Iran government proposes an annual license for Bitcoin and cryptocurrency mining. The miners need to submit the required documents before continuing mining.
The article was updated on 02 February, 2020 by Amicus.
20 September, 2019 | AtoZ Markets – Iranian Bitcoin miners are taking advantage over other countries after the Iran tax authorities have indicated that miners in the country will be exempted from paying tax on their earnings. However, the exemption is not entirely free, as the Bitcoin miners will have to repatriate their offshore earnings.
When repatriating their overseas earnings, Iranian miners will have to follow procedures which have been laid out by the Iranian central bank. This is similar to the Iranian National Tax Administration (INTA), which has created this exemption for non-oil exporters.
Iran Government’s Bitcoin and Crypto Mining License
According to the Cabinet of Iran, licensed and registered cryptocurrency miners will be required to submit information such as:
- Their list of business they have,
- The estimated value of investments,
- Current employment status,
- Rental agreements and the value of their mining equipment and the duration of the mining project.
The license will also need to be renewed every year. Iran has been a preferred location for crypto miners due to its inexpensive electricity cost. For example, one Kilowatt-hour of electricity price at US$0.5 cents as compared to US$0.12 in the US. But, even with a tax exemption, miners will have to consider the higher inflation rate. Although the move to provide tax exemption is enough to trigger profitability among Iranian miners, local miners believe that the country’s government is inflating their earnings.
High Electricity Bills for Bitcoin Miners
According to the miners, more than 70 percent of their earnings used to pay bills with electricity and maintenance, consuming the most significant portion of the earnings. Recently, Iran released a new plan to bill electricity consumed by miners based on the consumption rate.
Fortunately, despite conflicting reports from Iran’s financial regulators, efforts by the Iranian government to recognize cryptocurrency mining is fruitful. Consequently, Iranian miners might be able to safely continue mine Bitcoin through even when crypto prices hit bottom.
Moreover, the move to exempt miners from paying tax comes in less than two months since the Iranian government recognized virtual currency mining as an industrial activity. The recognition, however, opened the crypto mining industry to regulation. Therefore, miners need to seek licenses from the country’s Ministry of Industry, Mine, and Trade.
Many see this turn to cryptocurrency as the piece in the puzzle to overcome the economic sanctions imposed by the US, which have almost disabled the country’s trade with other countries. This could be bypassed by holding Bitcoin and other altcoins that are not under the control of the US.
Think we missed something? Let us know in the comments section below.