Tax related questions

Hi!

Recently I had chat with @rusty.spork regarding the token distribution for the latest leaderboard (Test token: ANT). I’m pretty confident I heard @Bux mention that the current reward will be claimable / airdropped and those test ANT will be convertible to the real ANT token after/at TGE. Rusty mentioned that the distribution of those test tokens will not happen and that the distribution will be in the real ANT & after TGE.

The reason I’m opening this topic is because I think it’s important to get clarity on this for tax purposes. For myself, being from the Netherlands, I would argue receiving ANT test tokens before TGE (that will be 1:1 convertible after TGE) would be much more beneficial tax-wise. One might argue the receiving tokens should be reported as income and paying income tax over it accordingly. If we would receive the ANT test token instead, we could argue we’re receiving tokens that have no value yet. Therefor, not having to pay taxes over it. I’m not sure if this is the same for every country, but I can imagine it is for many. In the end, we all benefit if we find the route of least tax-able events.

It would be great to get clarity on this. Also, feel free to use this topic for other tax-related questions. I can imagine, with years end around the corner, there will be more of these questions popping up.

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All I have ever heard is that the rewards from the beta rewards is what we get. Not the tiny test attos. Yes there was a few days when the test attos were going to be the rewards till they changed it to leaderboard again with tokens to be rewarded.

These beta testing reward tokens would prob be considered earnings for tax. Tokens for providing a service and I’d expect taxed accordingly

I’m not sure if you fully understand my question. Let me clarify:

If we would receive the test ANT tokens (the ones which we’re now earning attos in) before the TGE. We would receive tokens with no value. Therefor, it would not be a taxable event (in the case of the netherlands at least).

If we would receive the real ANT after TGE that has a trading price, those tokens will have a value and tax has to be paid accordingly.

Since we already have the EMAID bridge / airdrop mechanism set up, I think it would be better for most people to receive the ANT test tokens before TGE and have the converted 1:1 upon TGE. This last part will be a taxable event in some countries but they’ll pay tax over that either way, but not for us in the Netherlands it will avoid a taxable event.

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TAX is a messy country dependent issue for sure. There will be no universal answer to many of these questions for sure. Tax is almost always going to require accountants and lawyers in many cases to get right. Even than, and as I found out, the governing authority may take a different position.

That renders tax advice to be almost impossible. Look at even the USA where de-banking (again I have experience) was silently happening. For people, even here, who can be identified there will be targets on their backs.

So given that, this is a thorny and dangerous poison for anyone and especially any business to be seen to offer advice. The best we can do is to look and try to get the most acceptable global solutions and even then it won’t be enough, but at least if our approach is clear then it helps. The documentation to follow will help clarify exactly the approach and then it will be really down to individuals to get localised advice.

I feel the mess of the current regs means 2 people in the same jurisdictions with 2 difference tax auditors will have 2 different outcomes. It’s that messy. Anything that sniffs of avoidance will be a big issue for sure. In my case the tax authorities know of any wallet etc. and I still don’t feel safe, to be honest. It’s a really big mess and I hope in the coming years this all gets sorted out with clear rules to follow. Right now all we can do is guess and take the worst outcomes as likely :wink:

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In any case, if we receive something of no value, it cannot be charged, since 10-50% tax on something with 0 value at the time of acquisition is still 0 tax. As far as I know only France is getting ready to introduce a tax on unrealized profit, the rest of the world is not so brutal.


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Exactly, which is why I would ask the Autonomi team to distribute these test tokens before TGE.
What rusty mentioned is that they will be distributed after TGE and in the actual ANT token. In that case, it would have a price and it will be taxed.

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It is important that they spread the tokens before there is a market ie. before being added to the exchange or uniswap. In this case, even if it is after TGE, if the token is not traded anywhere and there is no way to sell, the price is 0 and the tax due is 0.


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Yes, that would work for us (in the Netherlands) as well. Though I think there should be at least a day between receiving and trading start, which is arguably a risky thing to do since anyone can create a pool on uniswap shortly after TGE.

Of course, but liquidity also matters, at least in Bulgaria. If the liquidity is $100, and it turns out that you owe a tax of $1000, it is obviously not possible to sell, which is taken into account by the tax authorities.


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Dutchie here too. In NL you pay savings and crypto taxes over a certain excess in ‘box3’, and that excess is only calculated on January 1st, so what happens after that in that year does not change the tax due, as far as I know.

Yep, you’re right. But one may argue that the earnings from leaderboard can be seen as income (providing a service, receiving a reward), therefor income tax would also apply. Trying to avoid that by receiving tokens that have no value.

One might argue the receiving tokens should be reported as income and paying income tax over it accordingly.

One might argue that, but in my experience there are no countries where that kind of transparent sophistry actually works. Talk to a tax lawyer.

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My tax question is why am I not making enough rewards to be concerned about tax :thinking: :joy:

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When I used to mine Ethereum on my rigs, I would report it as “income”. So I would report the fiat value of the ETH I mined at the time I received it. I use Etherscan to find that data, as you can see the current value and value at day of transaction. Then if I sell it later that would be a short or long term capital gain. This is how I have done it for my taxes for years as an American.

This is NOT financial or legal advice. This is NOT advice from Autonomi legal. This is just coming from me as a community member on how I have done things in the past. For more details we must wait on legal.

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Emaid/Maid since the beginning has been a placeholder token that is meant to be replaced with the token technology that will be used on the network. At TGE in January 2025 the ANT token that is meant to be used on the network will be ready. Emaid/Maid will be replaced with the new type of ANT network token. The ANT token asset will be the same as Emaid/Maid is a representation and placeholder of. As the replacement happens 1:1 then investors don’t gain anything. Just because an crypto asset changes name and type, that should not in a logical sense make it a taxable event, as you gain nothing. Type/technology and name will change but the asset will be the same as the placeholder token was meant to represent,

As we have no expert opinion yet then I provid what chatgpt answered:

Your reasoning is logical, but the taxation of such an event in Sweden will depend on how the Swedish Tax Agency (Skatteverket) interprets the nature of the token swap. Here are the key points to consider:

  1. Token Swap Nature: If the EMAID/MAID token has always been considered a placeholder or representation of the future ANT token, and the swap occurs 1:1 without any change in value or gain for the investor, it may not trigger a taxable event. This is because there is no realized profit or disposal of the asset—only a technical replacement.
  2. Taxable Event Definition: In Sweden, cryptocurrency is typically taxed when it is realized (sold, exchanged for another cryptocurrency, or used for goods/services). If Skatteverket views the replacement as merely a reclassification or upgrade of the same asset, it is unlikely to be taxable.
  3. Potential Risks:
  • If Skatteverket views the EMAID/MAID to ANT swap as a new acquisition or disposal of the old token, they might consider it a taxable event.
  • Documentation and official communication from the project team confirming the 1:1 swap and its placeholder status might help clarify this with Skatteverket.
  1. Recommended Actions:
  • Contact Skatteverket: Reach out to Skatteverket with the details of the token swap. Provide documentation showing that EMAID/MAID is a placeholder and explain the 1:1 replacement mechanics.
  • Document Everything: Keep records of your holdings before and after the token swap, as well as any communication from the project that explains the nature of the swap.
  • Seek Professional Advice: If there is any uncertainty, consult a tax professional who is familiar with Swedish cryptocurrency regulations.

Below chatgpt 4o answered a few more questions, if change of maximum supply wuold make any difference and such, if the wording proxy token mentioned in the whitepaper make any difference, manual versus automatic distribution.

Summary

During the year towards the replacement, the team has decided to reduce the total maximum future supply of the ANT token, the replacement of Emaid/Maid to Ant will still be 1:1. Will that effect that it might be seen as a taxable event?
ChatGPT said:
ChatGPT

The reduction of the total maximum future supply of the ANT token should not inherently change the nature of the replacement being a 1:1 swap. However, there are a few points to consider regarding its potential impact on taxation:
Key Considerations:

No Change in Your Holdings:
    If your EMAID/MAID tokens are replaced 1:1 with ANT tokens, and the value of what you hold remains the same at the time of the swap, it would still align with your original argument: there is no realized gain or new acquisition, just a technical replacement.
    The reduced total supply affects future availability of ANT tokens but does not directly alter the value of your holdings during the swap.

Market Valuation Impact:
    A reduced total supply could lead to speculation about increased scarcity, which might increase the market value of the ANT tokens over time. However, this would only affect taxable events if you sell, trade, or otherwise realize gains after the swap.
    If Skatteverket considers the reduced supply to significantly change the characteristics of the token (e.g., its perceived value or function), it might complicate how they classify the event. However, as long as the 1:1 swap occurs at the same value with no realized gains, this should not trigger taxation.

Swedish Tax Perspective:
    Skatteverket focuses on whether a disposal of an asset has occurred and whether a gain is realized. If the reduction in supply does not result in an immediate gain during the swap, it should not make it a taxable event.
    The reduction in supply would likely be viewed as a technical change to the tokenomics, not a factor directly impacting individual holders' tax liabilities unless it involves new rights or benefits (e.g., bonuses, staking rewards, or similar).

Recommended Steps:

Seek Clarification:
    If possible, request a ruling or guidance from Skatteverket on whether such a token swap, given the changes in total supply, would be taxable.

Document the Process:
    Keep evidence showing that the swap is 1:1 and involves no additional tokens, benefits, or realized gains for holders.

Focus on the Timing of Tax Events:
    Remember, tax liability typically arises when you realize gains, not when the structure or supply of a token changes, provided your personal holdings and value remain the same.

Likely Outcome:

As long as the swap occurs at a 1:1 ratio with no additional financial benefit and no disposal (selling or exchanging the old tokens for different ones of greater value), it should not be a taxable event, even with the reduced supply. The focus remains on whether you gain or dispose of value, not on changes to the broader tokenomics.
You said:
If the change happens with in an automatic way, where snap shot of the blockchain happens and the replacement token is then distributed to addresses, or if it requires manual steps exmaple sending the token to the foundation and getting the new token in return or similar, would that potentialy change anything?
ChatGPT said:
ChatGPT

The method by which the token replacement occurs—whether automatic (via a blockchain snapshot and distribution) or manual (requiring token holders to take action, such as sending EMAID/MAID tokens to the foundation to receive ANT)—could indeed influence how Skatteverket views the event. Here’s how each scenario might be interpreted:

  1. Automatic Replacement (Blockchain Snapshot and Distribution)

    Nature of the Event:
    In this case, EMAID/MAID tokens are effectively retired and replaced with ANT tokens automatically. There is no action required by the holder, and the replacement happens seamlessly.
    From a tax perspective, this is most likely to be seen as a technical upgrade of the existing asset. Since no disposal (sale, exchange, or realization of value) occurs and you gain nothing additional, it is unlikely to trigger a taxable event.
    Tax Agency Interpretation:
    Skatteverket would likely treat this as the same asset continuing under a new form, especially if documentation supports that ANT is a 1:1 replacement for EMAID/MAID.
    There would be no taxable event unless Skatteverket interprets the new tokens as fundamentally different (e.g., with new rights, benefits, or changes in valuation). However, this seems unlikely in the case of a 1:1 swap.

  2. Manual Process (Sending Tokens to the Foundation for Exchange)

    Nature of the Event:
    If holders are required to send EMAID/MAID tokens to a designated address and receive ANT tokens in return, it could be interpreted as a disposal of EMAID/MAID and an acquisition of ANT. Even though the exchange ratio is 1:1 and no gain is realized, this might resemble a transaction, which could attract tax scrutiny.

    Potential Issues:
    Skatteverket could argue that sending EMAID/MAID tokens constitutes a disposal, even if no economic benefit is realized.
    The new ANT tokens might be treated as a separate acquisition, with their cost basis reset to the market value at the time of receipt. This could introduce a tax event, particularly if the value of ANT differs significantly from EMAID/MAID during the swap.

    Mitigation Strategies:
    Provide clear documentation showing the manual process is part of a 1:1 technical replacement with no gain for holders.
    Emphasize that EMAID/MAID was always intended as a placeholder for ANT, and the manual process does not involve any real disposal or profit-making transaction.

Comparison of Scenarios
Aspect Automatic Replacement Manual Process
Holder Action None required; fully automated Sending old tokens to receive new tokens
Interpretation Risk Lower: Likely viewed as a technical upgrade Higher: May be seen as disposal + acquisition
Tax Event Likelihood Minimal: No disposal or gain Possible: Disposal may trigger tax scrutiny
Recommendations

Seek Clarity from Skatteverket:
    Describe both methods and inquire whether either would trigger a taxable event.
    Provide evidence that the swap involves no realized gains, regardless of the method.

Document Everything:
    For either method, retain detailed records showing the replacement is a 1:1 process, including project documentation, snapshots, or proof of token intent.

Cost Basis:
    Clarify that the cost basis of EMAID/MAID should carry over to ANT tokens to avoid resetting their value at the time of replacement (this is crucial for future disposals).

Likely Outcome

Automatic replacement is the safest option to avoid being classified as a taxable event.
Manual replacement introduces a slight risk, but if well-documented and clearly defined as a technical swap with no economic gain, it should still not result in taxation.

You said:
I read in the newest version of the whitepaper that Emaid/Maid are mentioned as a proxy token, to me that was what I meant when called it a placeholder token. Is that similar or change anything?
ChatGPT said:
ChatGPT

The term “proxy token” aligns closely with your earlier description of EMAID/MAID as a placeholder token. Both terms suggest that the token is a representation of another underlying or eventual asset, in this case, the ANT token. This distinction strengthens your argument that the swap to ANT is not a taxable event because the EMAID/MAID tokens were never intended as a standalone asset but rather as a proxy for ANT.
Key Points About Proxy Tokens and Tax Implications

Nature of Proxy Tokens:
    Proxy tokens act as a stand-in or representation for the actual asset or token to be issued later. In this context, EMAID/MAID are explicitly described in the whitepaper as proxies for ANT tokens.
    The 1:1 swap is essentially fulfilling the original promise of the proxy, meaning you are not gaining a new asset but merely replacing the proxy with its intended counterpart.

No Realization of Gains:
    Since the EMAID/MAID tokens' value has always been tied to the future ANT tokens, the swap does not generate any new value or profit for the holder.
    The swap does not involve disposing of EMAID/MAID in exchange for something unrelated; it is simply replacing the proxy with the actual token it represents.

Skatteverket’s Likely View:
    If EMAID/MAID were explicitly described as proxy tokens from the beginning, this strengthens the argument that the swap is not a disposal but rather a continuation of the same asset in its final form.
    The classification of EMAID/MAID as a proxy token should reduce the likelihood of Skatteverket considering the swap a taxable event, as it further emphasizes that no economic benefit or change in ownership occurs.

Does Calling It a Proxy Token Change Anything?

No Significant Change: The term "proxy token" is simply a clearer description of what you meant by "placeholder token." It adds precision to your argument and aligns with the project's intent as described in the whitepaper.
Strengthens Your Case: Using the term "proxy token" might make it easier to explain to Skatteverket (or a tax advisor) that the swap is not a taxable event because the EMAID/MAID tokens were never independent assets but always proxies for ANT.

Recommended Actions

Leverage the Whitepaper:
    Reference the whitepaper's description of EMAID/MAID as proxy tokens if you need to explain the swap to Skatteverket.
    Include this in your documentation to demonstrate the continuity between EMAID/MAID and ANT.

Explain the Proxy Nature in Tax Filings (if Needed):
    If asked, clarify that EMAID/MAID tokens were proxies and the swap is not a disposal or acquisition, but the fulfillment of the proxy's purpose.

Stay Consistent in Terminology:
    Use "proxy token" in any discussions or documentation with Skatteverket to align with the whitepaper and avoid confusion.

Likely Outcome

The use of “proxy token” should make no material difference to the tax treatment of the swap, but it strengthens your argument that the event is not taxable because it reinforces that EMAID/MAID were never intended to stand alone as independent assets.

Even if the pre-TGE tokens have no value at the time of issuance, you would owe tax on the gain in value after TGE.

In some jurisdictions, you won’t pay tax on those gains until you sell. That’s why they want the transfer to happen before they are tradeable.

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In theory it should not matter when you switch technology, Maid is converted 1:1 to ANT, so Maid/Emaid will always have the same value as ANT as 1 Maid can be converted to 1 ANT. It should be like a contract for 100 gold coins, that contract will always have the value of 100 gold coins, no matter when it will be converted or no matter if that contract sells for 50 or 150 gold coins at a current market. There should be no taxable gains from switching technology in theory.

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Yes you are exchanging a promise note for the actual article

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It is unlikely that any major jurisdiction would charge tax on the burn to ANT. It’s what happens when you sell ANT for currency that the issue will raise its ugly head.

Several major countries have different rules according to how long you hold it. Germany is tax free if crypto is held more than year. The US and Australia appiy different tax rates depending on how long you held it.

The question is therefore whether burning your MAID for ANT causes this clock to restart.

My specific case:
Austria used to be tax-free if held for more than year. This was changed in 2021. The old rules still apply to my MAID, but does the burn push me into the new set of rules where ALL profits are taxed?