Bitcoin Forum

guys how to get around local tax laws and convert crypto earnings into legal fiat?

It is the subject matter of your jurisdiction if Bitcoin is not illegal in your country then you can definitely convert your Crypto to fiat currency and paid tax as per the law. In my country, Bitcoin is not illegal but still, it is not even legal too so in such case we have to show our crypto earnings as income from other sources and pay 30% tax on the same. I would recommend you to research the law in your jurisdiction and if possible also consult the legal expert in this case.

In my opinion, Bitcoin/cryptos should not be taxed because we already buy cryptos with our hard-earned money which is already taxed in our respective countries
But some countries are really confused on whether to consider Bitcoin/cryptos as a commodity, currency, or an asset.
There are bitcoin taxes in different countries.(like GST, VAT, Service Tax, CGT (Capital Gains Tax)
Denmark is undoubtedly one of the most friendly Bitcoin/crypto countries in the world.
In Denmark Bitcoin/crypto trades are not taxed, and your capital gains on BTC are tax exempted under the light of this Danish rule.
In Singapore Bitcoin is neither considered a currency nor a commodity.

Tax laws and regulations differ so you will need to be more specific on your location.
Try looking for local CPA that understand how file.
https://bitcoin.tax/cpa is the first site to pop up, but there are plenty of sites now.

This is a new issue really. But I suggest that all crypto investors should pay their taxes. It helps the regulators believe that we all have a future together.

Depends on the country you live in. For example, in Slovenia there's no tax on trading. So if you bought Bitcoin for $500 and sold at $1000, you don't pay any tax. But if you mined those bitcoins then you pay tax. For example, Croatia has fixed 12% on any crypto earnings, which is pretty cool ;)

This is something I have not researched fully in my country (ireland). I have a
vague recollection that I am able to 'earn' a certain amount before having to
pay tax but as for earnings from investments IDK.

The argument that our wages are taxed already and we shouldnt have to pay
further taxes doesnt wash because everything else we buy is taxed also.

To date I have liquidated some crypto out of necessity and not paid tax.
If its small amounts I recon it is safe to declare nothing.

So any person from Slovenia who is interested to mine some bitcoins should make the set up in another country. I noticed a celebrity in a neighboring country doing this and was not able to understand the reason behind it. Later I found that the tax regulations were not strict in that country. He had to set up a company there though for this but that investment is worth it as this is a long term investment. Another problem that he might had to face in his own country was that electricity is not available 24 hours. A generator may be arranged for this but it will be very costly.

Every country and sometime every state has different law regarding bitcoin so my country law would be very different with yours there.
Try to read more news about your country law and try to search the idea to convert bitcoin into fiat after that.

I think there is no such way for us to avoid local taxes imposed for our earnings in bitcoin. Whether Bitcoin is legal or illegal in your country, taxes impose in the country would still prevail on transactions. I think it's either the website or the personal account would shoulder this cost

If by some chance Bitcoin is illegal in your country then you can try getting a Free Payoneer account which includes a Debit card linked to a US bank account.

You can then sell your BTC on an exchange of your choice or even localbitcoin.com and withdraw to your Payoneer account. Your Payoneer debit card can be used at most ATM's around the world

It may not be a perfect solution to avoid paying taxes but it will keep you relatively under the radar in your country UNLESS you are moving large volumes.

I do not even know, an interesting question, just do not declare your income and that you are doing crypto-currencies! Or participate in exchanges where there is no need to verify the identity!

Better try to find a lawyer in your country and ask him these questions. What I can tell you and other people here on forum might be totally irrelevant to your situation because we might live in totally different places on earth and thus different countries. Tax should be paid and it is good to see that you are not trying to evade this by opening some offshore or "laundering" money which you got from your investment. Contact people who should know this outside of this forum such as lawyers. Good luck mate!

Bud try not to go around because we want to comply with laws and not evade them if we want countries to see crypto as something they can regulate at least some part of it. Not chase every human being who possesses some. This is an example why these talks shouldn't be on forum, many people don't understand much things about this world.

In the UK i believe you get around £11,000 tax free profit but any more and you need to pay Capital gains tax

If the government in your country regulates cryptocurrency then you will have no problem in changing your stock to fiat currency. all the while, if cryptocurrency is prohibited in your country, then that's the time you have to go through blockchain to change crypto to fiat for as long as you have the credit cards which accept crypto. You will have to go through some process in exchange to do that though like in coinbase.

Visit bestchange.com and you can find an exchange site but make a comparison in their fee of transaction before
 

Cryptocurrencies are unregulated, with the exception of South Korea, which is backed by the country's exchanges, and exchanges in other countries are unregulated, so there is no tax issue.

I live in Norway and went to ask in the local tax office how it works. The woman working there just looked confused when i tried to explain (she only heard about bitcoin before) and the conversation ended with that she said that basicly dont mention it until you have made more money out of it? But the rules are that it is taxed just like regular shares. My question was if I should pay tax for every transaction when changing between different coins or only when converted into fiat...

actually it's easy to solve this problem. we live to register the results of our income to the taxation agency and register the job as IT or internet marketing. register the amount of monthly income so that we will still pay us even though the actual income through crypto

Maybe the simplest way is to sold coins to someone directy,so you need to find buyer,meet with him and get cash in hand.On this way you will not pay any tax because there is no trace of any transaction.But this way of selling should always be carried out in public place and never take with you more then you agree to sell.

Another way is to buy something with crypto and then sell that for fiat to your friends,relatives-you get cash they get what they want.Although there are not too many sellers who accept crypto,you can find interesting stores just using Google search.

There is also ATMs option,but in this case you have to pay a fairly large fee on your transaction.

Well,This is a new issue really. But I will suggest that all crypto investors should pay their taxes when & where it was needed. It helps the regulators believe that we all have a future together.Not to just for me or myself do it for all.

Let everyone do what they love and know how. Fortunately, blockchain technology is driving various industries to create potential ways to make money. But if you look at the facts, this is just an additional income. I don’t understand why some people do this not as a hobby, but spend all day. Seriously. If you write well, become a paid blogger or journalist. You make a good video, YouTube is looking for people who will be a cool blogger. This is really worth paying attention to. The blockchain system creates a demand for a lot of vacancies.

It's true. I would not have thought that it would be possible to negotiate with customers and support a community with good currency payments if I hadn’t found out about cryptocurrencies. Crypto trading, mining, bounty rewards or for advertising are good then if you already have a more stable source. It is sad when people fully rely on crypto rewards. Coins can always depreciate and you will be left with little profit

I don't think that there is a "get around" for taxes, period. You either pay what's owed of you, or don't, and risk being audited and all of the other consequences that follow such course of actions. To convert your cryptocurrency into fiat, you have to go through a medium, usually in the form of an exchange. Which may require KYC/AML compliance.

And more of the exchange that want to widraw large balance need to make that KYC. I dont think tax will be a problem if the government ask you for your tax then give them the right amount for taxes, if you have enough money to pay why will you be affraid.

It's alright for me to have tax with my crypto earnings too for as long as this if for the benefit of my own country, why not,  for as long as it is reasonable enough and not just like what most of them are implementing that they wanted to earn with our income of 20-30% which for a normal person like me is a big sum of money. So, right now, i am still enjoying the freedom for not obliging to pay tax on my crypto earnings.

It is normal that when you convert your crypto into fiat taxes will get in the way. There's no way you can get around it or else it would be considered illegal. If you want it to be converted into legal fiat, then do your job and just pay the taxes. There are still some other ways but still there are fees, it's just that the value is lower compared to taxes. Whenever you are investing in crypto, you should study already how you can convert it into fiat in a more convenient and low fees way so that you would not lose too much money in the process.

as of now, there is no bitcoin tax law in our country
in my opinion its ok not to report it if your only converting small amount of bitcoin to fiat
but still, ask for some legal advice in your country
because in some country, if you sell some Bitcoin at a profit that you purchased in the last few years
you will have to report short term capital gains on your tax return and pay ordinary income tax rates.

As of now crypto earnings weren't regulated. Very few countries around the globe have compiled laws that enforce the cryptocurrency to legit fiat. Few countries have added the cryptocurrency along with gold. Anyhow there isn't perfect law to be followed, hope cryptocurrency earnings will be regulated as the usage and adoption grows with time.

You can sell your bitcoins for fiat, that way you will get cash without the banks. For sure you have people interested in bitcoin close to you and they could be the ones who will easily pay fiat for the cryptos.

Another way is to use Paypal and change your bitcoins to Paypal in an exchange or in the forum. But this way I don't think you can avoid paying taxes.

In my hometown where I'm living, converting is super easy, I just have to find a local dealer, then all the trading stuff will be executed directly between 2 people.
you'll get money right away when he received the bitcoin.
nothing to do with tax and legal paper. most of local dealer can handle every money amount that under 50k$.
I think yours might be the same, get some local dealer, or online but trusted dealer. good luck.

I keep continue earning with bitcoin and crypto because have easy way to get earning and can start investing with less risk for other investment kind, with crypto we can manage how much profit we want depend with price up, many people like for investing with crypto and get much profit with bitcoin and altcoin very easy to get much profit.

In the future, hopefully you will not need to change bitcoin to fiat

Basically, such transactions are carried out by exchange offices with the help of OTC deal.But before you do this, assess the risks.

Here basically you only pay tax on fiat if you earn over a certain amount so I keep under that amount and buy everything else with bitcoin or other crypto.

 
Even with short term capital gains, it becomes difficult. How do you know what it was worth when bought? Or received? Do you take a recording of the value for a website and screenshot it or what? Or would they look it up? I don't think they know about crypto and will just take your word for it. It's not so easy. There are also many other things to consider. Also, capital gains are not income tax it's taxed differently.

Try joining the cryptotalk signature campaign if you're interested in this topic.  They haven't paid their participants in 6 days and may never.  If you don't get paid, you don't have to worry about taxes.  Or you can just rely on income from ico bounties which also don't pay you anything.  Let the tax officials waste their time trying to figure out how much you didn't earn in the campaign or bounty that didn't pay and what the value of the worthless token or coin was at the time you didn't get paid.

Go yobit for not paying their participants for 6 days!

don't you avoid, you just obey .. !! because it's a regulation that is created by the government ... !!

It is one thing, if you really don't want to avoid paying tax then you can put to your record that you are working online or freelance.
Actually there are still no taxation law saying that crypto users are subject to paying tax. As of now, it is still under the consideration of the government (depends on the country you reside in). If crypto is legal in your country, then sooner or later, paying tax is necessary.

First of you need to know how much your country is asking for a tax on the virtual currency.

You can also tax it after you send to bank or receiving your fiat from the virtual currency.
You should contact your local government instead asking here as it's difference for so many countries that we would have to make a complete page knowledge about them.

The simple solution is: Get your fiat converted from virtual currency -> declare to financial services and pay the tax.

Expect that to happen once the government will impose taxations once the rules for crypto already being ordered. There's no way that you can avoid
as it required by the laws that every individuals who are getting salaries inside the jurisdictions of the government is subjected to pay tax to help
the country, it's an obligations that citizens needs to follow.

When a country imposes a tax on Bitcoin then it might not be a fruitful issue for those people who're dealing with Bitcoin, because when we already pay tax when it turns into any local money so it would be double-counted if the government again impose a tax on Bitcoin, I think it's high time for every country to consider about Bitcoin because blockchain system is being a popular system, not only that but also China has taken an initiative to develop blockchain system within the country for their own purpose. so Bitcoin should be the legal currency around the world and in this way, the crisis will get solved.

of course because why need to convert in Fiat when Bitcoin and other cryptocurrency can be use as payments for everything?
when cashless society comes this problem will never occur again instead the main problem is how to have bitcoin/cryptocurrency than how to get a fiat.

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for OP it depends on your country because in my location it is easy to convert Bitcoin to fiat using only wallet.

It is really expected but it will take a lot of time before it happens. Maybe around 5 years or more if crypto achieves popularity than it never has before. There are consequences you might face if you avoid paying tax, it is also correct that it is every individual's obligation to pay tax since our money is the one that is being used for the development of the country.

The government has seen people make very large sums of fiat buying crypto and selling it at a later date. They want their cut. I think the CGT event on spending is a misguided way of closing the loophole "I didn't sell it for fiat when I bought that $15,000 item directly with BTC that I bought for $150, so no CGT". It also has the bonus effect of reducing the chance BTC will become a widely used Currency and pose any real threat to the government Dollar.

In my country whatever you earn through crypto will fall u need the tax bracket. As soon you convert crypto to fiat you are under the lens of the tax department. I do not know what exactly happens in your country as you never wrote about the country you are referring to.

You forgot to mention the costs. Such as electricity and equipment. and $ 50 is definitely not worth it

I believe that the simple cryptocurrency user who stores his assets for the long term or trades his coins on the cryptocurrency exchange cannot fall under the lens of tax structures.  It seems to me that, first of all, the tax inspectorate should work with cryptocurrency exchanges and cryptocurrency exchangers, which will be taxed.  But in turn, each cryptocurrency exchange will charge interest on the transactions of each trader.  In this way, it is possible to organize the payment of tax for the state from the cryptocurrency market.

There's no doubt. After the cryptocurrencies been added to the constitution of one country you can guarantee that they will impose taxation. Fortunately, we have no law regarding this matter so I can freely spend some of my coins without paying any taxes. Cryptocurrency and blockchain is very promising technology indeed and I have no issue about getting a tax on it because I do believe this will have an impact on the improvement of one place especially on third world countries.

We are earning a lot of money without paying any taxes that is why I think the government wants to regulate or give tax to us crypto traders or bounty hunters but how do they do that if they do not know who are earning, maybe the banks can give taxes but not the government because they do not know who are the group of people organizing cryptocurrency since cryptocurrency are decentralized, meaning there are no people involved managing every transaction we are making.

The problem is that even if your country don't have regulation right now things can change at any time. I'd suggest not to sent much to your bank. There are ATM's as well that might help.
Always use small amounts though. I don't know the standards and the limits each country sets but I guess if you try to sent to your bank 100K bells will start ringing.

In short, you should go to a country that is no hassle in giving you a service you want about crypto currency. You've stated a very obvious matter, of course you should only regulate your crypto in a country that allows it.

Also you should know first the security of the country for you to avoid being hacked or scammed. Security is very important when it comes to crypto currency. Most especially if it has a potential or if you're going to convert it into fiat. Fiat is more vulnerable to negative things.

i dont think you cant escape the tax especially if you are going to convert your cryptos unto fiats but that is if your using an exchanger but i think you can escape the tax and exescive fees if you are only going to trade from person to person   . you will just have to talk to the person and agree if how much crypto they are going to recieve as well as how much money they are going to pay  . this can be done without fees depending on you if you arent really that generous  .

getting around tax laws is really hard. And I have no experience getting around it since, in my country, we are lucky that we are able to use cryptocurrency freely. And as of now, there are no signs of regulations. But they kept on saying warning about how we are going to secure our funds.

If here in my country will gonna put taxes on our earnings in bitcoin then it could be really hard for us, since my earnings here in bounty is not too big for them to give me tax. It is okay to regulize it and legalize it but I wish that there would be a better and good tax rule in every earnings. Even now, we dont have tax yet , everytime I converted my btc to fiat it lessen as big as 10% of it.

Based on our country, you cannot actually get away from taxes in cryptocurrency conversion to fiats. How? Because if you have local exchanges, then that is the place where you need to convert your cryptocurrency. In this case, what you need is to pay transaction fees with taxes from conversions. What is good about it is that, if you have huge accumulation of cryptos, instead of converting, you could transact and pay in crypto without taxes.

If we want to actually use crypto in real world for payments in most cases we need to face the problem of conversion. Thus we lose money on exchange rate, taxes, fees and etc. So far the only or maybe the cheapest solution for me is to use crypto debit card. No need to worry if crypto is accepted, no transactions fees and taxes.

What about peer to peer trades with a person from your country? He gives you cash, you send him Bitcoins. And you keep that cash at home, not deposit it to the bank because you might need to explain origin of money.
But I guess it's difficult to find buyer for large amounts of Bitcoins.

Well really everyone should go to their local tax accountant or look up the information regarding taxes and Bitcoin in their respective countries. In Cyprus, for example, taxes are good for people there because you can bring in your crypto and not pay at all tax as long as it comes from one bank account to another, or to be safe, just pay 10% capital gains tax on it and then you are done. In other countries of course there are more strict laws pertaining to Bitcoin and other altoins. You should be careful and do everything the legal way, not to have problems with law enforcement agencies.

Yes, I agree. We are making tons of money with cryptos and this is the reason why the government would like to put taxes on it but in my country, the taxes paid in converting cryptos to fiat are through wallets and banks where the transaction happens, the government is not involved. It is not that big so I think it's fine to pay taxes through these things, after all, it is our obligation as a citizen in a country.

All depends upon your law of country about digital currency , my first suggestion for you is that if bitcoin is allowed to use openly then do works manually to pay tax that what the law of your country's govt. Made .
Otherwise you have to pay tax by select the category of "other" , your lawyer can tell about it to you in very accurate way .
If you have no lawyer then don't don't take tension , simply google it " how to pay tax "  and then you will understand that how to do all the things .
But be Careful that if you are paying tax for the cryptocurrency earning then pay for all profit , otherwise do deceive the system .

I think your way is the solid and safe transaction to avoid taxes if it will happen in any safe likes own home, not random places because unsafe place is very risky specially for the bigger transaction. I have personal experience regarding these issue, so here i share with you. Trusted buyer find out very difficult.

People who use to use people from local bitcoins might start a smaller group on social media so the people that bought in large amounts still are. Newer people will have a rougher time finding larger trades. 
There is also the matter of safety and you risk being mugged or something. It probably won't happen but there is still that risk.


Yes, we need direct trade to bypass these taxes. Depending on where you live some taxes are unrealistic and far too much. Other countries you feel ok paying tax since you get benefits like free health care and such. Unfortunately, not all countries are like that and often take advantage of the taxpayer.

Right. I admit even in my own country lots of taxpayers are asking where their money goes because the government shows no proofs at all. If you are living in a place where crypto is not yet legalized, then you can find direct buyers for your crypto and get some fiat in return. I suggest to make a good research of merchants in google.

You can sign up for a platform like Paxful or LocalBitcoins and trade with other users.

Paxful and LocalBitcoin has been the best alternative platform for trading my coins with fellow country traders, that had been my route for trading my coins I often used Paxful which had served me well for close to three years now no any issue so far availability of escrow had even made trading safe and scam-free I hope the OP can try this method.

It depends on your country, many countries like China do not allow people to exchange Cryptocurrencies to Fiat money so you will need to convert them into others like paypal or perfectmoney.

It is not difficult if I did not say that it was easy. In fact, bitcoin is banned from trading in my country. But the law always has holes, and we take advantage of it. They do not allow us to "trade", so we use it for "exchange". It is difficult to express it in English. We can understand simply, it is the difference between buying - selling and giving - receiving. In particular, I do not need to pay any income tax from the cryptocurrency. That is a wonderful thing!

It depends on what country you are in. Mostly there are hidden little charges from the converting sites we use. Its part of there business to earn charges. Its really somehow unevitable. But there are many ways to get lesser tax or charges. Convert it into other crypto coins that you see you can get lesser charges before converting in your local fiat.

That's right just for example what others do in order to get lessen tax or charges from their coins or tokens they are converting it into other coin or token in order to lessen the charge into usd. If you really want to maximize your crypto earnings you must know how to handle situation like that so the profit that you are getting will not be lessen or decrease. That's what others do in order to get an very small amount of charge everytime you are converting your crypto earnings into a local fiat. Just for example, converting bitcoin to xrp or ethereum to lessen the charges and then convert it into usd or your local fiat.