Bitcoin Forum

I wonder if sellers on.Localbitcoins are paying taxes? I know that in many countries Bitcoin is not regulated and in some you are not obliged to pay tax on Bitcoin itself. But are they paying taxes like registered exchange office or maybe for on line job and earning. Are they reporting this income to their relevant authorities? What do you think or maybe do you have first hand experience?

you would if you want a quiet life. there's tons of other jobs too where you could carry on and not pay tax until someone shines a microscope on you and you're screwed.

in America selling on localbitcoins looks like a dangerous business. I get the impression quite a few of them have money transmitter licences now. elsewhere I guess it's a lot more casual.

I am a localbitcoin seller and I do pay my taxes. But sometimes not for all the amounts as its difficult to show the profits and losses there.

I don't think so the sellers from india on localbitcoin pays taxes. As it is really hard for the individual to show the business based on bitcoin. I have also tried asking some couple of banks about how to show the business , profit or loss of bitcoin business.

They said ," I have to register my business first , then I have to show my business turn over . Then I will be able to pay taxes. "

Sellers from India? What are you talking about ? Ofcourse no one will pay taxes claiming its from bitcoin. You should rather be showing it as earnings online which could be anything like trading or just freelancing, or buying/selling. With bitcoin you are likely going to come under the radar unnecessarily.

Do you mean that if I said bank , I am earning bitcoin , I will get in trouble bcoz of income tax department ?

So it seems that many sellers are indeed paying taxes and that avoiding this could be dangerous for them. More problems are probably in those countries that haven't regulated Bitcoin in any way or there are holes in.regulations regarding this type of income. But I think that there are stil also "illegal" sellers.

I had to trade several times in localbitcoins and I don't know that there is a tax if do  a trade at there because I get the full payment without any deduction.

Maybe, Maybe not. I would still not declare transactions to the tax departments involving bitcoin. Usually I show it as a side income from Online work.

So how exactly you declare and describe your activities with bitcoins? Does your local IRS even respect bitcoin as legal currency?
If it is that difficult to show profits and losses while trading on localbitcoins then why bother at all? I doubt bitcoin trading is properly regulated anyway.

actually maybe in localbitcoin they pay taxes but i really don't know because i am not yet buy and sell bitcoin on there. for reporting about their income, its depend from them, if they want they can report, but if not, they will not report but there is i think will get some penalty for abuse the system taxes.

It is not the localbitcoins who takes or collects the tax. You are the one who should report your business and income there to the relevant authority in your country and then pay the tax if that is the law in your country and if you are obliged to do so.

And where your tax is going?and I think that is more than going into the local bitcoins pouch and I don't think will till the government.
And every exchange of cryptocurrencies is not having a valid regulation in government and I can say it's not  regulated in government.

What do you mean ? Taxes is what is paid to the government and not to localbitcoins pouch.  The topic is for sellers paying their taxes and not localbitcoin's taxes.

I presume people will only pay taxes if they use local banks, paypal for money transfers, even then like someone sad, its a bit hard to calculate what you have earned or lost, so you can pay taxes on your profit only

Money transfered over banks or paypal might be a problem, because if they track you, check on you, you must disclose from what source it come, if bitcoin is not regulated then i don`t know how would you alone pay taxes even if you wanted!

I don't think anybody nor sellers buyers of bitcoin in localbitcoins are paying or have to pay tax for doing bitcoin related transaction. Even in regulated countries when you try to cashout bitcoin in fiat, than you need to pay taxes and in countries like mine where even what is bitcoin is not known to our government paying taxes for bitcoin related income is far than reality.

In some country you need to pay, in some others you don't need. If you sell bitcoin for small amount, you could get cash and don't need to pay. If you sell 1k btc or more, the cash is too much, paying tax is a must thing, or police will catch you.

actually if the government just know that you're doing a business and can avoid their taxes,they'll find out the way to taxing you even by using any possible way,it's about money and seems government won't miss out money

yes many of my friends who are big traders usually paid tax to government for thier earning about 5-6$ per month . because there earning ia very high and they earn honesty and also pay tax honestly .

I think they don't pay taxes because there are not rules for sellers paying taxes and they just pay fees trade on localbitcoin. But i think the owner of website pay tax for building service in their country.

Some ethical guys do and some do not . Its all about the ethics of tax payers. If you want to pay please go ahead . I do not believe in government anyways .

half will pay taxes and half other will not pay taxes, its depend of that localbitcoins person. for people that obey the rule, they will be pay the taxes, but for people that really don't care about the taxes, they will not pay the taxes.

i think bitcoin is free of taxes, maybe we only pay taxes when we want to withdraw our bitcoin into fiat and transfer it into our bank account so we must pay the administration fee and its should include taxes.

I also wonder, for those sellers who are actualy paying taxes what data do they report? Just if they convert Bitcoin into fiat and transactions on their bank account or maybe Localbitcoins can provide them some data about their business there? And what if they are registered as a firm, not private person?

How bit coin is free of tax where it is not regulated ? In India,  it is not regulated and allowed by reserve bank to use it as money for transactions. And I am also interested in learning the procedure , how to report or what to report to the income tax department.

To my opinion majority of localbitcoin sellers are not paying taxes because their earning after tax deduction would be very low. There are not so many big time sellers with huge amount of transactions.

I am seller in localbitcoins, I pay taxes but i don't declare it as earning from bitcoin, rather i declare it as payment for service. Because in India laws are somewhat confusing, so i don't want any unnecessary visits from government officials.

For some sales below 5K i don't show them or pay taxes

It is ethical if the country has such a law. Avoid tax is very normal, especially those billionaires, you can't measure a bitcoiner is not ethical if they jist don't pay tax.

Thats not how things work. I doubt everyone is a full time trader. This is not the only earning they have, There are tax brackets and if this is the only earning they have, then they might be paying taxes next to nothing.

I guess every country has regulation about tax on income. Perhaps not specific on bitcoin but sure on income. The person should ell the governement how much he/she owned with bitcoin and then the government will tax it. If you don't you may get a high penalty.

As Bitcoin is decentralized currency , i think Localbitcoins sellers aren't forced to pay taxes from their Bitcoin sales. But i believe they pay regular taxes for their general income and banking accounts.

I think they pay their taxes following the laws of their countries , but as Bitcoin is decentralized they can hide their earnings from selling Bitcoin.

I don't think  Localbitcoins sellers pay taxes individually any people can pay taxes if he got profit from bitcoin and cash out his own currency.well you can call that taxes like capital gain or self employed tax.different country have different rules for tax.

What are you even talking about ? How is decentralization remotely related with paying taxes ?

Once a seller sells bitcoin and earns a profit, all that money goes in his bank, which is then used to calculate a profit. He now has to pay taxes on that profit, as the money is entering the financial system i.e a bank, which does not depend on the bitcoin or the fact that it is decentralized.

No, my Chinese whale friends said bitcoin earning in China is no need to pay tax. But government bans bitcoin, so they have to trade bitcoin privately and secretly.

I doubt they do, and I encourage them to don't do it. That's only by cutting money flows to the banksters that we'll win the battle !

I think depending on how you sell it you might be able to not pay taxes. The thing is that the transactions will show up on your bank account.
You can get a bitcoin debt card to spend the bitcoin instead of transferring to your bank account. You should look at localbitcoins terms though I think it is your responsibility to do taxes.