Bitcoin Forum

The question is in subject, also want to clarify that it will be info product - not real goods or something near it.

Taxation is rarely calculated according to what product / service you are selling but rather to the income you receive.

Only if higher amount, it is the same as you would receive gold instead

And it also depends which country you live in...some countries are having some regulations, some not. Ask in your country's tax office.

So if my "income" will be bitcoins only, and no any fiat money - there is no taxes - am i right?

Whether you need to pay tax depends on the laws where you are.  

If you're in a jurisdiction that treats bitcoin as money, and you would owe taxes if you received money, then yes.

If you're in a jurisdiction that treats bitcoin as a commodity, and you would owe taxes if you sold a commodity at a higher price than you bought it for, and later you sell it for more money than its current value, then yes -- later.

If you're in a jurisdiction that treats *ANYTHING* of value as 'income' and taxes income, then yes.  And maybe even 'yes' again later when you sell it, if you sell it for more than its current value.

If you're in a jurisdiction that doesn't really know what the hell bitcoin is yet, then maybe.  And 'maybe' is really the worst possible answer.  It means somebody can decide well after you do whatever you're going to do, that you were wrong and should have done something else and now owe a fine.

No, you are wrong. Receiving bitcoins should be treated as any other receipt of goods. Record the current value of the bitcoins you received as part of your income. If you later sell those bitcoins for more money than they were worth today then the difference is recorded as investment income. If you sell the bitcoins for less than you recorded their worth today, then the difference is counted as investment loss. Careful recordkeeping is important.

If you bought the Bitcoins yourselves then no. But if you earned the Bitcoins for providing services then definitively.

I have no idea how to pay tax in bitcoins in my country )) Or maybe i must do it according to current rate BTC\USD ?

To state it simple: not if you receive bitcoins, but you have to pay income tax when you convert your bitcoins to cash (above a certain amount, differs per country)

If you figure it out, don't tell your legislators, or they'll "fix" it.

No nation accepts taxes in any form other than the official currency that they print.

The trick is how do you live off of bitcoins without it being a declarable income?

If we start with the assumption that you have bought bitcoins at a low price and when they hit a higher rate you wish to exchange them for goods or services - you have made a profit on you original investment and will be liable for taxation.


If you mined the coins then ( at least in Denmark ) you could theoretically register a business and deduct the cost of mining - equipment, electricity, internet connection, rent for the location of your miners and the hourly wage you pay yourself for upkeep of your activities - when calculating your tax.

The tax your are then liable for is your income ( hourly wage ) and any profit after deductions.


But then comes the grey area. The tax department in denmark do not understand ( legally ) how mining is done and how coins are generated. So the official line is that bitcoin income / profit is taxed as if it were a stock / share / commodity.

So don't sell your bitcoins and you don't pay tax... 

I believe when you mine Bitcoins you pay income tax only when you exchange to money. Imagine you woud pay tax from mined Bitcoins only to find later you lost your wallet

Eeek!

I'd never recommend someone pay tax. But from a more legal perspective, I think in general tax comes into play when government currency is transferred.   

What country are you from OP?
That should make it easy to help you out.
 :)

Better than doing something wrong, use tax accountant service so you know you pay necessary taxes and without problems in future

Tax - a legalised extortion, racket, looting and robbery!

best not to seek tax advice on a forum.... ;)

So if I get it right there is no need to pay tax if I transfer small amounts of money from exchange to my bank account? I'm guessing if that country in EU for example, sends a report about the transfer to receiving country...TAX SUX  ;D

Such instrument as Bitcoin (Liberty Reserve also) appeared in this world because millions of people won't being robbed by government taxes. So, what is the question?

Dont worry about not taxing small amounts of money, like $500 yearly. But every country has different value yearly you dont need to tax

absolutely wrong!


the amount doesn't matter - it is the amount of profit you have earned.

Best tip cash out in person if you can and not in the country you reside in, remembering to keep the amount under what you can legally carry into the country.

BUT this year I got stopped in both directions in the UK carrying £4500. Money I had already paid tax on. This happened at the bureau de change who helpfully involved customs - even though the amount was below what I can legally transfer on my person between the UK and Denmark!

I had to firstly demonstrate it was my money and secondly where the money originated from, had to declare my intention for the money. Almost missed my plane on the way out.

Thats a lie, the most richest people don't pay the taxes at all (or they should become beggars immediately), so other normal people are robbed by their own governments "taxes" and should hide their money transactions.

What  a hassle, I dont know if I could cross borders with cash the thought of it makes me nervous as hell, I would spill spaghetti when asked about the who what where of it all.

I had not foreseen any problems as I was below the £10,000 declare limit - next time I'm taking the fee and exchanging the currency in my bank.

I believe there will be more websites, which are selling real goods and services directly in BTC, so banks (and their finance monitoring) will become useless for most people, which don't trust them and also won't be enslaved and robbed by "taxes".

If you would have paid tax if you were paid in cash, you will have to pay tax if you get paid in Bitcoin.

Here in the UK it would fall under normal tax on income over a certain amount.

What happens if you get paid with sex for your work, do you have to tax it and how much the sex is worth in dollars?

Actually, you should pay "taxes" for any kind activities which brings you profit in national currency. Bitcoin is not a national currency, so, there no taxes possible.

Peolple, who pay any "taxes" are responsible for supporting all enslavery in the world.

I dont support governments using taxes to kill brown people and wouldnt recommend you incriminate yourself by filing a tax return, but thats just me, dont take this as financial advice. :)

I feel like this should depend on how much profit you made. If you made 100k or more then possibly. Personally I would be afraid of incriminating myself so I'm not so sure Id report it.