Bitcoin Forum

So when BTC reaches an astronomical value and one wants to withdraw a portion to have some pocket cash... How to do it? Which country is best in terms of not getting a huge tax? Would you take the amount you want straight away or little by little? Sell it in some other way?

Useit to buy products and services directly or buy gift cards. = no tax

Denmark is the place it seems: http://www.coindesk.com/denmark-declares-bitcoin-trades-tax-free/ (http://www.coindesk.com/denmark-declares-bitcoin-trades-tax-free/)

This is certainly good to know, thanks! :)

Hmm what should we do... Move to Denmark? Or should everybody marry a Danish chick? :D

Well, in all honesty i cannot imagine a European country not taxing bitcoin to hell ones it goes to the moon. This tax-free heaven might just be a temporary thing while bitcoin is still in its infancy. Also, it seems like you have to pay 25% vat on everything you buy if you live in Denmark, so, yeah...

The best thing you can do is to keep your eyes open and read international related news regarding bitcoin.

by that time btc should be used directly to buy things, you will not need to convert them ever again

Fair warning that Denmark will almost certainly not keep bitcoin gains taxfree for very long. Maybe a few years. They simply do not comprehend how big this has the potential to be, and they will find excuses to tax people who make big gains on it in any case. A country that has the highest taxes in the world and even taxes the wind and the sun can not be trusted. Best to keep a low profile.

There are already money changers in Kenya that take bitcoins.

Turning bitcoins into local fiat currency WILL NOT be a problem in the future.

Besides:

http://media.coindesk.com/2014/03/BjP4akHCIAIaqcy.jpg

The problem with spending bitcoin directly is that it is trackable. If you leave any kind of digital trace to your coins you will be found and taxed - and most of us do. Anonymous wallets with conversion to fiat is necessary to stay taxfree.

It would be nice if you could trade your bitcoin in for precious medals, at least until bitcoin becomes more stable in value (if it ever reaches that point). more than taxes, I worry that withdrawing to a bank account will cause regulatory issues that could lead to having the account frozen and funds seized if some beauracratic bean counter deems it sufficiently "suspicious".

you can create paper wallets with offline computers, load them with bitcoins through mixed coins (which are nearly impossible to track), and sell them for paper dollars on the street.

Good luck tracking that.

How do I know you don't have a copy? Maybe you are ready to move the coins after I pay you for them. It's a start, but not enough. We need digital security. It can be done now, but it is kind of prohibitive.

Germany treats btc as a commodity so tax free beyond holding of 1 year
Not sure how long it will stay this way though

When 1 BTC = loads, BTC will be 'the money'.

Bitcoin won't be the currency. It already takes too long to use. Bitcoin would be like a gold bar. Sure, it is valuable, but it is not convenient to pay for every day necessities. You need other, "lighter" cryptocurrencies for that.

Not this shit again. Bitcoin payments happen at the speed of the internet. Go actually buy something with it and see for yourself.

Yes, sending money on bitcoin is very fast. Making sure that the transaction is legitimate can take a fair bit of time, however.

you can make small montly cash outs, small enough to don't attract attention.


you can sell directly to local buyers for cash or something.

buy services and things you otherwise would buy with fiat with btc, if possible, and have more spare cash.

use bitcoin mixers to cut the link to your coins for you

buy drugs on Silk Road then resell for cash to your friends


depends if you want stay under or out the law(and how out are you willing to be)

trackable? you know only the position of the one sending the coin, you can't know who send them, i can just use a mobile device, send coins and then move to another location


sending them is very fast, the pain in the ass is waiting for some confirmations, because there other attack type beside 51%

I don't think my wife would go for that...

10 minutes is not "a fair bit of time", it is 10 minutes. And it only applies to large purchases. How ADHD are you?

Fiat had to enter the system somehow. If you bought on an exchange they know exactly how much money you sent to it and can estimate how many coins you have based on the date. They don't need to be 100% correct, and actually prefer not to be because they would rather tax a high estimate that the actual value.

Or you could use localbitcoins, but that leaves a trail to your email and ISP. And a phone is the most public of devices to use.

how about i just mine and dump them to friends? it's not that easy as you think, anyway my argument was about buying directly in btc, so no dumping on fiat or others thing like that, combine this plus future completely anonymous bitcoin, and they will not be able to track shit

If bitcoin reaches $10,000 or higher over the next couple years, selling locally would become impractical. I wouldn't be keen on meeting strangers all the time to swap cash, it seems like a good way to get robbed, or perhaps even charged with crimes such as "unlicensed currency broker" or similar like those guys in Florida.

What I'd like to know is, if you trigger a CTR or SAR report by a bank for a large deposit from a bank (say... $10,000+ in the course of a week or so) would they freeze your account? I'm sure they'll call you up and ask you to answer some question to comply with these regulations, but is "I invested in bitcoins and I'm cashing out. Here's an audit record of my purchases/sells" grounds to have your account frozen due to legal grey areas? That's what worries me. Not bullshit like, 'when bitcoin becomes big, it will be used for everything, so you don't need to worry about that!' because I don't think that will ever happen.. or at least not for a long, long time.

You will not pay any tax buying products and services directly

Forget about Denmark or Germany, unless you go live there. Taxes are collected on the country you reside.

People on small countries might have problems buying groceries, etc., with bitcoins, but can always sell some on exchanges and use anonymous debit cards to buy things.

If it truly goes that high merchants will be clamoring to get it and acceptance will grow with it. The time will come that fiat will be harder to spend than crypto in my opinion.

If you are a US citizen you don't have a choice of tax jurisdiction (even if you move) unless you renounce your citizenship.

In the end, avoiding taxes is risky and demands one of two another risky things:
1) to hold bitcoins and risk going thru the cyclical drastic bear markets;
2) or exchange to fiat and risk to trust an exchange to keep your money, since withdrawing to a bank might mean troubles with fiscal authorities.

Just leave it, a little bit out, do not accumulate too much, then you're the lamb to be slaughtered

Zero taxes in Slovenia for any trading/capital gains with bitcoins. Only mining is taxed, but only if you're stupid enough to willingly admit you mined them.

How the exchange process to my bank goes?
do someone specific need to transfer to my bank the value?
or some exchange company that takes fee for the process? and if there is, how much they taking?

There in China I was told that the road is getting narrow

Why not just using it as money instead of trading it ,I mean if it hits the 1k or 10k the news will be all over the internet and that will make it more popular and accepted in more stores

I don't think any of the governments will make any bigger tax income on bitcoin. At least not in the sens that they would tax people selling their coins. My government  today, the Swedish, says that bitcoin sells will be taxed if they were bought at a lower prices.

Then the profit would be taxed at 20%.

If however one makes a lose then that lose could be used to pay less taxes.

The problem is that none of the exchanges report bitcoin trades to the local IRS.

So if one want to tax for his earnings it's up to him or her. And of course no one would like to do that. So no one will. They could tax stores making sells in BTC and they already do in the same way they tax fiat.

They could also tax employers getting payed in BTC.

The major part of exchanges accept withdraws by wire transfer to a bank. But usually they require that you verify your account by sending personal documents. You can use Bitfinex or Bitstamp.

If in Europe you could go with one of the exchanges that does SEPA, like kraken or safello. SEPA is much quicker and cheaper than bank transfer.

Problem is that currently almost all merchants who accept bitcoin staunchly refuse to actually hold onto it and rather have it processed instantly by a service like bit pay. Bit pay sells the coin immediately on an exchange which actually drives the price down.

more people entering the game will balance it, and sooner or later btc will be recognized as a reserve asset and will be hold too.


And what is SEPA?

Single Euro Payments Area, a system of wire transfers between european banks: free and fast (24h-48h on working days)

What is good today will not be good tomorrow. Giving an educated guess now is plausible but that bridge will have to be crossed when and if a huge value hike happens

Actually, Bitpay allows you to specify the percentage to be held in bitcoin.  Coinbase too, I believe.

Even so, as more merchants adopt bitcoin, more consumers will have to buy bitcoins to pay for things. That introduces them to bitcoin and many will keep bitcoins thinking of future purchases and for investing purposes.

Usually, people adopts a payment system precisely to buy things. 

no, just buy danish bitcoins & you´re fine.
  ;)

edit:
in germany gains on btc are tax-free when you hold them more than 1 year.

would be nice if one person who has actually dealt with this in real life (bought 50k bitcoin in 2010), or one person who is truly ready for this to happen and doesn't want to flee the country, renounce citizenship or sell gift cards for 10 years would actually comment on this.

it is an entirely real scenario that in 18 months bitcoin is worth 25k each. Even at that price, I don't want to use an exchange to get my fiat as I simply don't trust them.

1. I am ready to deal with tax consequences, that is not a battle i want to waste any of my energy on.
2. I don't believe that in 18 months we will have reached a matrix state and I can pay my mortgage with bitcoin
3. I may need to sell Bitcoin and I don't trust any current exchanges.

So how do i do it without getting killed?

There is no reason to don't trust a big exchange, like Bitstamp, Bitfinex or Btc-e, for a fast trade and withdraw.
They are big exchanges, that earn a lot on fees. Scamming would be absurd, they are already making a lot of money. Even if their hot wallets get hacked, they have enough money to keep going on.
Or you can use localbitcoins with some trustworthy trader.

What I worry is not even not trusting the exchanges. Is being tracked by the tax office.

Because face it, even if there is a bubble that reaches 10000 quite soon, it might be long before this is the "normal" price, and way before you can live off bitcoin only.

One solution I've been thinking about is gold. Maybe it already exists, maybe it will be created soon, but I guess there will be a way to buy gold with btc.
Then sell the gold for cash...

Hope we all have to worry about it very soon ;D