In may countries (for Europe at least) staking rewards lead to the incurrence of personal income tax (Germany between 30-45%) at the moment when the user withdraws the staking rewards while airdrops are tax free.
Therefore, I wanted to discuss openly here in the community if anyone from the tech side of the Terra foundation could advise if the following thought and idea is possible:
Integrate switch so LUNAtics staking can receive their rewards either as rewards to “withdraw” or receive once weekly as a Luna or UST airdrop. In the “backend” a smart contract would just sell all rewards and buy Luna or UST and airdrop it once a week on the staker in case the user opts in to receive it once a week as “staking airdrop” instead of “staking rewards”
Countries tax treatments (please feel free to add your country’s taxation or amend in case anything different as the space is highly dynamic):
France 45% (personal income tax; flat rate 19% approved (?)) on staking, airdrops TBD
Germany up to 45% (personal income tax) on staking, 0% on airdrops
Questions to clarify:
- Possible from a technical perspective?
- Willingness from the Terra foundation to include the feature to further improve the ecosystem?
- Insights into the treatment of staking vs airdrop in different jurisdictions (Germany is clear and confirmed)
- Sentiment to put a official proposal forward
Thanks for any thoughts