Bitcoin Forum

The ministry of finance has declared that bitcoin transactions will not be taxed!
Instead, Germany will regard bitcoin as the equivalent to legal tender for tax purposes when used as a means of payment, according to a new document.

For tax purposes, this means that converting bitcoin into a fiat currency or vice versa is "a taxable miscellaneous benefit." When a buyer of goods pays with bitcoin, an article of the EU's VAT Directive will be applied to the price of bitcoin at the time of the transaction, as documented by the seller, according to the document.

Even now we don't need to pay any taxes to the crypto to crypto transaction because it is anonymous and no one knows that we are using it.But the problem is when we convert our bitcoin or other crypto into fiat it will be recorded in our bank then we need to pay taxes.So it means still taxable right from your statement.

That's a good news, It is OK if you pay tax when you convert it at least it's only once, unlike what other government wants, that they wanted to tax all the transaction made by there people.

Just wonder what will they do once people start to use bitcoin at mass level. It is good that it is not taxable but this really could hurt them in the long run or they will have to add another sources of income in future. Now it is still used in small quantities and this is why I do think it doesn't matter for them to try to tax it at this point, although it is nice to see that from this view Germany is making crypto "legal" if we take the info that they are not taxing which means you can buy stuff with it.

Seems like a good news, I wish the French government would do the same. It's great because it encourages Germans to use bitcoin for purchasing goods and services instead of just trading and then turning the BTC back to fiat. Increasing adoption is always good, even though many people will still hold on to their bitcoin because they expect it to go back to ATH by the summer.

Mostly in any countries happened this one, like in our country the P2P transactions with any crypto will be tax free but once its converted to fiat using our local exchanges which are registered and licensed with the central bank then tax will be covered. But it will be nice if more countries will adapt like what germany and philippines do.

So it's like they are still tracking the transactions and getting Vat Out of it. I think that's kind of tax only. It's just that they are getting it as if bitcoin is considered as product or service. Anyway it is somewhat good news I believe because German government is declaring the legal use of bitcoin and you dont have to worry about the bans and shit. In various countries there is no tax at all because the regulations are not in line and financial systems have no problems with the whole idea of earnings. It really varies according to nation to nation.

I think they lessen the tax for every transaction. As reading her statement they might have a tax before for every crypto transaction they had. Now the tax that they are paying is just the cash-in and cash-out of bitcoin. This is likely how in our country cash in and cash out, but not taxable on the government, but fee for the service of the system we had used.

This is a common sense approach. It is impossible to tax bitcoin unless it is converted into legal tender and used as such. There is so much fluctuation in price that you can be both over and under taxed in a short period of time.

But why would they have no tax applied, they could at least try to get history of purchases from merchants and thus charge tax in fiat if not in USD. It is hard for me to believe that they will simply say there is not tax for bitcoin as by doing this they might start faster adoption and by doing this there is no benefit to them in terms of putting more money into their pockets. Country as a whole needs to function and most of it's activities are paid by taxes either way they will have to raise taxes eventually for living when bitcoin becomes more adopted if they don't want to tax goods now. There must be some trade-offs.

Can you give us the news source because most countries consider their currency to be the only legal tender?
Does this mean that they will not consider the Bitcoin as a commodity?"Because of the rise in the price of the Bitcoin "from 100$ to 10,000$", some countries are considered a taxable commodity"

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This will not change much in the equation but it is good to hear such news.

read again!
it is not crypto to crypto transactions that the news is talking about it is crypto to goods. for example if you buy a phone or a camera or a car or a cup of coffee with bitcoin, you don't have to pay any additional taxes.

this will create a huge incentive for merchants to adopt bitcoin. and if you like to know the effects of it, look at Japan and last year's growth in number of merchants (lots of offline stores) in Japan accepting bitcoin.

They are very lucky to have a government that way of thinking more advanced after japan and dutch. I hope that what the German finance minister will do will be followed by the finance minister in another country come out as a brave don't be a coward  and just play in behind the scenes by spreading FUD.

Those are very good news indeed for two reasons. Finally we see some relevant European countries taking a stance towards bitcoin in terms of regulation, because until now it wasn't clear what they were planning to do. Second, the measure taken, is much better than the one adopted by the United States so far, that want to charge bitcoin as property, resulting in massive taxes.

This seems straight forward, You have to pay VAT when paying with BTC, this is tax on every transaction as in case of fiat, isnt it?

In any case , it is the same as yu pay VAt when converting to FIAt, the total is the same ( if we assume the BTC price does not change).

OP, it would've better great if you posted a link so that other people can read the article:  https://www.coindesk.com/germany-considers-crypto-legal-equivalent-to-fiat-for-tax-purposes/

This news could create a snowball effect in europe (it's Germany after all, not some small and irrelevant country) so it's a matter of time until other countries adopt the same policy around Bitcoin. Honestly though, we've been getting a lot of positive news about cryptocurrencies, so it's getting hard not to be bullish about Bitcoin everytime a news article gets published.

Don't know why we are celebrating this to be honest. When I first read it I thought it meant anything under certain price wouldn't be subject to capital gains tax, but after I read it properly it just means we won't get extra taxed. Why are we celebrating not getting extra taxed!? That should be the norm, we shouldn't be celebrating something like that. If we do, it just goes to show them how much farther they can push us back imho.

I totally agree, I’ve seen quite a few people posting news recently without quoting the source. I also agree that it is great news this is done by Germany, I hope some other countries follow the example.


I am celebrating this because politicians in my country are specialists in multiple taxing people, it is the only country where they tax people for just holding bitcoin. If politicians in my country copy Germany’s measure and I avoid extra taxing I will celebrate it as a miracle.

Let's be clear that this rule likely only applies to German citizens. Germany can't make tax policy that would apply to the world and most tax obligations are driven by your Country of residence or citizenship.

I wonder if this move by Germany could influence tax treatment in countries throughout the European Union?

Can you share your source for this news?

I don't understand why this document is seen as some spectacular good news. It's the same policy Germany and most states of the world follow for years.

It's only talking about VAT (not capital gains tax or similar). VAT normally is charged only once in the process from the production of a good or service to the final consumption. An example: If you buy a car, then the manufacturers don't have to pay VAT to their suppliers. The person that must pay VAT is the final consumer.

So if you buy a car with Bitcoin in Germany, you must pay VAT - but only once. According to this guidance you won't get taxed twice because you use Bitcoin, and you won't get taxed when you buy Bitcoin (for fiat) to buy the car.

There were some countries that considered VAT for commercial Bitcoin sellers (some years ago there was also a legal dispute in Germany, but it touched only very big traders that were registered as companies, until the EU court decision ended it) but it's the absolute minority.

Maybe the document is more relevant for miners, because it clarifies that they must never pay VAT.

BTW: the original document is here (http://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Steuerarten/Umsatzsteuer/Umsatzsteuer-Anwendungserlass/2018-02-27-umsatzsteuerliche-behandlung-von-bitcoin-und-anderen-sog-virtuellen-waehrungen.pdf).

great news, time to move team to Germany     8)

thatš very interesting news, thank you for sharing it. Wondering how it develope in whole EU.

It may look like good news from the most important country in Europe. Most countries will not ban cryptocurrencies, but they want regulations. The main reason is taxes. Germany will only charge VAT on regular small transactions, but I'm not so sure about that. Holding large amounts of cryptocurrencies will be seen as speculation and then you'll be taxed on your profits. In some countries that could be 50%. After the G20 discussion on cryptocurrencies we'll know a bit more.

Sad.
I have to go to Germany just to do that kind of transaction.  :'(
I hope this goes worldwide as I am expecting to try and buy something with bitcoin and not just other crypto currencies and ICO.
Something that can be physically feel and be seen with my own eyes.
Does this companies do shipping?  ;D

Super good news! Positive signals came from Austria about a week ago, and now from Germany - bravo!
This week forms such a positive crypto background!
Green market soon?  ::)

I agree with you. Governments are still seeing what to do with it. The ones not too corrupt are still finding ways to come up with legislations that can benefit the country. Since it's a new technology in comparison and seeing Bitcoin as a trustable currency worldwide is even more new. It will take time to see how people behave with it.

Later in time they will have to seriously think if they will tax it when a lot of people use it and a lot of countries start doing it. It's a nice stand to start though, from my point of view.

I applaud the government of Germany for taking the initiative and supporting Bitcoin during this stage.

hoping this will happen in our country they using 10$ or more as a transaction fee or tax. for me its not fair to make that kinda big transaction fee because we dont have enought money to shoulder that big transaction fee.

So its tax free if you use bitcoin for purchase in germany, and that's sounds good for btc, it seems they encourage the German to use bitcoin and by these means they are trying to use bitcoin as regular currency, and this might come up to have a better regulation for btc as real money.

I strongly agree to buy something with bitcoin not in taxes because all transactions on bitcoin like sell bitcoin, buy bitcoin and exchange bitcoin into real money is always in charge. so if you buy something also in taxes I think we cost too much from any transaction with bitcoin, things like this can cause bitcoin prices to fall because the bitcoin users are getting reduced.

Germanies Taxation Burocracy is never able to handle Bitcoin its slow speed and high tx costs.

i bet they are doing that because they have no choice.

So if we use only crypto they can tax us only when we finally do the exit crypto transaction to us (cash out with crypto, not fiat). If I pay for the car or apples they just simply add the tax on those items and that's it. But there would be no tax on my yearly income. They can't trace my net worth.

Certainly every country has its own rules of regulation in regards to bitcoin it depends on the country's policy, if in my country bitcoin transactions are not taxed, it is very good and profitable for bitcoin users in my country.

Yes, In the most of countries bitcoin transaction is not taxed because they have not officially accept bitcoin.
It is really weird that a government officially announce that they don't want bitcoin.

It really nice to hear that Germany started to use bitcoin with out tax. I believed if this will happen all over the world the price of bitcoin will rise and more people want to use bitcoin as payment rather than using Fiat


#Datarius

Because news sources create a buzz about that. They have to find everyday new story to put out there for other people to find their website interesting and to come back to it often. This is not the first and certainly last news/post that we are going to see popup that it is not that much meaningful for huge hype to be created around it and create some talk moments about certain topic.

Although when you have something like this at some low levels it shows that countries are interested in crypto which is a plus and thus a good thing, no matter if they are applying this in practice but this time "they said it publicly".

This is really very confusing and can be abused in  a number of ways:

1) Suppose we have a friend who does not fall under the tax bracket or say has no earnings at all. One can just transfer his bitcoins to his wallet and then he can withdrawn to his bank. Then give him some commissions and spend that cash. No need to pay any tax on that bitcoin profit.

2) If you are earning huge amount of money, you will need a number of friends to replicate the above process.

One suggestion is to choose those friends wisely as they may run away with the whole money transferred.

Yep.  ::)

Here I agree. There was a discussion in 2014 if VAT could be applied to Bitcoin purchases from commercial sellers (like if it was play money), even if it was against German law (you never shall be taxed twice) and one German tax office in the city of Bonn some months ago wanted to tax a trader because they had a very unfriendly attitude regarding cryptocurrencies. This was clearly illegal, but the trader would have to go to court to clarify that ...

Now we have an official document, and this kind of bureaucratic abuse isn't possible anymore. So it's good news without doubt - but many posters of this thread think it's spectacular news, and it isn't.

That's not what the document is about. It's about VAT, not capital gains tax or income tax.


Again, that's not what the document is about. Here you refer to income tax. The method you describe, almost for sure, is illegal because your intention is to evade taxes. If you do that several times or for big amounts, it's almost sure that they'll catch you.

This will be a very good start for the bitcoin's mass adoption. If merchants will start to accept bitcoin (at least some of them) the others have to join in order to preserve their market share. If a merchant will accept bitcoin soon enough, it's name (the name of the shop) will be a well known brand among bitcoin users and this can help the merchant cover a market gap and create some extra profit (the people willing to spend their bitcoins for everyday things in shops or online can be a large new customer base for the merchant).

Anyway, governments cant really apply taxes to bitcoin transactions since they are anonymous. If they are going to do this people are going to sell bitcoin for cash face to face and bitcoin will be seen as a bad thing after that will happen because people are going to sell bitcoin illegally
I dont think this law will remain the same because this way a lot of money can launder money through bitcoin. Also there are a lot people that earn big profits from mining or trading bitcoin and they dont have to pay any taxes. The number of this people is increasing everyday so that governments will lose some money on taxes rhat are not paid.