09.06.2018
805

Lithuania publishes ICO guidelines for regulation and taxation.

A document titled “ICO Guidelines” unveils, that released tokens may grant different rights to their owners, such as the right to participate in the company management process, receive part of the company’s profit, receive part of the company’s income, receive interest for invested funds, recover the invested funds and receive additional income through redemption of the tokens, sell the tokens to another person. If the tokens issued grant one or more of the rights described above, the probability exist that it will be considered as security and the obligation to comply with relevant legislation will follow. 

Funds collected through ICO are not considered to be the subject of corporate income tax when:

  • tokens issued have the characteristics of securities defined in Articles 1.101 – 1.108 of the Civil Code of the Republic of Lithuania (i.e. grant the right to ownership, management of a company or grant other shareholders’ rights such as the right to get a part of profits of the company in the form of dividends or other form, provide for the payment of interest or redemption of tokens or etc.) and correspond to undertaken obligations;
  • tokens issued grant the right to use a product or services by paying in tokens; the funds generated this way are considered as advance payment (advance) to be included into future contributions. The issue of tokens designated for acquisition of goods or services is considered as only a transfer of cash, it is not considered that the income is earned (i.e. tokens grant the right to the token holder to acquire goods/services for the amount indicated in these tokens), income is recognized when the entity sells goods or provides services for the real market price.

 In cases when tokens issued through ICO are not considered as securities or an advance payment for goods or services, but only confirm the fact of the payment without granting any rights, the funds collected are recognized as the income when the tokens are transferred (issued).

Thus, Lithuania became one of the first countries in Europe to adopt recommendations for initial coin offerings. In February 2018, such regulation was adopted in Switzerland, which is not a part of the EU.

ALL News

  • 28.09.2018
    3 995

    SEC and CFTC Charge 1Broker With Securities Law Violations

    The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are suing a Marshall Islands-based Bitcoin futures firm for allegedly violating federal law reports Coindesk.

    Read More
  • 19.09.2018
    1 783

    New York Attorney General Reports that Crypto Exchanges are Ripe for Manipulation

    Cryptocurrency exchanges are vulnerable to market manipulation and lack standard consumer protections reports the investigation by the New York State Attorney General's office.

    Read More
  • 13.09.2018
    1 047

    FINRA Has Taken Its First Crypto Disciplinary Action

    The U.S. Financial Industry Regulatory Authority (FINRA) has issued its first crypto-related disciplinary action. On 11th of September FINRA filed a complaint against Timothy Tilton Ayre of Agawam, Massachusetts. He was charging with securities fraud and the unlawful distribution of an unregistered cryptocurrency security called Hempcoin. 

    Read More
  • 12.09.2018
    1 932

    South Korean Banks to Limit Services for Crypto Traders without Identity Verification

    South Korean banks are reportedly implementing new measures for crypto traders. They are going to limit the services offered to cryptocurrency traders and investors without identity verification, Korea local news report.

    Read More
Загрузить еще

Contact with us