Bitcoin Forum

In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.

So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.

So the actual way of getting the real numbers is quite bad.

In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...

All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.

Sure it is still possible to hide Bitcoins, but then it is illegal.


...or did I miss something?

But that your government recognizes bitcoin as a currency? I doubt it. Your income in bitcoins according to the law is not revenue. If you buy goods with bitcoin it does not fall under the tax base. If you exchange them for your currency, then taxes will have to pay.

You can tax bitcoin that way but government could not tax all of one's bitcoin because one person can only give 1 of his/her address and keep most of his/her bitcoin on other addresses that he will not mention to the government. That way he/she can evade tax in bitcoin. Even if it is illegal, how would they know if someone is evading bitcoin tax? So the one who will do it has a high probability of not being punished by doing this.

People who will want to evade taxes will just not report all their addresses. They will keep coins on separate wallets, use multiple accounts on exchanges and other services, run their coins through mixers, exchange Bitcoins for some anonymous alts like Monero, Zcash and Dash, and then convert them back to BTC. If you are not dumb, you can hide your coins well enough. But of course noobs will be getting caught, like they are getting caught today on this forum, when they have multiple accounts and try to join signature campaigns, and when managers check their addresses, they get proof that multiple accounts belong to a single person.

...ok guys.

In my country we can pay the power bill and buy tickets for railway, we can even pay some taxes with btc.
What I'm talking about, if every country is treating btc as a currency, then, it is not different to cash to tax it.
It makes it even much, much easyer. Think twice before you post...

but thanks for replay ;-)

i don't know why people are so weird about taxes when it comes to bitcoin. i get that none of us are happy about paying taxes but why is it always different when it comes to bitcoin!
people pay taxes on literary anything you can think of with no complains but when it comes to paying taxes on owning bitcoin, using bitcoin, trading, etc they all start protesting vigorously!


it is the same as asking you to report all the properties you own!

People talk about bitcoin tax as it is anonymous and nobody has any record to match its owner but i do think bitcoin is no different from forex trading or share trading that you do ,in both cases you invest to gain profit then deposit them in bank .it is wrong when you hold a good amount of money with yourself without any record.simply put money in bank and go with ease.

Hiding cash under your bed or gold bar also tax evasion which is illegal, if government really regulate and taxed bitcoin it is better just report and pay the tax, it is possible to hide bitcoin but when you want to change it to fiat or spend it the government will know about it

In my country we do pay taxs with cryptocurrencies, if you made profits from buying and selling. If you just hold then it's ok. We don't need to give adress to show proofs i guess it is based on trust. But i can tell you some exchanges are highly watched so if you're receiving large amounts be sure they won't need your report.

Basing on the situation you do example is quiet complicated but possible. If government would tend to plan that thing it will consume time and somehow useless since people can anytime hide their assets or money in other address because they cant force you if you have another address even they would try to seek out i can say it would be useless.Imposing tax is possible only on the services you do use.

In my opinion bitcoin should not be seen as property therefore it transactions should be exempted from tax. I see bitcoin as money and not gold or commodity or property but a medium of exchange for good and services.

Remember Bitcoin can saving in hard wallet and the government can't check it, if want tax Bitcoin, I think we have some ways:
1. Create a World Bank for storage Bitcoin all user on the world and all user obligatory deposit to this bank, it useful for the government check balance Bitcoin anyone
2. Create tax fee any transaction in Blockchain Bitcoin, but only need government have huge hardware for mining or a way look like as PoS

You did not miss anything, that is how the tax system works and always has worked, it relies on trust. The tax office will trust you, along with random audits, but most governments now can only tax on your fiat money. When you cash it out, they will know and tax you on that income. Governments around the world will eventually catch up to the intricacies of bitcoin but it's inherent nature makes it easy to be anonymous.

Taxation of bitcoin is in the hands of the government. Most of the time government don't show much importance on these issues and recently found that Israel making plans to levy taxes on the transaction taking place and this is followed to add bitcoin to the taxable asset.

Yeah, you missed a lot to be honest.

I now own a BTC address with $5 in it and other addresses I may or may not have had access to now belong to someone from Aruba. I don't own them, someone far away does. It's weird why they keep paying for my stuff. Either way, that's not my address. I don't own it, can't be taxed because they're not in the same country and I'm not the owner of the address.

Damn shame how that simply doesn't work, huh?

Giving away your Bitcoin Wallet Address won't solve the problem of Taxation. You know why? Because even if they can monitor it incoming and outgoing transactions they won't know which one is categorized as earnings or just someone remitting you money (which is not counted as income) this can be a major problem for the citizen as he/she might be taxed wrong, I don't know a clear solution for this even giving a dedicated address for your business will not solve the issue.

Sounds hassle to me. Let the tax be shouldered by the bitcoin exchanges that is operating per country. Since we shouldered fees in every type of services that bitcoin exchanges is giving us, we are being tax now directly via using them. As long as the fees is reasonable then it's fine to me since no doubt that a legit bitcoin exchange should be operating under legal terms of the said country. We have the advantages here on the other hand.

Registering every bitcoin users in the said country is a shit and I doubt government will implement that way. Waste of budget.

You can hide bitcoin but it would be better to declare the TAX for it if your country recognize it as a legal currency and be a good citizen for your country. If your country do not recognize it as a currency you are not forced to pay TAX for it however when you exchange it to receive cash you must pay taxes.

Do you think that everyone who owns Bitcoin suddenly will go and report every single address they own?
Don't you think that tax in some countries is already ridiculously high, we are giving out more than 50% of our earnings in tax!
Bitcoin should remain tax-less for some time, just to boost and push adoption of this technology, then in the future, we can think of some advanced way to tax BTC.

That's correct. There's no way to trace transactions or to make people give up their addresses. Addresses are not connected to identities which makes it impossible for the government to prove anything. If they wanted to tax you they'd have to prove beyond reasonable doubt that you own these addresses and this is impossible, unless they can find you posting a signed message on social media or something.

Nice strategy to avoid taxes, but I think there are more ways to invest money into several commodities or stocks to make it doubled.
Gold bars is a good one than just store fiat money which always losses its value due to inflation.

In Bitcoin
If the tax department make a rule to get tax from bitcoin, they cannot get from people who don't want to report their addresses. Govs can't track it because it's anonymous feature of a wallet which we do not need to register the id.
The best way they could get taxes is from local exchanges that located in the country, such as coinbase in USA.

There are two concerns about implementing it. Firstly, bitcoin has to be accepted by the governments as a currency, which most unlikely they will do. Secondly, the governments will tax on the currency of that country, and the volatile price of bitcoins literally going up and down almost every minute, it will be hard to fix a widely acceptable exchange rate to express its value in flat at the time of tax assessments.

This is not that easy. Tracking people or groups using or making profit from bitcoin is not a simple task, there are multiple vectors. But surely possible.

It's easier to just tax exchanges. If you cash out, you get taxed - if you hold, nothing happens.
It's nightly impossible to keep a record of every single bitcoin wallet, moreover with single-use wallets and paper wallets.
If you get paid on bitcoins, the tax should be collected on the payout.
The government won't be checking your bank account to get your taxes, it will just tax your transactions and products. It kinda doesn't matter what currency you are using.

LOl. I will never ever give the government my address and the number of my bitcoin. It will totally this destroy the anonymous and make me become a joke on the internet. No one will give the government those information

Bitcoin could only have a chance to tax it if BTC will become centralize, were every they can create laws for it. But as long as bitcoin is decentralized it will never be happen that bitcoin could have tax or it will be hard for the government to tax it.

I think people tend to forget taxes only make sense if the state manages tax revenues efficiently and effectively.

When a government spends $6.5 trillion taxpayer bucks on a war in the middle east which increases the number of terrorists in the world and helps ISIS grow from a small organization to a worldwide power.

That type of inefficient and ineffective state spending represents a destruction of wealth and prosperity for the people of a nation.

In my mind there is a way with which someone can put tax on bitcoin and that is if the state start their own wallet and allow everyone to use that then they will take the tax from that users. But I do not think that it will be favorable.

Bitcoin is not taxable and it should stay like that. If they try to make bitcoin taxable, blockchain community will find a way to elliminate the method they (tax takers) track people to tax them.

It is still possible. Do you really expect people to submit their bitcoin addresses so that the government can track them down? Let's just say that they don't do the "right thing" and they don't submit anything to the government. What will ahppen to them? Nothing, most likely. Because no way is the government going to check on every single household just to get a few mBTC worth of tax.

Also, your model is flawed because people constantly use multiple bitcoin addresses. In fact a lot of wallets do this automatically which means that submitting your bitcoin address does not do anything at all. Your receiving address will change over time, automatically.

There are forms out there for taxing bitcoin that you supposedly must fill out, but nobody does and the government doesn't seem to care at all because crypto is a small market compared to stocks and stuff, and it's not worth the time and money to track everyone down.

What kind of massive supercomputer would be needed to constantly watch everyone's menial spending? Just charge sales tax. It's 100% easier. If people are ripping off the govt then they'll just increase the sales tax.

While in my country the government takes all the taxes and something extra on top by including bull shit excuses in our power bill utility, gas, water and whatever we buy pretty much has tax included by 9% of the value of the purchase we pay tax on whatever we buy and sell.
When it comes to Bitcoin there is the possibility to use a mixer in order to hide your Bitcoins and there is no other way to avoid taxation in Bitcoin.

Good luck implementing this. Even if this legislation pass, what is stopping people from making additional addresses and just register one with the government? The only way they can really make it hard for people to enjoy their mone is if they heavily regulate exchanges, making it harder for people to just cash out, since transactions would be tracked.

Still, I'm sure people would find ways to get around this. My country accepts bitcoins as legal payment and our exchanges are required to get their customers' personal information but that's just it. They are not taxed here, probably because of how volatile it is. Many here still consider going into bitcoins as taking a risk.

As my country currently doesn't recognize bitcoin as a currency i don't pay any tax on it  :)

Under this scenario, I might choose not to use my Bitcoin for local transactions and will only use it online where I know that the government could not track it down. In my view, the government should not stop anybody from having a Bitcoin and should not tax anybody just for having one but when there can be transactions especially on a registered merchants then probably we have no choice but to pay some form of tax....but the government has to first recognize Bitcoin as cash or at least as an asset and lay down some framework for all residents to follow.

Bitcoin already have a taxation : it's the VAT.
simple.

in my country, it's 20% of the price.  ::)

I really would want to know the country you are residing because what it means to me is that the government of your country AHS equally recognise bitcoin as a currency and that is why it can be allowed to be disclosed when filling the returns to the revenue agencies, over here its not like that so we still have something to hide under. At the same time it will be outrightly illegal not to disclose because that would amount to tax evasion which is criminal in nature that could earn one a prison sentence.

As I know the taxes is take by government from the people's income/salary/profit. Just because you have 10 btc in your wallet, it doesn't mean you have to pay tax of its amount. I think it's too complex to tax bitcoin. The simplest​ way they can do is to receive reports from the exchanges about our transactions.

Tax requires some proofs so do as receipt ,so it may only taxes the transactions we made ,like what you sad on exchanges,companies,sites or some store of ever had. It will be hard to hovernment to put tax on btc since its decentralized and hard to control.

I don't want to give the details of my Bitcoin wallets or Bitcoin holdings to the government. Doing so increases the risk of the information ending up in the wrong hands, and the chances are high that your coins may be stolen by some hacker. IMO, Bitcoins must be taxed only if they are being converted to fiat.

For all types of VAT?
http://www.vatlive.com/vat-rates/european-vat-rates/

You missed one key point - taxation on income. If you're earning income in Bitcoin and the tax on that income hasn't been whithheld you'll need to declare on your tax forms at the end of the year. This income may be solely within your control to report - e.g, you sell something online. Or It may get reported to the government on your behalf - e.g., income paid to you by your employer is almost always required to be reported to the government. If the income is due to the latter scenario the government will expect you to declare that income, however they'll only know to call you out on it if the conduct an audit on you.

How governments treat bitcoin - as a currency or as an asset - will also play a part in the taxation rules and what rate is expected to be paid, e.g., the personal income tax rate or the capital gains tax rate.

Here's a good summary on things to consider related to the taxation of Bitcoin: https://en.bitcoin.it/wiki/Tax_compliance (https://en.bitcoin.it/wiki/Tax_compliance)

I guess that part of disclosing your bitcoin is something government has been able to lay their hands on because there is no way to verify if what you will be disclosing or not as at now like we have now compared to using fiat. And I think this is one reason why government will not accept bitcoin anytime soon because they need the money and bitcoin as at today will not give them their own share of the pie.

If any new rule will made regarding to track every Bitcoin address then I don't think it will be a successful step for them to get success to caught the tax stealler  because Thier are lots of the ways to make anynomious deals in the Bitcoin with cold storage no one can track you .
So in my opinion there should be another wallet by the government for the Bitcoin and each wallet is verified with the eKYC verification .
So that every detail will remain in the single wallet and then no one need to track , they only need to see that how much he made received and sent  and how much he made profit . In this way they can easily apply the tax for the earnings .

You're saying that by the government understanding which accounts you spend money on that they'd be able to trace your revenues?  But credits to your bitcoin account might not necessarily be income.  It could also just be you making a transfer or deposit.  That would need to be differentiated, and whether it will show up as capital gains if the value of bitcoin rises while you're holding it.

But at the end of the day, the amount of tax evasion currently going on with fiat is massive.  It just depends on whether people honestly report their revenues or not.  Any currency has an opportunity to pay and evade taxes, which would be illegal.

Taxation with bitcoin is possible to some extent. Because with bitcoin government can't trace the bitcoin holding and altcoin holding of particular person. Only through transaction made for the cashing out, the value can be calculated and based on this taxation can be done.

If the government is not going to put tax on bitcoin, they will surely find other ways to do so. Sooner or later, when the use of such currencies goes into mainstream, the government would set policies for them to get a share of whatever we own. Even if you just keep you bitcoin, they would most likely find other ways in taxing it. And if you are just a casual user, they would tax the items you would buy, much like value added tax on goods and commodities.

Nah, government don't give a shit about that, what they know is if you have some sort of additional income out of your "Zone" it'll be considered as an additional income even if you're actually just converting your wealth to bitcoin and want to reverse it again.
In my country, the taxes is about 30% which absurdly high for someone who has unstable income and "unrecognised job".

It will be a long time before that becomes feasible. First, the country has to recognise bitcoin as a currency and also a source of income. That will take years and then the country has to trust and rely on bitcoin enough that it would implement this.
 
The other issues are avoiding taxes with this new system, and it really looks pretty easy to me. Let me make an example, say for your taxes to be paid you would have to link your bank account and then every year the government would tax you off that account or accounts. You could easily make new accounts and hide money there and avoid a heap of tax that you would have to pay. This is what you are basically suggesting here, except with bitcoin, it sounds nice, but would have too many kinks to work out and it would be way too easy to avoid paying tax with this system.

I'm looking into living off Bitcoin legally, and so far I'm thinking the easiest way is to make a company. That way the company has clear accounts with spendings and earnings and can pay all the needed taxes. Then I'm just an employee of the company, with a salary in fiat.

Government always warn about btc use ! i dont think its legal in many country .

It is legal in most countries... There aren't many countries that put on regulations on bitcoin, most don't even consider it a currency. The only warnings i ever received was from banks that would rather not have me do EUR/BTC exchanges.

Depending on where you live, you should be able to do this as a corporation, or under your personal income taxes.  Keeping track of the accounts clearly are necessary either way, with respect to income, and capital gains.

It's not that easy as you can think of. Bitcoin is yet to be globally recognized as a currency in the first place, which is not going to happen soon. However, as a tax payer, you can always declare your bitcoins as an asset with some valuation and pay taxes, no one is stopping you from that. But on a lighter note, I will not approve the idea of the government peeping in my bitcoins.

Well government are always ready put huge to on every thing that is being use by people and that is making profit for me . there could be tow points about implementing it. Between world accepted by all government as a world currency and that will take good time we all knows secondly the government will take on currency of that country and the outline price  it rally going up and down every day .it will be trough to fix a widely acceptable rates to express its value in time so I guess government will take a wise decision.

Our government treat bitcoin as stock so if your revenue came from trading then it can be taxed. Capital gain that we've earned needs to be reported and it will be taxed by the government, as long as you do trading on regulated exchanger you don't have to worry about reporting taxes. The problem is if you do trading on unregulated it will leads to your revenue will not be taxed. The point is if you want to pay taxes then report them.

The opposite things happened in my country, even if we're already making a trade in a regulated and official exchange, even if already paid the taxes required by the exchanges themselves, we still need to report the income and get taxed about 30%, damn, that's a huge amount of money and only be thrown for the sake of stupid taxes without a good services as a return from government. It's like paying for nothing, at least until the corruption gone.

This required cooperation from wallets providers, they have to separate the bitcoin already taxed and yet so I hope there is a serious study of the tax issue for the wallet providers.

The example does not make sense, if people can hide their cash, stocks, secret bank accounts even if it is illegal to do so according to your example, then why suddenly when it comes to bitcoin everyone is going to say, yeah I’m going to give my information, those people that do not care will hide their bitcoin too even if it is illegal.

Well as said before countries don't require you to disclose bitcoin addresses but what most countries require is for you to disclose your assets and bitcoin assets should also be disclosed and the only tax you should pay on that in most countries is just income tax

If your goal is to improve society and civilization.

Encouraging the state to cut taxes, spend more efficiently and streamline operations to cut spending are in your best interest.

People shouldn't support raising taxes at every opportunity unless they want to increase suffering, pain and agony in the world.

Of course, but when it comes to digital assets like Bitcoin countries will either ban it or tax it. So the best outcome for us Bitcoin supports is to let countries accept it as a currency and tax it appropriately

Prior to 1913 when income taxes were legislated, united states economic growth was normally 10% per year.

After income taxes began to strangle the US economy growth stagnated until today we barely have 1% per year economic growth.

The best outcome is for people to realize taxes are poison. They kill economies, strangle job markets, restrict innovation and progress. They also decrease living standards and quality of life.

If bitcoin is ever taxed and regulated, its quality and value will decline significantly. Governments aren't structured nor incentivized to spend tax revenues effectively, fairly or efficiently. Socialism destroys wealth, standard of living and progress. The end.

If the coding community really wanted to, I suppose we could implement some internal system.  The best I could imagine would be some manner of reverse reward system, more of a reverse staking system, based not on held balance, but volume.  Say on Dec 31, each wallet calculates a "tax" based on a percentage of the volume/overall balance throughout the past calendar year, then sends that "tax" amount to a known collection address.

You know examples when people support raising taxes? In my country there is even a law that forbids to make a referendum on the tax issues. I do support the idea that before to solve the issue of expanding the base of taxation is always considered to optimise existing revenues.

I doubt that everyone will honestly report their addresses to the bitcoin-purses. They are anonymous and you can earn yourself and not share with the state.

Well bitcoin can never be fully regulated, but when it comes to taxing it's already considered an asset and most countries require to pay income tax on it...

but in such countries as european for example. there is one bad tax named VAT, so if even you change one asset for another on commercial base, purchasing something, you have to pay VAT tax to government

When it come with tax the bitcoin wallet i use is free and develop here in my country it is based wallet that we can use to send coins to coins without fee and it is totally free when every time i withdraw bitcoin from bank or any remittances and this is how i love to use our wallet because some of the wallet now has big fees even you are going to send little amount,

Woah, that was interesting. What country you from? We almost have the same situation as we can also use our wallet in our country to withdraw as long as our valid ID is verified by the server, it is a online wallet though, but we cannot send coins without any fees, I mean that takes lots of money, how do they do that.

Yes,unless you keep your bitcoins with you,you are safe and government will not be able to know about your holdings.But when you convert it into cash,then you come under the radar o government and you are accountable for your bitcoin earnings.

It would have to be chain wide, or we could just move coins around to avoid it.  It would be fair and the only two ways I can think to get around it would be off chain wallets(side tokens) or keeping a software wallet off-line for a long period of time and the chances are that whenever it came online it would throw the TX.

 
Taxes would have to be done at the sale level and that means that it will fall on the businesses.  Income through Bitcoin will have to fall to what a person is willing to report and what the IRS will track down.

Bitcoin or any other crypto currency is falling under the tax base, because of it's actually profit. I really don't know how the government is going on to out watch all this digital profit, bit I am sure they are creating their plans about it. Maybe something like local wallets where you will have to fill all your private information and banning other kinds of wallet. Don't know.

It is better to hide your money in your bitcoin wallet and pay bills with it at least you won't pay any taxes from your government right now many rich people in my country putting their money in bitcoin in order to evade taxes. in our country taxes is more than your salary if you will think of it lol.

There are countries where governments are into plan to impose taxes only for organisations and business like they will be removing tax structure from individual person's income. I believe with this kind of taxation structure, it will be possible to impose taxes on bitcoins. Still bitcoin is not from any central authority so that they will be reporting your holding and your address/wallet information. Hence only volunteer submission of how many bitcoin holding one person is having is the only way to tax which cannot be reliable all the times.

Bitcoin taxation might get harder in country like USA or Europe. For now 3rd world countries need not to worry about the bitcoin that they earn and spend as most of their government is busy in solving their own countries problems. Many countries don't even recognise bitcoin as currency and people in there do have lots of money stored in the form of bitcoins. They are already evading the tax and due to poor banking system nobody asks much questions from where the money came. Many of them have tax exemption for money won in games, bets etc and thus they can easily put forth reason that they earned it from such games and can easily surpass the tax. Anyway, if you have taxes on it the you should really pay it for better of you and your future. :-)

I have no idea how taxation works because I've never had any money. Now I just realized i've managed to stack a decent amount and mostly with signature campaigns along the years along some trading. I wonder I would explain the origin of the money to the taxmen. Do you just claim you got paid for posting in some internet forum in form of BTC? will they ask for addresses, accounts and more proof? It's weird.

I don't want to do anything illegal or avoid any taxes so I want to know how to properly do this whenever I sell.

I have considered contacting a professional on this matter but no one seems to know how bitcoin works..

Already they are high fees for the transaction, deposit fees in the localbitcoins. Simply stabbed the people who are earning little in bitcoin. They are trying push to out the people from bitcoin to altcoin. Now, speaking about taxation on bitcoin will give a bad move by the whales in bitcoin.

Yes, you missed a simple thing. When you hide your fiat money, it is illegal too.
So there is hardly any fact to mention bitcoin hiding as "illegal" and other money as "ok".
When government regulate bitcoin, it makes bitcoin equivalent to money and there is hardly any difference lies between two. So I don't understand why are you differentiating two.  :-\

Yes you did miss many things if someone stores his bitcoin on an online wallet whenever they send any funds it will be sent from a different address and there is ways the wallet doesn't share information. Now when you send transactions you can use the bitcoin mixing sites which hides this from authorities. The only way is kyc asked in exchanges now for all the past purchases it will be hard to track

Yes it is true that we pay taxes in each country, it is because we are under control of the government through their system of centralization where they can make a by laws about it, while in bitcoin is designed for decentralization that's why each government country can't do anything about it.

On the contrary I think th governments can censor and find details if every Bitcoin transaction and attempt to impose taxes on them because the allow ISPs and telecommunications in each respective country so if they decide to investigate every Bitcoin transaction that passed through their network through deep packet inspection (DPI) I think they can succeed in getting us to succumb and have their way.

If bitcoins are related to taxes, I think I think this is a crazy thing, it would be unreasonable if a country would levy a fine or tax on us bitcoin users.
We all know, bitcoin can not be calculated as a tetep income that allows for the calculation of its taxes!

But they would have to recognize it as a currency first, and in the U.S. they don't. But if they did, what you said holds true I think.

To be perfectly honest though, I would guess that 90% of people who have Bitcoins don't earn enough profit from them for the I.R.S. to care about. When was the last time you heard of a typical McDonald's (example) worker getting audited? They don't, and they don't because they don't make enough to put a blip on that radar.

This is correct, people think that having a bigger government is the way to go, not realizing that a government does not create wealth they are only in charge of trying to distribute it, the problem is the most taxes you pay the fatter the government gets and that means that less money goes to the people that needs it and that only creates an incentive to try to charge even more taxes.

Tax is the lifeblood of the country therefore if we earn we have to pay taxes, now the question is if bitcoin can be tax?
Of course, if the government will create a law we will have to comply with it.

Taxing bitcoin is hard. One can evade tax without the notice of the Government. Simply just have multiple address. Evading tax in bitcoin is really easy, even though its illegal the government has nothing to do with it. Only dumb people can be caught. This is one of the main feature of bitcoin, no one can control over yout earnings  not even the government.

In my country Philippines, we have a coins.ph where you can pay bills there like ( Water bills, load, electricity bills ), everything seems to be going smoothly but these later days, transactions fees are getting high maybe because the central bank in our country is open in regulating cryptocurrencies and they are putting a tax on it. I wonder what will happen in the next months, what I know is like the internet on our country, online wallets will become a hundred peso value with a peso worth of services. Sad.

I don't think reporting and monitoring your Bitcoin address will be a good way. What I mean about that is they don't have a way in which to differentiate what is Bitcoin received from a purchase or Bitcoin received from your friends or family or other non-business purposes. When you look at it this way you will only have more problem with the Taxing department rather than have a good solution at least in my perspective.

Gathering money from taxes is why the only choice for government is to simply legalise Bitcoin usage, include BTC in their legal tax framework.
To do that you don't necessarily want to catch individuals using BTC, but rather tax bitcoin using services instead.
It is always harder for businesses to avoid taxes that looking for random people using bitcoin as a test payment method.

Absolutely, I agreed to what you just mentioned on this thread. Bitcoin can't have tax as long as it is decentralized.
We all knew that once the government are able to control bitcoins, it means bitcoin is no longer decentralize but instead it is centralize already.

In order for the government to take taxes from bitcoin they need to admit it. There should be government bitcoin wallet. It seems to me that they will not do it. For them it is tantamount to defeat. Even the greed for money will not allow them to do it.

Great idea!!!

...... yes you did miss something.

Unlike paypal and bank accounts(although one can own multiple as well they are way more difficult to create than bitcoin addresses), bitcoin addresses are incredibly easy to create. By running a script you can generate hundreds of bitcoin addresses if not more per second if your computer's fast enough.

Bitcoin is impractical for the government to tax. Your thinking only works IF a person is honest enough to only use that address for all his transactions. Now, most wallets will give you multiple addresses to use by default for better privacy. How can the government ever track you down and all your addresses? It's just impractical and expensive to do, it'll take more money to do this than the tax theey collect from ya.

Well even if you report all multiple Bitcoin addresses the government wouldn't easily determine what is taxable or not from the money received from that addresses. Because we all know that there is really no labels if Bitcoin was received as an earning or a remittance from a family or friend which is not considered as income. The problem here is that we can always find solutions for taxing Bitcoin but there will always be a loophole in it not unless the government has full control on a local Bitcoin Wallet provider that it.

As mentioned taxation can be made for every transaction. This is possible only when the government take necessary action on it. But corrupted government will always try to make money out of it. So they always create a solution with holes in it. This will be used by the common people. So taxation is possible only if the user himself realize and pay, else even the government can't do anything.

The last transaction I made from very first (and the one which I use to sign messages) was on 2017-02-27. That is exact 4 months ago, so does that mean I have not used bitcoins in those 4 months?. Probably I might have transacted over millions of dollars in bitcoin so the people who are tracing my primary bitcoin address will never find any information about my transactions. There is a very low number of people who will willfully disclose their bitcoin holdings and taxation would not work effectively in that way.

p.s - I haven't spent millions of dollars, I do not try to evade tax while dealing btc/fiat trades.

But you have know that the bitcoin is decentralized and encrypted data. that means every transaction of bitcoin gets encrypted by SHA 256 and it must be breakable by the goverment. The encrypted transaction has made the privacy is really high.

Government Bitcoin wallet?  Are you actually insane?!  The whole point is to remove their power and give people sovereignty! It's shocking that Bitcoin isn't 100% centralised with people like you around...

In my country there is a stupid limitation that if you earn more money from trading than from a regular job, you must declare those earnings differently than if you just make a few thousands, then you just need to add it to your income and get taxed at the marginal rate (up to 45%).

Since crypto earnings can vary wildly, this makes everything more complicated.

If you use an online wallet, it's 100% likely for it to be tracked, because the wallet can very easily keep logs.  With government regulation, it's inevitable that they would be forced to do so, and without government regulation they're 90% likely to scam you eventually.

Your anonymity is much better off not using an online wallet.

IMHO, it must not be subjected to tax. The spread when buying it from exchanges and selling it for fiat should cover any fee the government wants. Look at it this way, it is still not a stable commodity. It would just be unfair to tax someone who just bought bitcoin and haven't even held it long enough when a crash came.

Sure the government might want more sources of money but they can't rely on bitcoin since it could just dry up in a matter of hours and not recover fast enough for weeks. The government should be content with whatever increase in purchasing power bitcoin grants citizens.

I think the government should not tax income from bitcoins. Much more profitable for the government refers to such income as investment in the economy. It will bring more benefit than the turnover of such amount of money in the shadows.

The same goes for every country, you need to show your bank transactions and all the major insurance bills and your salary slips to file for income tax. Why do you need to mention bitcoin transactions separately? I have been earning bitcoin since last two years and I believe, until and unless I am cashing out my bitcoins, there is no need to show it your income tax department.

I have cashed out my bitcoins few times during the last two years and I have shown a total amount under "Income from other source" every time. This amount is only the amount I have cashed out. The government levied tax on it appropriately and I believe I have done it in a legal way. Until I am cashing out my bitcoins, it is not really an income for me, right?

Disagree paying taxes on your income is a relatively new invention, in the past most of the time you only paid taxes in the case of war or something big like that and for the most part you were left alone by the government, governments need to be kept small, have you wondered why wars got bigger and bigger, that is why because governments got bigger and bigger.

It would be easier for them to just ask you about your total bitcoin holdings. But they will have to do it for all alt coins as well.
Otherwise, people would just hold litecoins instead of bitcoins and avoid the taxman.

well no you can make a near unlimited number of addresses and send your "property" to those a addresses.  not so much with real/land property.

Precisely.
Can government spare bitcoin from tax? We're paying taxes on anything and everything they think that taxable. Why don't they let leave bitcoin alone and solve other issues of the country. The problem with our government is when they smell money they just can't sleep unless they get what they want from the people. Moreover, bitcoin can't be called as income because you're not employed to a company nor this is not a business. So there's no way bitcoin will be taxable.

Don't you think that once government make a law to taxes bitcoin, this law will also cover any other cryptocurrencies? Maybe the government will just consider the amount of LTC you currently own equivalent to BTC just for taxing purpose,or any other way they could try.
Don't underestimate government if it's about the taxes, they'll just take as much as they can from you.

That's true, if government makes a plan then at least for certain time period they'll stick to it. When it comes to cryptocurrency we too have got the chance of making anonymous trading access. So how will they levy taxes if we're just holding in terms of bitcoin or some other altcoins without converting to fiat. In my view if government regulate serious law too, there will be loop holes to stay out of taxation.

Every country has tax collections to their fellow citizens, which means all people under by each nation are requires to give taxes and declare how much they earn annualy. But it bitcoin it can never be happen as long as it is decentralized.

We have KYC at the exchanges, but there is still paxful and lbc and others and while it is a set of regs, it counts on people to fall in line and work in the system.
 

Sure, that is a legal way, but it is impossible to make secure.  That is like telling everyone in the city that has an illegal gun to come out and set them on the ground, most criminals are not intimidated by the legal demands

They will try believe me, a government, any government thinks that you owe them money just because you are living withing their frontiers, that is why many people are leaving countries with heavy taxation since they don’t get what they want and yet they are charged ridiculous tax rates, bitcoin allow us to be out of reach of the confiscatory measures of the state and they do not like it one bit.

This happens with many citizens from different countries hailing to other countries for a better living. There are Countries that get most of the people's earning in the name of tax and now with bitcoin we've got the key to stay away from these issues. Hope if government engage into developing a taxation system sure it'll succeed to certain extent.

Correct, this is happening in Europe where the taxes are awfully high and while the standard of living is ok, the costs associated with it are slowly making people reconsider if they want to keep paying those taxes or even to keep using the euro and be part of the European Union any longer, because while they are able to elect public officials most of the decision no longer come from their governments.

Thanks, Googlebit, was helpful.
Will it work in Korea (I'm planning to go in there in a few month), cause I plan to work in there for quite some time

The easiest way is to limit it to fiat conversion when you buy or sell something and you have to pay for services you will have Vat tax in most cases at least in EU.
Sending to bank is taxable event imo but this always wary about country where are you living.
I bet your IRS is scanning you bank acc and you wont get away with real estate purchase or stuff like that.


it is imposible to tax BTC in 100% maybe direct tax in mining reward :D ?? the easiest way.

But we still pay a sales tax on the item. An item is bought, is recorded as being bought through the tax money it generates, yet is allowed to be bought by something that is not recognized as legal currency.

It's a loophole that shows that regulatory bodies care more about their money than ours.

Be calm, after all the government will not be able to give tax to bitcoin users even the government does not know who the citizens of their country who use bitcoin so it can be taxed. This is because the bitcoin is anonymous. So bitcoins are not suitable to be taxed

There are no access yet the government in putting taxes. Having unknown identity it will be hard for them to determine the transactions in anyways . Its impossible for now maybe those establishments and businesses that accepts bitcoin can have tax since they have legal papers for operation.

I mean... literally everyone is doing something illegal one way or another. People do drugs during the weekends yet the only people that get caught are the dumb ones and the big fishes. If you stay low key and know what you're doing, you can never be caught. Just like you said, you can hide some money under your bed and you will not be caught. The same thing can be done with bitcoins.

People will start hiding their bitcoins on different places like exchanges, trading sites, mixers, gambling sites. But if they are lazy, they are just simply going to not declare the bitcoin addresses. After all, you can create a million of it. One thing that people will surely do is declare a couple of bitcoin addresses and make that seem legit by having a transaction every now and then. It would be doing an illegal stuff but not giving your 100% of doing it. You're going to declare taxes but not all of it. That's what people would do.

Another way to avoid this taxation is by selling your bitcoin by meeting up with another person instead of them sending the money through the banks.

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Yep, you might have found an easy way to put tax on bitcoin but people are smart. "You found an easy way? Well, here's an easy way around."

Bitcoin is not truly anonymous, that is one of the basic mistakes many people make when dealing with bitcoin, they think that no one can track their transactions and that is simply a mistake, you can take steps to make things safer for you and for bitcoin to offer better privacy but if you want to be anonymous when purchasing something then it is better to use monero or a similar coin.

Yeah that explains everything in one shot. Before you could think of paying tax on bitcoin you need to know what is the legal status of bitcoin in your country.

Filing of bitcoin may not needed if it is considered as commodity or asset in your country. It has to fiat currency and to be transacted through your bank by means of real banking system. As long as it is bitcoin form it's not taxable.

I don't want my bitcoin to get taxed, maybe they can put taxed when there's a physical stores accepts bitcoin, through adding fess but not literally on just by obtaining it they will add tax,thats too rush.

They cannot taxed bitcoin literally but the moment you converted it to cash and you gain something from any transaction
as a general rule you have to pay taxes on it. I don't know how because every country has different rules and different implementation.

Your statement was correct, also agreed with you. Earning bitcoin is no fee or charge, or in short tax but once the bitcoin exchange into fiat cash or money and you buy some goods, then it will have tax. We all know that all goods have tax so we considered it as paying tax. Not paying the tax directly to the government but we pay because of buying those goods.

If bitcoin wasn't created, can we afford to buy goods and services with tax? Of course, not! Bitcoin helps people and also the government to collect those taxes.

This will only be happen if the government of the country has the capability to control bitcoin. Which means it become centralize they can tax  it so easily. But if not, of course they can't do such things to deduct any tax of from the bitcoin holder in bitcoin industry.

Does it really gonna happen? I don't see any reason for bitcoin to get taxed. Bitcoin is virtual and it is nit recognised fiat currency. We pay for the money that government circulates to us. Bitcoin is decentralised and it may rise a question that why it may need to taxed.


Also adding to your last one, there won't be any need to give your every bitcoin address, I think it will need different system. May be your wallet details and statement.

It will be really difficult to put tax on our wallets and our bitcoin itself. It can only be possible in the stores or buildings that accepts btc. It can be through transaction fees . But overall the idea will be hard to implement since it's decentralized and having anonymous users.

This will only be happen if bitcoin become centralize but bitcoin was decentralized that's why it cannot have tax ever, this is the reason why the government of each country can't control the bitcoin of each holders in bitcoin community.

No government in the world can not control your bitcoin account. More than that until the government does not recognize bitcoin as currency you do not threaten any responsibility for the fact that you hide your bitcoin account. But if you cash out bitcoin through your Bank account you can be alleged concealment of income because the account you get the national currency, and this income.

Taxing bitcoin is the reverse of its original conception. What government can tax are transactions in trading. South Korea required exchanges there now to do KYC. That means trade profit as in stocks can be taxed in time.

I think that the easiest way to tax bitcoin is to request a record about the transactions in bitcoin for the whole year and just tax it with a fixed percentage so they can easily give their tax payment and i think that it will be applied for the next years if the government will accept bitcoin because they can't just let bitcoin prosper without having a few profits from it.

Here in my country we have to register if we want to have an online wallet that can convert local currency to bitcoin or vice versa. In the registration process we have to submit government issued identification card. So, if the government want to tax the money that we had on our online wallet, it is just very easy. All they had to do is coordinate with the owner of the online wallet to get our identity.

I think there should be some mere taxations over btc transaction. it would make people believe that it is not illegal

The same problem applies to arts. Some people do private selling of painting and do not pay their taxes. I don't see how your proposal could be a solution.

In most countries the information is automatically captured and sent to the goverment by companies so that won´t work in most places. Bitcoin would be considered as a payment, yet not as cash.

Well, it make no sense if the tax department will make a rule of law to report every btc address because in the first place the government will not accept the bitcoin as a mode of payments if this things will be accepted it would easily be made the tax collection of the tax department in a country.

Correct. Most important than knowing the address is knowing the acquisition value of those bitcoins, so in theory the number of bitcoins is less important and the address is quite useless for them.

Its better to have an onlooker or middleman to track transactions and maintain security

Its far better to have a limited taxation because if over taxation occurs then there will be no difference between fiats and btcs

I don't know anything about btc transaction too much because I am a newbie

No amount of taxation or onlookers can provide an economic system without dark trades. So I don't have any reliability on them.

Will,maybe that situation its depend on which country  did you come from because the bitcoin legalization is only controlled by the  nation legalizing the cryptocurrency bussiness,but here in our country our government we could not experience that kind of situation by controlling our transaction in bitcoin,so for us now we are lucky that our government have a concern,for all of bitcoiners,and they did not implement a restriction to join in investing digital currency,even they cannot gain an income tax.

I think by having the transaction accounted by a bank may solve the taxation problem. I think set it to like 10% tax 

To me, I don't think Bitcoin is easily taxable because of its anonymity where your funds are stored in an encrypted wallet that can be controlled by only you.. But can be taxed at the point of spendable for goods and services. Tax payment is actually legit, but not applicable to Bitcoin since its deregulated. I only feel when and where applicable to pay tax on Bitcoin in any form it comes later should be adhered to.

in my country the same tax reporting procedure but can use online access. but in my case the cryptocurrency wallet does not need to be reported. it's just tax free. meaning that cryptocurency has not been touched by taxes because my country still has no rules of crypto use that is very encouraging. here the tax is not too expensive may be more expensive overseas. income tax from crypto work can be said freetax.

I think here in our country, when you exchange Bitcoin to fiat. Tax is automatically deducted when I convert it. I think that happens when I pass it through to M Lhullier.

Definitely saying he is saying the right thing.There is no need for to pay a tax for bitcoin earnings if they didnt recognize bitcoins as a main payment method or one of the main currency in your country.They will only have right to tax you off if you are using a official currency on your country

If the government will ask for taxes from my crypto investment then as long as I'm profitable I will pay for the taxes without hesitation because it's part of the constitution. I'm hoping that here in my country bitcoin will be accepted in paying bills as your country do.

Countries won't ask you to report all the addresses you own. That's stupid and time consuming. People will take advantage of it, report some random address whilst they use some other addresses. If any country has to implement tax on their currency, they would rather put taxes on capital gains for people living in that country, which makes much more sense. Other wise, it would just be a waste of time and money.

That is a fact; there will always be dark trades. Since there has always been dark trades with fiat and it was still easy for some to easily cover their tracks, I wonder why it would be so different for cryptocurrency.

No matter how much the government want to impose certain things related to taxation, or compulsory submission of addresses like the OP said, it will not work easily that way since I can either make use of mixing services anyway or generate new addresses without the government knowing. They had better just stick with regulating exchanges.

Taxes can be avoided but that is very risky. My country is also strict because of the tax payments. Decentralized currency is taxed when transferred to the FIAT. Certain individual must fill a form and take it to the tax regulators because that doesn't go automatically but manually.
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Before the 2 years, Bitcoin tax system has sorted itself in my country. Before, some of the regulators didn't even know what to do when someone reports he has the Bitcoin is the online wallet. We can all try to cheat the system with the centralized or decentralized currencies but in the end, we are only hoping not to get caught. I don't think that is worthy.

You are correct mate because what you have said already happened here in my country where local exchanges were regulated by centrql banks backed by the government. All cryptocurrency funds that we are about to convert into fiat money will automatically be deducted with tax. For me tax is okay because they can only do it once during the convertion of cypto funds into fiat currency and it will also help improve our country's economy because Bitcoin community here is increasing therefore there will be enough tax for it.

Over taxation will make people to even start finding reasons to evade tax. Moreover, if there is a huge taxation of cryptocurrency in my country, and I have a lot of it, I would rather move out of my country to go settle in a place where their taxation is lenient and possibly start a business and help the growth of such a country with the little tax I pay which I am sure a lot of countries will be willing to accept since my own government is so greedy to not know the right thing to do.

In fact, he absolutely missed the part where you can easily generate a different address for every transaction and dropping all your addresses in that case will not really make any sense in that aspect.

It will still be very hard for the government to track down cryptocurrency to cryptocurrency trading activities unless may be the bitcoin protocol itself is now changed to become centralized and since it is all about the community anyway, I do not see this happening.

However the onlooker wants to do it, it would still be an issue. Unless of course, the government decided to make everything centralized and enforce a law that before anyone could make any cryptocurrency transaction, it must be from an public address that has been registered with the government and anyone who ends up going against that will have to face the repercussions. In that way, there could still be a possibility with the fear of the law.

Your idea has got point. I don't think any mistake is present and if there is any, using those holes would claim penalty

Great idea as because now there will be onlookers on the transaction route thereby preventing the misuse of btc ecosystem

I th

That would be a great improvement in the system and world of crypto currencies if it becomes possible for us to monitor them. This way, more and more people are going to invest into crypto coins making them common and reliable. More investors means that more people are going to sue digital currencies in their daily routine. Bitcoin monitoring will also deprive government of any excuse for making it illegal.

If we impose tax on btcs too then what would be the advantage of using btcs over normal fiats

Oh that’s nice, but what if I decide not to give out my addresses to them? What if I just give them a fake address I don’t make use of, do you think they will know? Nope, I don’t think so, they will never know. They will only know when you report to them that you have Bitcoin. And why should you let your government know that you’re making use of Bitcoin?

The whole system is corrupted so how can tax implementation cause the corruption free btc regulations?

With blockchain technology, I am believe bitcoin more transparant, but bitcoin have anonymity system and no one know who own bitcoin wallet. If government want taxes from bitcoin I think they should tax from bitcoin trade and treat bitcoin as commodities. Thats my opinion and maybe I am wrong

do you know that any user can make wallets and any address without restriction, and when they give their address to the government they can avoid taxes by using other address or other wallet? I think this system is still very easy to manipulate, I think it is difficult to implement tax on bitcoin

If they will really want to tax us it could be easy for us.
It's only anonymous if we are transacting and we are using our own wallet where we are the one who knows
the important information, however, the moment you need to exchange it, that will be the time you will have to comply with the KYC policy
which the government will impose.

I doubt the government could impose taxes to all. How do government get our address. The system is decentralized, so how could the government impose taxes to every cryptocurrency transactions? Unless they will make this centralized. Maybe the government can let us pay taxes when our bitcoin will be converted to fiat money.

The taxing for the bitcoin and also for the other crypto will come for sure because the government will be taking advantage of the profit that will be making by the bitcoin user from their country. It will be easy for them to tax us and i agree to what you said because they can just request a report from your profits in cryptocurrency to declare the required tax to be paid.

So it is a test of honesty on your part and doing the right thing. Maybe in your country, you've seen the benefits of the taxes especially to those indigent people. But if most of the taxes is in the wallet of some few, then tax has no meaning for me at all. If bitcoin will be taxed, in our country, it will be so sad. Only so few will be benefited by this.

True for me it is not really a commodity or wealth that need to be taxed,,,it is only a transactions through websites,,tax must be payable if companies,agencies or any stable works required.

...because your employer reported your salary btc address to the tax department, for his own taxes ...  ;-)

Of course by using help from third parties such as local exchanges that you use. they can just ask for tax if you withdraw your bitcoin into local currency, with the help of the exchange. yeah maybe the government won't see bitcoin as a currency, more on commodities

This is the problem, if we do not carry out the ownership of bitcoin then it becomes illegal, while the government itself does not mention the illegal or legal bitcoin, nor do many organizations or companies accept crypto or bitcoin as official payments. because it does not report ownership the bitcoin does become illegal so we can just exchange it into paypal or exchangers that do not require KYC on their site. here from my view the problem is that there are not many services that conform to digital currency payments, so for what we pay taxes while bitcoin itself is rarely used for purchases or services in our government.

Japan has accepted the cryptocurrency payment facility and is reaping the dividends. The US cannot come to a common denominator of what cryptocurrencies are, due to the fact that each state has its own view on this. The UK generally believes that cryptocurrency is a foreign currency. By the way, in France, approved a law allowing the use of specialized funds for investing in cryptocurrency. In the world, there is such a variety of approaches and opinion on the account of cryptocurrencies that everyone has a very long way to determine the correct and uniform principles of taxation of cryptocurrencies. As long as this sector of the economy is currently decentralized in most cases, we have the opportunity to earn good money!

Not sure about that because basically the tax is applied for exchange site but not for its user. the user must fill the form for the personal task and the exchange site will never ask the users to pay the tax. It's the tax for exchange site.
The users have different application and you can see how there was a unique form for the users to report its performance in the cryptocurrency.
In general, the personal tax is different with the exchange site's tax.

Well i wish that crypto and bitcoin should be taxed and but if governments put tax they should always put a tax on profit, and not when hold a crypto because if sell the coin after price drop money are loss and is not fair to pay tax on a loss.

in some countries it has been implemented that cryptocurrencies are part of taxes. in certain countries cryptocurrency is still ignored to become a tax source. so lucky for people who are in a country whose government does not collect taxes from cryptocurrency, so there nothing to hide or commit a crime and against the law by not reporting taxes. I was very lucky in my place cryptocurrencies tax charged where so small and I really didn't mind my cryptocurrency being cut.

yes i did also heard it once and i was shock because i though that crypto is an independent currency and shouldnt be taxed  but those country made it possible  .


its not a crime to not pay tax as long as there is no law for taxing a crypto in your country  but paying tax may have some benefits especially if their government is not corrupt  .


i though tax depends on how high or low your salary was ?  your tax charges is so small because your only a small time worker  .

In my opinion, it would be much easier for exchanges and exchangers to make mandatory tax deductions from operations that exceed a certain amount in cryptocurrency. This, of course, will be difficult, given how many states exist on our planet, but it is not impossible. In general, the general rules will be established, according to which, when conducting transactions worth more than one thousand euros, we will have to go through a KYC check, that is, leave our personal data. In my country, in banks and currency exchange offices, everyone automatically pays the tax fee for currency exchange, and therefore there are no problems with taxes in this area.

That is why regulations in each country require companies that exchange and wallet sites in the territory of the country to conduct KYC for users. The government has not officially taxed the currency, while the KYC only knows that the in and out of crypto is not used for crime. If the government wants to impose a tax on crypto, it means the government accepts crypto as an alternative payment for institutions created by the government.

You're right, government will need to accept crypto in all payment method if they want to put tax on it. but not all government in other country support it because of risk. they dont want people blame them if non-knowledgable people use crypto not in payments only. that's why government didn't take it easy they want to study it first before they take their move to accept crypto and tax it.