Bitcoin Forum

Most countries are now able to introduce the tax system especially in the GCC countries. As for the cryptocurrencies, I've read an article about the taxation of Bitcoin and Etherium in the New York Times.

Generally taxation is used by the government to increase their funds for the benefit of its constituents. Aren't cryptocurrencies decentralized? Unlike the actual bills and we use as medium for exchange/trading and investment which are all centralized and its circulation is being controlled by the government right?

If the tax system will pursue, is it fair enough seeing that the government is about to invade bitcoin? What are your insights about this?

Here is the link:
https://mobile.nytimes.com/2018/03/21/technology/think-cryptocurrency-is-confusing-try-paying-taxes-on-it.html

In most cases governments are charging taxes in fiat. In order to get charged you need to sell your funds first. All those taxation will continue to seem logical untill cryptocurrencies are used not as a payment method. I don't think that you will get taxed for buying and then selling the same abount of some stablecoins. I also think that  normal people will still be able to sell their cryptos without any problems. I doubt that aby serious tax department will try to charge you for selling 1k$ worth of bitcoin (unless there will be any national exchange with % included) or untill a good volume is passing thru you.
For normal people it is a sign that cryptos are getting more established.

I get your point sir, So does it mean that whenever you invest on some cryptos you will not get taxed right? Only when you sell your funds right? Thanks for the help sir, highly ppreciated.

Maybe your perception of the tax on crypto is different from mine. Fixed taxes must be paid using fiat currency because a tax is a duty to every citizen in the world that is useful to increase the income of his country. There is no single government that provides tax payments to use crypto but there is a crypto is exchanged in advance with the conventional currency so that the amount is real and the exchange results will be taxed because it is considered as your income. May my perception of this tax enlighten you and there may be other opinions about this tax.

I they don't know you have the money, they can't tax it. If you managed to get money into certain address years ago before regulations have been implemented and you haven't touched that since, it's unlikely they'll find it. As for what you keep in exchanges now, they can track that. Thankfully though for now they seem to be content on charging only when you cash out.

Everything is literally not about crtypto. It is about the fiat amount of your cryptocurrency and how much money did you get from it. For example if you buy 100 USDT and then sell 100 USD you didn't get any profit and shouldn't be taxed. But if for example back in 2015 you bought a couple BTC and you cashing it now then you probably would be asked  to pay some money to your big brother because you got the outcome of your investments (and will be charged for the % of it, not the whole amount). Ofc maybe some government will be dumb enough to add extra taxes but imho this taxation will be adequate and mostly affect enterpreneurs and companies.

There is no difference between Crypto currencies and other commodities that are being traded on a open market. When you trade a commodity and you made a profit, you should pay capital gains on that profit. The US see that as trade income and they define Bitcoin as a commodity.

You should just keep good records of all your trades to see if you made a profit or a loss at the end of the financial year. <Some of the regulated exchanges have some reporting options for you, if you want to export that data  to a spreadsheet.>

Yes for normal people cryptos are gettign more established recently i consulted tax auditor where i discussed about bitcoin earning without invcestment like mining trading faucets bounty signature airdrop he dint understand finally i said online earning . Still he is finding way to submit tax .

I think we are still far away from the taxation of crypto currencies. Why do I say this, it is because that we dont have a single committee that is willing to commit and fix the regulation system of crypto currencies. We need to see first how things would be regulated before we can focus on the taxation system that would be put into place.

Actually, people from many countries do not know how the taxation for the bitcoin goes on and how much do we need to pay to our country's government. There is no fixed slab for the taxation in many countries yet but here in India the returns from the bitcoin and other cryptocurrencies are considered under the Capital gains or even as business income and there different scenarios of how the taxes are filed under the different categories which need to be explained in detail and i have attached the Quora link for this purposes have a view on it for more information.

https://www.quora.com/Is-bitcoin-taxable-in-India-How-much-is-the-tax-rate

I think tax of cryptocurrency is normal thing, but that government which that asks for taxes should be legalize cryptocurrency too.
Because that like not balance if government not legalize Cryptocurrency but they ask for taxes.
and if this happen, I think that will bring good effect for cryptocurrency in future, because more peoples will use cryptocurrency. And that will backing crypto price and make it stable, maybe can reach high price.
And about taxes, user of cryptocurrency will not feel awkward to pay tax, because this is profitable both sides, that is User and Goverment.
This is like Win Win Solutions and Win Win solutions is the best solutions in my mind. and I hope the best for cryptocurrency later.

Thank you for your insight sir but could it be possible that trading or buying cryptocurrencies could be taxable? If indeed yes, does it mean that the government already intervenes cryptomarket right?

Thank you sir. I think we got the same point, all the best for bitcoin. Everything will materialized when everybody is well inform and there will be a system that can maximize the benefit of both parties the cryptomarket and the government.

Thank you sir for imparting your opinion also regarding tax on crypto. The more insights I read, the more I understand its purpose. It really is fulfilling considering and sharing what we know for the common good.

since you said you read it in New York times, didn't it already mention that taxes on cryptocurrencies have been in place ever since 2014ish by the IRS and people have been paying their taxes whenever they have bitcoin and other cryptocurrencies and make a profit?
so what is the difference now?

Fair enough sir, I commend your insights. I just hope that the government will find a way to atleast do it on all cryptos. Thank you sir.

Actually sir since I am knew in this forum I am getting the opinions of everyone to become a better crypto user someday. What I understood regarding taxation is far beyond those who are already long time users of it. That is why I am asking for your positive insights.

It is just fair for the government to put taxes on cryptocurrency. Since cryptocurrency has become a business and many have already made a profit then it is a just decision to place taxes on cryptocurrency. Crypto assets are now considered to be like virtual property assets and could be subjected to taxation. The lesser your crypto holding the lesser the tax and the higher your holdings the lesser the tax. But let us not worry since the only way the government could tax us is the moment we withdraw our coin at the legal exchanges.

I think we got the same point sir, What I understood is that whenever a government body shall enforce laws on taxation of trading bitcoin it simply means that the government intrudes bitcoin. Thanks sir.

Thank you sir for your insights. Personally I am still learning much of bitcoin especially those factors that goes along with it like taxation. I am an Auditor, so it augments further my knowledge. Thank you for the enlightenment.

Yes that's right but I believe that once the government knew that you are into crpytocurrency industry, they will have an eye on to see if you are not violating any law such as tax evasion.

That is going to be a hide and seek situation for most of us lol. They may finds some reason to search your house which is going to be scary than just collecting tax to us. They may accuse one of us to be funding terrorist and that who ever you transact with in the past have been involved. This is why regulation is a lot complex than just taxing exchanges.

If they intend to they might tied a certain btc address alone that each can use and you can't change.

On our country, the government are currently studying the cryptocurrency and how they can tax are income from it. I think it for the best, because I think if this happens, they will allow us to transact more using this cryptocurrency.

Taxation means that digital encryption money is legal and protected by law!

When digital cryptography is stolen or defrauded, it will be a new problem for government departments to protect it.

Bitcoin is a virtual currency that uses cryptographic encryption system to facilitate secure transfers and storage.Bitcoins are generated by what is called mining a process wherein high-powered computers, on a distributed network on a distributed network, use an open source mathematical formula to produce bitcoins.Bitcoins can be used like a fiat world currency to buy goods and services. Around the world, tax authorities have tried to bring forth regulations on bitcoins. No matter what happens the Global world would stand together to introduce tax on Bitcoin.

Given to this situation, it really is possible in the long run right sir?  What destroys the image of bitcoin to the government however is the occurence of terrorism which for me I think is pure coincidence.

I think it's really hard to implement it.
Because they won't know anyone who has the address and cannot track it because it's decentralized

If you guys do not want to find the taxation for using crypto currencies you all need to boycott the RIPPLE from using it. This shit alone getting too much contracts and project tie up with the various banks in this world.
This itself make you understand what actually they are from bro.
If this taken strictly against the Ripple and the other shit crypto currencies you will not find the taxation on cryptos.

If you are holding your coins as investment, you won’t be taxed. Coins will be treated as capital asset, like other stock or bond. But if you buy any commodity using BTC, Paying someone or getting paid in BTC, you will be taxed.

i personally don't agree with the tax applied on the cryptocurrency.
If they taxed our cryptocurrency as well, what will they use the tax for ?
Support the cryptocurrency? i guess not.

I agree with this. Actually, they don’t know our transactions in cryptocurrency. The only thing they know is when you exchange it into fiat currency. I believe this is where taxation comes in as we are also charge with some amount in our exchange. as the exchanging company of fiat are being taxed, in one way we tax through them. Because if we will be taxed individually the question is who will tax us? Our own country? How? This might create more problem since we differ in countries. Not unless we only have one world system and governance with one cryptocurrency.

It depends on which country you live in, but i would think that it is ok to keep trading until you convert them into fiat. At that point you will be taxed on how much you gained from when you entered the market. When it becomes legal tender to buy and sell products then we have a completely different ball game.