Bitcoin Forum

If I run a gaming site purely using bitcoin, will I be required to pay taxes?

Taxes on profits from operating the site?  

Certainly there could be differences between jurisdictions but generally for most jurisdictions, yes -- a business would be required to pay taxes on profits regardless of the form the income occurs through.    At a minimum, profits from barter income are one example of this already being addressed:
 - http://www.irs.gov/taxtopics/tc420.html

I think you should definitely pay taxes when sell Bitcoins for fiat or any other "officially recognized" asset (gold, silver, real estate etc).

Short answer: Yes.

Though you should double check gambling laws in your country.

And keeping in mind at some point (in the current Bitcoin economy), it is very likely you will have to convert something into fiat, and declare that.

Tips, keep as much expenditure in Bitcoin as possible. Only change into fiat what you desperately have to. Use shared wallets before converting to fiat.

bitcoin has value so this means it is classed under the gaming legislation. I think any thing of calueyou are running a business to earn is going to be taxable. You will also need to obtain the correct gaming licences in the correct jurisdictions.I have had a senior councler look over this for me.

As I know currently Bitcoin is not recognized in any country as currency or asset (of course legislation will change in the future and at some moment cryptocurrencies will have legal definition).

BTW, I know many online games, operated there in Latvia by "official" companies (incorporated and paying taxes) who offer games of chance in MMORPG for virtual currency (like Linden dollars) without obtaining gambling licence.

I spent $7000. getting this answer from a senior councler. I would like to lie to myself aswell but the governments won't. the information I got on this goes very in depth and exhaust every possible loop hole.

What country are you telling about?

Anyways, you should choose appropriate country before launching gambling site. Locating server in U.S. is not safe, I think everybody knows this even before govt made a crackdown  ;)

that's exactly it bro. I'm in Australia. it all about location.  :)

If you were in a place like the U.A.E. where there is no corporate tax anyway then a gaming site based in bitcoin would not be subject to tax.  Of course the source of your customers (if it could be proven where they came from) might bring up other tax related issues.  I don't think there is a one size fits all answer for this question, it depends on the circumstances.