Bitcoin and closing tax havens

[NyeFe]

With the breakthrough of Bitcoin, what would be the point of worrying about tax avoidance and evasions? Shouldn't they be scratching their heads on how to tax anonymous bitcoin users?




Related source: http://www.theguardian.com/politics/2015/apr/11/labour-huge-fines-tax-avoiders-election-2015-ed-miliband

[Soros Shorts]

It's not on their radar yet. It will be if Bitcoin gains mass adoption and we need to be prepared for that time.

[GTO911]

Shouldn't they be scratching their heads on how to tax anonymous bitcoin users?

Only a fool believes bitcoin is anonymous. Bitcoin users have all their financial history on the internet for anybody to see

[ashour]

It's not on their radar yet. It will be if Bitcoin gains mass adoption and we need to be prepared for that time.

Yep , once bitcoin is more popular and more often used there will be more regulations and laws come regarding bitcoin taxation. But for now its just a matter of time.

[ashour]

Shouldn't they be scratching their heads on how to tax anonymous bitcoin users?

Only a fool believes bitcoin is anonymous. Bitcoin users have all their financial history on the internet for anybody to see

Exactly bitcoin transactions are easily traceable and open, that's why the DEA agents were caught, using  the blockchain tracing back their bitcoin usage.

[NyeFe]

Shouldn't they be scratching their heads on how to tax anonymous bitcoin users?

Only a fool believes bitcoin is anonymous. Bitcoin users have all their financial history on the internet for anybody to see

Exactly bitcoin transactions are easily traceable and open, that's why the DEA agents were caught, using  the blockchain tracing back their bitcoin usage.

Let's not forget there's online bitcoin mixers out in the wilder. I doubt they would have had that available at the time.

[innocent93]

Businesses will not evade tax, and if they do they make themselves a target. The financial reporting from businesses already has to include information about their employees, so even if they pay their employees in Bitcoin the employees can't avoid their earnings being reported. The tax man will be able to see on the blockchain where the deposits were paid to and what happened to the funds after that, and the more information they have from companies the more they'll be able to figure out on the blockchain.

[GTO911]

Let's not forget there's online bitcoin mixers out in the wilder. I doubt they would have had that available at the time.

Centralized mixers will be the biggest honeypot for authorities, again, only a fool will trust their privacy on third party mixers

At this time, only the cryptonote protocol(Monero) is mathematically guaranteed to be anonymous

[Amph]

Shouldn't they be scratching their heads on how to tax anonymous bitcoin users?

Only a fool believes bitcoin is anonymous. Bitcoin users have all their financial history on the internet for anybody to see

Exactly bitcoin transactions are easily traceable and open, that's why the DEA agents were caught, using  the blockchain tracing back their bitcoin usage.

unless i'm missing something, with a mobile phone you can avoid being traced back, you just need to do a transaction and then move to another location, connecting to another wifi

many will take advantage of this and evade taxes

[Lauda]

Only a fool believes bitcoin is anonymous. Bitcoin users have all their financial history on the internet for anybody to see

We've already had this discussion. It is pseudo-anonymous. If you know what you're doing they won't know you're tax avoiding.
I guess people need to be more careful when using Bitcoin. Everything is in the public ledger after all.

[Borisz]

Only a fool believes bitcoin is anonymous. Bitcoin users have all their financial history on the internet for anybody to see

We've already had this discussion. It is pseudo-anonymous. If you know what you're doing they won't know you're tax avoiding.
I guess people need to be more careful when using Bitcoin. Everything is in the public ledger after all.

I agree. On the other side owever, if the tax authority sees that you have a new house and car and private jet on your name, they might come knocking and ask what you do for a living. I think it can get messy, especially if you want to make a full income/living from bitcoin and pay no tax. It might raise some eyebrows.

[Lauda]

I agree. On the other side owever, if the tax authority sees that you have a new house and car and private jet on your name, they might come knocking and ask what you do for a living. I think it can get messy, especially if you want to make a full income/living from bitcoin and pay no tax. It might raise some eyebrows.

That can't happen. Anyone who tries to pull that off is a fool. When avoiding tax you should determine a nice sum, you can't just avoid millions. That would definitely get you into trouble no matter what you're using Bitcoin or fiat.

[countryfree]

Closing tax havens? How about doing it the other way, and closing tax hells?

I love tax havens.

[dothebeats]

Only a fool believes bitcoin is anonymous. Bitcoin users have all their financial history on the internet for anybody to see

We've already had this discussion. It is pseudo-anonymous. If you know what you're doing they won't know you're tax avoiding.
I guess people need to be more careful when using Bitcoin. Everything is in the public ledger after all.

I agree. On the other side owever, if the tax authority sees that you have a new house and car and private jet on your name, they might come knocking and ask what you do for a living. I think it can get messy, especially if you want to make a full income/living from bitcoin and pay no tax. It might raise some eyebro

Even if it's an ill-gotten wealth or not, the authorities would still raise their eyebrows. Taxes are vital to every nation. Without it, the whole nation wouldn't survive trying to help its inhabitants. But sometimes, the authorities are just too much--too much that you don't even have the right to buy the things you want, especially costly things, because they'll think that you've done something that's "against the law". Very true and evident in my country.

[manselr]

It's not on their radar yet. It will be if Bitcoin gains mass adoption and we need to be prepared for that time.

My question on this matter is: How the hell are they even going to do it?
I realize they could find out if you own X BTC because you bought them from an exchange where they need your credentials, or from an BTC ATM machine where the machine asks for even fingertips.. but let's say you have a business as a freelance and accept BTC (with no public data linked to your BTC address where you get paid), let's say you have a successful mining operation going thats giving you profits, or even let's say you are making a couple bucks a month throught sig campaings and faucets and end up with a decent amount... how are they going to link to you all that BTC and try to tax it, if it never left the BTC ecosystem and the addresses aren't linked to your personal data?

[bitgeek]

Are you talking about taxing Bitcoins or taxing fiat you get from converting your coins? In EU you are not obliged to report your Bitcoin holdings, but you have to report fiat. A lot of people avoid paying taxes from Bitcoin mining and trading simply by cashing out small sums. If your day trading or your miner miner earns you $300 a month and you don't report it nobody will ever know, the sum is just too small for anyone to bother.

[Kprawn]

If you use one of the US 3rd party service providers for Bitcoin buying and selling, you are under obligation under KYC and AML regulations to provide your personal details. {That would identify you to the IRS and you will end up, paying your taxes}

Bitcoin might be pseudo-anonymous, but full identification is possible, if you re-use it and you access it, without VPN's / Proxies / Tor etc.

Rather pay your taxes and be done with it... you might just sleep better.     

[pedrog]

Tax evasion is a problem everywhere, I guess eventually some people might use bitcoin for that purpose, I don't think bitcoin is particularly good for criminal activity, the digital trail may be very difficult to eliminate nd law enforcement agencies will get up to date with latest technology, eventually.

[TippingPoint]

In the movies, when someone is running through the woods and being chased by blood hounds, they often enter shallow water and walk upstream (or is it downstream?).  They leave the stream when and where it is most advantageous.

[Hazir]

Tax evasion is a problem everywhere, I guess eventually some people might use bitcoin for that purpose, I don't think bitcoin is particularly good for criminal activity, the digital trail may be very difficult to eliminate nd law enforcement agencies will get up to date with latest technology, eventually.

This is our reality. Bitcoin is no different than say - registering your business on Isle of Man, Caymans, State of Delaware (or any other tax haven). There will be problem as long as one country will have HIGHER taxes than another. And bitcoin is just a new way of trying to avoid that. They can't close every tax haven on earth and they can't kill bitcoin, they can trying to fight tho...