Bitcoin and the Tax Issue

[tolega]

http://www.bloomberg.com/news/2014-01-21/bitcoin-becomes-art-as-swedish-taxman-rejects-creative-currency.html


So Skatteverket has decided Bitcoin is an asset and not a currency as previously stated.

Does this mean online Bitcoin businesses do not require to register at finansinspektionen anymore?

[KSV]

hmmm, thats interesting . . . watching this.

*With reference to exchanges and brokers*
Well, they still have us by the balls due to the fact that we hold deposits in SEK in fiduciary capacity (for exchanges) but i guess brokerages are free to enjoy the benefits of not having to invade the privacy of the users at the will of the state.

[Paul Troon]

Under this potential tax treatment, someone using localbitcoins to sell bitcoins would be the equivalent of someone using blocket to sell a car, right?  My understanding is MOMS is charged for profits from sales on blocket only above 50.000 SEK (7,500 USD).  Only if you are a regular seller of something would you need to report to the tax authorities your yearly profit from person-to-person sales, and that profit would be taxed at a 30% rate. 

From Blocket.se:

     Sale of individual items

     If you sell goods on any single occasion, then the possible profit that exceeds SEK 50 000 is taxed at 30%.

     Profit is the difference between your purchase price for the goods and the price you then sell the item for. If you have received or inherited what you sell, it is the previous owner's purchase price you should count on. Do not you know the purchase price can make use of a standard value which is 25% of your selling price.

[tolega]

Under this potential tax treatment, someone using localbitcoins to sell bitcoins would be the equivalent of someone using blocket to sell a car, right?  My understanding is MOMS is charged for profits from sales on blocket only above 50.000 SEK (7,500 USD).  Only if you are a regular seller of something would you need to report to the tax authorities your yearly profit from person-to-person sales, and that profit would be taxed at a 30% rate. 

From Blocket.se:

     Sale of individual items

     If you sell goods on any single occasion, then the possible profit that exceeds SEK 50 000 is taxed at 30%.

     Profit is the difference between your purchase price for the goods and the price you then sell the item for. If you have received or inherited what you sell, it is the previous owner's purchase price you should count on. Do not you know the purchase price can make use of a standard value which is 25% of your selling price.

50,000 SEK in profit from one transaction selling bitcoin is one hell of a transaction.

My initial question concerned the licence with finansispektionen. Previously a sole trader had to pay 10,000 fee plus around 3,000 annually to be registered so he/she could sell bitcoin in other form not being cash to cash.

Now, instead of being a currency Bitcoin is defined as an asset. Does this means finansinspektionen does not oversee Bitcoin/crypto currencies related websites anymore? Or although it is an asset, it is seen as a means of payment, therefore individuals wanting to deal it online still have to register (and pay over 13,000 SEK)?

[thy]

http://www.bloomberg.com/news/2014-01-21/bitcoin-becomes-art-as-swedish-taxman-rejects-creative-currency.html


So Skatteverket has decided Bitcoin is an asset and not a currency as previously stated.

Does this mean online Bitcoin businesses do not require to register at finansinspektionen anymore?

The articel said "Sweden is leaning toward an interpretation of Bitcoin that will allow the nation to charge capital gains taxes on any transactions using the software"

So first nothing is decided yet, skattemyndigheten has refused to ansewer question about if or how bitcoins should be taken up for taxation in Sweden for years so they really have draged out things a very long time and it most likely will have to stay that way.

"view Bitcoins as what we call another asset -- just like art or antiques"
Secondly art and stamps coins and such things has had very special rules for quite some time before they got taxed simular to normal assets in Sweden so the fact that they compare it to art in this early stage of trying to draft up rules for btc really dosen't say anything about how BTC will finally be treated.

But if they finally will decide to see it as an asset and not like an currency your Bitcoin businesses shouldent need to register at finansinspektionen thats the logical consequence of it so if finansinspektionen still demands registration then there is no change in policy yet.

And in the section about miners "Wallin said the question is whether they should be taxed as businesses"
About the mining part the only logical thing if someone would have incomes coming from mining and they decide it should be taxeted would be that people would be allowed to deduct the costs they have for buying the hardware for electricity, cost for the location you rent to have the miners in and so on.

The problem for skattemyndigheten if they actually decide to try to tax profits on BTC is that they would also have to allow people to taxate losses people had in the btcworld to and the way bitcoins is set up they will never be able to find a working system for it without ending up having Sweden loose millions if not billions on it like they did on the way the rules for art was back in the 90's.

So the only logical decition is that the gov will keep things like it is now. No tax on profit and no taxation of losses because there is no way they can make taxation on bitcoins to work and there is no way people would accept to be taxated on profits but not allowed to deduct cost or taxate losses from the btcworld.

[thy]

Under this potential tax treatment, someone using localbitcoins to sell bitcoins would be the equivalent of someone using blocket to sell a car, right?  My understanding is MOMS is charged for profits from sales on blocket only above 50.000 SEK (7,500 USD).  Only if you are a regular seller of something would you need to report to the tax authorities your yearly profit from person-to-person sales, and that profit would be taxed at a 30% rate. 

From Blocket.se:

     Sale of individual items

     If you sell goods on any single occasion, then the possible profit that exceeds SEK 50 000 is taxed at 30%.

     Profit is the difference between your purchase price for the goods and the price you then sell the item for. If you have received or inherited what you sell, it is the previous owner's purchase price you should count on. Do not you know the purchase price can make use of a standard value which is 25% of your selling price.

50,000 SEK in profit from one transaction selling bitcoin is one hell of a transaction.

My initial question concerned the licence with finansispektionen. Previously a sole trader had to pay 10,000 fee plus around 3,000 annually to be registered so he/she could sell bitcoin in other form not being cash to cash.

Now, instead of being a currency Bitcoin is defined as an asset. Does this means finansinspektionen does not oversee Bitcoin/crypto currencies related websites anymore? Or although it is an asset, it is seen as a means of payment, therefore individuals wanting to deal it online still have to register (and pay over 13,000 SEK)?

The 50 000 SEK that blocket mentions is a bit taken out of context it comes from the rules that define the border between a hobby and a business, if you earn more than 50 000 SEK(the equivalent of around 7 700 USD) per year on a hobby(or combined on all your hobbys) it should be treated as a business in tax purpose even if you don't handle it as a business and taxes is 30% on the profit you make but there is nothing that say that you have to make over 50 000 SEK profit on a single occasion(that part blocket made up), 50 000 SEK in profit is the amount that your not allowed to exceed in a year to not tax it as a business.

There is also some exceptions for selling cone and berries like blueberries and such where small amounts is excepted from taxation.

[TheFootMan]

The tax issue is now quite straightforward, just deduct losses from the Tax. In the comment section write: Mark Karpeles send his regard to Norwegian Tax department.