Boyan Josic, Mogul Media fund Serbia Blockchain Startup

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Mogul Media has come to funding terms with Serbia Blockchain (https://serbiabc.com), a blockchain startup based in Belgrade, Serbia.  Serbia Blockchain is leading the charge for blockchain growth and development in Serbia.

Boyan Josic, CEO of Mogul Media stated:

“Serbia has great potential from both a product development standpoint given its rich history in programming talent, and also from an economic standpoint. Embracing blockchain tech and forming a strong hub of startup and innovation would do wonders for the overall economy in Serbia. They have the opportunity to become a regional leader in the space in my opinion.”

While Serbia has been going through a revival of sorts, there are challenges.  Igor Radmanović, Partner at BDO Serbia, states the following:

The first economic issue that pops up is the definition of cryptocurrencies in the light of the existing financial regulations in the Republic of Serbia. If we regard Bitcoin as a synonym for any cryptocurrency, it is a decentralized digital currency not regulated by any country. However, it is possible to use it for payments of goods and services and exchange it for conventional currencies. Bitcoin has not been officially recognized as a payment method in Serbia, thus it cannot be regarded as money in a real sense. Hence, if it is not money, the economic logic dictates that it should be some kind of an asset. It is the lack of definition and inability to fit the Bitcoin characteristics into the existing regulations that gives a headache to accountants and tax consultants worldwide.

On the other hand, individuals buying cryptocurrencies do not have to take care of how to record them since they do not keep books of account, but they should pay attention to potential tax implications of such investments. The Personal Income Tax Law does not recognize income from investment and cryptocurrencies which would be a tax base. However, the Law leaves open the possibility for the income generated from the difference between the Bitcoin purchase and selling prices to be taxed through sundry income. There are other questions, such as whether bitcoin transactions are taxable in terms of VAT or if Bitcoin mining can be regarded as an economic activity.

Cryptocurrencies also constitute a problem in applying other regulations, such as those on foreign exchange operations. Taking into account that residents cannot have bank accounts abroad (except in special occasions), the question is whether owning Bitcoin or other cryptocurrency constitutes a breach of the National Bank of Serbia regulations (which again depends on what is Bitcoin – money or something else)? Moreover, anti-money laundering requires that all cash transactions over 15.000 EUR should be reported – does a payment of a service or an item of goods made with a cryptocurrency exceeding this amount requires that the taxpayer undertake actions and measures of being acquainted with and monitoring the party when it is known that the owner of the address where the bitcoins are located cannot be practically traced?

It is certain that, if cryptocurrencies keep on generating global interest, both global and local regulations will have to be amended in order for the new digital currency to be legally regulated.

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