Lithuania government published guidelines for Initial Coin Offerings (ICOs) in the country on Friday, June 6. The ICOs guidelines shed light on the various scenarios where ICOs and cryptocurrency projects would fall under either securities regulations or currency regulations.
The document published on Friday covers a broad spectrum of regulatory aspects including taxation, accounting and Anti-money laundering (AML). According to the guidelines, a defining feature in the recommended framework is whether a token “grants profits or governance rights” to an investor who obtain the token via an ICO.
According to Vilius Šapoka, Lithuania Minister of finance, “These Guidelines are another step towards more certainty and transparency in the regulatory, taxation, accounting, and other requirements as well as better cooperation between different stakeholders.”
The new guidelines further spell out the tax implications for both individual and corporate investors. For individual investors, “income received from the individual sale or buy of tokens will be taxed standard 15% fixed income tax rate.”
Token issuers will not be subjected to tax if the tokens are locked or inactive or in a scenario where they are held for interests or dividend payments to investors.
Šapoka said that the guidelines are not a formal piece of regulation but an effort to establish a transparent industry where ICO can grow in a regulated environment. Šapoka added that:
” ICO market has not been regulated yet. It has huge potential, but there are risks that we must manage. We should make our efforts for Lithuania to become the main headquarters for those ICO project promoters who are willing to operate in a transparent and orderly legal environment .”