Humans registered with a Proof of Humanity will have to tax their UBI as income. This can be challenging for unexperienced users and edge cases might arise.
Rotki (https://rotki.com/) is a privacy-first & open-source portfolio tracker, accounting and analytics tool best-suited for this.
It could implement UBI taxation as a feature.
See the related issue on Github:
Add support for the proof of humanity UBI Token. · Issue #2790 · rotki/rotki · GitHub
However, open-source software development costs money.
The proof of humanity DAO could pay Rotki a fair price in UBI for implementing this feature and making the user experience as smooth as possible.
(Note that I am not affiliated with Rotki in any form)
What do you think about the proposal and how would you improve it?
What could be requirements and edge cases that should be considerer to correctly tax the UBI (as well as the actions required for the sign-up process)?
How can this process be made as simple as possible?
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Moreover, should users be informed about potential dangers associated with receiving UBI?
Receiving UBI tokens is a taxable event in most legislations.
Accordingly, people have to pay income taxes for the price at which they have received the token even if they sell it for a much lower price afterwards.
This can potentially be a dangerous situation if people don’t know about this.
I’m wondering if it could be considered a gift in US tax law. And so, not taxable to the recipient.
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@michaelheuer.eth totally agree. Is something we need to take care of.
I was thinking that the accounting service could be a premium feature payed in UBI, with which fund the humanitarian yearn vaults.
And also agree with @dogweather. In some countries, as in Mexico, we could leverage the case of UBI as a gift, rather than an income.
Whatsoever, the accounting is needed.
I’ll ping you later on this topic 
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I am not an expert, but I would guess not.
I think a helpful feature would be to automatically detect all actions connected with the submission deposit (self-funding & crowdfunding) and exclude them from taxation.
se me ocurre que una forma barata y rápida de poder hacerlo , es crear un ONG dependiente de PoH y de esta forma triangular la entrega de los UBI , a su vez facilitará la asociación con otras ONG a las cuales se pretenda ayudar .
Va a ser muy necesario en un futuro mediato .
dependiendo en que pais se quiera inscribir , podría dar una mano con ese tema
.It occurs to me that a cheap and fast way to do this is to create an ONG dependent on PoH and in this triangular way the delivery of the UBIs, in turn, it will facilitate the association with other ONG s that they intend to help.
It will be very necessary in the near future.
Depending on which country you want to register in, you could help out with that topic.
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Hi
I think you raised a very important point here.
Receiving UBI tokens is considered a taxable event in most countries. To make thing worst, taxation rules are currently being created now or being modified, so this is a challenging topic.
Since UBI tokens are issued every hour, and UBI price is constantly changing; each person would have thousands of taxable events each year. Collecting that information is a nightmare and cannot be done manually, so you would need a software like the one you proposed (Rotki).
This leads as to two options:
- User–centric
- Each user has to use the crypto tax software they like (Rotky, Koinly…) in order to get the correct information
- Advantages
- No extra task/cost for Proofofhumanity.id
- Problems:
- Most crypto tax software requires you to pay with credit cards and to provide some personal data, so anonymity is lost.
- The cost of these tools is significant, so a big chunk of the money received in UBI could end up being spent in getting the information needed to do the taxes.
- Platform-centric
- Proofofhumanity.id would be responsible of sending each user the information related to the UBIs that were issued to that user/ETH address
- Advantages
- It will save all registered user a ton of money and problems
- Relatively easy to implement. Proofofhumanity.id already have all the information
- Problems:
- New task/cost for Proofofhumanity.id. Solution for this should be developed
- No easy way to send the tax information to the user. See note bellow.
Note to Platform-centric problems:
- Currently, very few data are stored for every UBI user.
- Email is optional, so only people with this option enable could receive this info.
- I think that there are some ways to send messaging information through Ethereum network, but I don’t know the cost or limitations regarding the amount of information needed to be transmitted.
- Easier solution could be create an excel file (or simple app) in Proofofhumanity.id web page. Since all the user receive the same quantity of UBI per year, the quantities are the same for everybody. Country or residence/price conversion is important, but this can easily be done adding one column per country. For first year users, a simple “rule of three” can be used.
Regarding of the chosen solution, more information should be provided to the user in the registration process. There is no comment at the moment so many people are unaware of taxes obligations, which will create a huge problem for them in the future.