the income is generated in fiat money. Therefore, taxation is applicable only if the cryptocurrency is sold for fiat money. Saken further detailed as follows:
“Tax liabilities only emerge when there is an income in the form of real money, particularly when a cryptocurrency is exchanged for real money, which means it is sold on an exchange. Then, this income in the form of classic money will be subject to taxation.”
Nevertheless, cryptocurrency mining will be considered as entrepreneurial activity in scenarios where companies offer facilities to utilize their crypto mining hardware. Mining farms would have tax obligation similar to data centers, the document reports. Until now, Kazakhstan’s government has been crypto and blockchain friendly.
Last year, the Astana International Financial Center (AIFC), the governor of Kazakhstan’s main financial center asserted that crypto and blockchain innovation will be fostered even though there is a need to regulate cryptocurrencies. Earlier this may, the AIFC collaborated with blockchain company Bitfury to partner on blockchain apps across a range of industries.