Lithuania publishes cryptocurrency and ICO guidelines
The rising importance and popularity of cryptocurrencies – particularly the governance of initial coin offerings (ICOs) – has not been lost in the Baltic region, where Lithuania has just published comprehensive guidelines.
Lithuania’s ministry of finance issued guidance covering four areas: regulation, taxation, accounting and anti-money laundering/combating the financing of terrorism (AML/CFT).
Brave new world
Finance minister Vilius Sapoka (left) said: “We acknowledge that the brave new crypto economy world is here to stay, this is why we encourage and invite its participants to innovate and create in Lithuania.”
Regarding ICOs, the ministry said the guidelines outlined just part of those areas already examined by “relevant institutions” (such as the country’s central bank) and in any discrepancy between the guidelines and positions of these institutions the latter would prevail.
The ministry said it must take into account “different ICO models and different characteristics of tokens”.
It added: “In some cases such activity may be subject to the requirements of the legislation of the Republic of Lithuania and supervision of the Bank of Lithuania.”
Sapoka said: “We are one of the first ones in Europe who prepared comprehensive guidelines on the legal framework for ICO projects covering regulatory as well as taxation and accounting.”
Taxation of cryptos
Virtual currencies will be recognised for taxation purposes as “current assets that can be used as a settlement instrument for goods and services”. For value added tax, cryptos will be considered as the same currency as euros, dollars and other fiat currencies.
“Income received from individual purchases and sales of virtual currencies will be taxed standard 15% fixed income tax rate,” the ministry said.
The mining of cryptocurrencies will remain VAT exempt.