The Lithuanian authorities are establishing cooperation with the cryptocurrency sector. The Ministry of Finance of the Republic of Lithuania has issued guidelines proposing a classification of tokens for ICO projects.
Despite the fact that cryptocurrencies are increasingly used in Lithuania, where cups of coffee for Bitcoin have become commonplace, and the number of blockchain startups and ICOs has exceeded all European countries, the authorities for a long time could not decide on an official position regarding the Initial Coin Offering.
The Central Bank of Lithuania, last year, opposed crypto assets in the economy, and only in April of this year organized a meeting with representatives crypto sector to discuss issues of regulation of the crypto industry. The round table allowed stakeholders from both sides to discuss the most important issues and come to a common conclusion on the need to create a legal framework for initial coin offerings.
As a result of the negotiations, two months later, new ICO “guidelines” were published by the Lithuanian Ministry of Finance.
The formulated principles are not a normative act, but are explanatory in nature and rather serve as a basic basis for the further development of legislation. However, the document touches on the main aspects of functioning, taxation and accounting for ICO projects and tries to resolve the main issue of classifying crypto tokens as securities. The problem of classifying cryptocurrencies as securities has become a stumbling block for regulatory authorities in most countries. Thus, in the USA, the Securities and Exchange Commission seeks to recognize all tokens as securities and put the issuance of securities operator licenses on stream.
The Ministry of Finance of Lithuania, in its document, divided tokens into -
- profit-generating
- giving the right to manage -
- used as a means of payment.
Thus, tokens that provide management rights in ICO projects and generate income for the investor are classified as securities and are regulated by laws on securities, crowdfunding and financial market instruments. Such tokens oblige the investor to pay tax at a rate of 15%.
Tokens that do not generate profit are controlled in accordance with the provisions of the Civil Code.
According to the document, mining is subject to VAT, and exchange transactions for cryptocurrency and fiat are not subject to VAT.
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