Tax system slow to adapt to digital economy’s rise

[Yakamoto]

I really hope so too. I really don't think bitcoin should be taxed. It's a p2p currency after all. I really shouldn't call bitcoin s currency. To volatile. It's more of an asset.

Real estate is a "p2p" investment, and it's taxed...why not bitcoin?

Of course bitcoin should be taxed! It should be treated as any other currency or investment is treated. Now, of course no one wants to pay taxes so from that perspective I understand your motivation.

My point is - what makes bitcoin any different than any other investment or currency?

We all want the world to accept bitcoin as a legit currency. We can't expect that to happen if we don't want it to be subject to the same laws that all legit currencies are subjected to.

I think the idea on this forum is that Bitcoin is a legit currency outside of the current systems, and thus it shouldn't be taxed because of it being outside of those systems. I could be very incorrect, but that's what I'm understanding.

I think I understand why people don't want it to be taxed, but there are so many different things different with Bitcoin when you try to compare it to traditional currencies that there isn't really a way to define it for taxes aside from being property, which it technically isn't.

Bitcoin is in a unique position right now. I'm curious as to where it will go in the future.

[erikalui]

Hey, let's not complain!
It will not last though. I've read many articles about how the taxmen are finding ways on how to properly check and tax all the people getting a little income from Uber or Airbnb. Income in BTC will be much harder to tax happily for us.

Hope what you are saying is true. Bitcoins are best known for the tax factor not being an issue but if this currency also is taxed, it will lose many of the miners and individuals who trade in it. Here in India, we already have 12.5% service tax plus VAT charged which purchasing a product. Also there is income tax that applies and if bitcoins also are taxed, I don't know what would be the tx applied and the minimum amount that would be tax free. I guess it would be 10 BTC then.

[callynyan]

How would they even tax Bitcoin?

[log2exp]

It's not going to be easy for tax man to collect. Unless the address is used by payroll directly. For that portion, it's completely visible to IRS.

If crypto currencies are getting adapted, it likely government will anchor tax revenue heavily on real estate, since it's not portable, no where to hide. Less income tax but more property tax is probable.

[Amph]

How would they even tax Bitcoin?

only on those that run a business like miners and merchants, or if you buy something from those merchants, but it will be certainly more easy to evade taxes

[countryfree]

Hey, let's not complain!
It will not last though. I've read many articles about how the taxmen are finding ways on how to properly check and tax all the people getting a little income from Uber or Airbnb. Income in BTC will be much harder to tax happily for us.

Hope what you are saying is true. Bitcoins are best known for the tax factor not being an issue but if this currency also is taxed, it will lose many of the miners and individuals who trade in it. Here in India, we already have 12.5% service tax plus VAT charged which purchasing a product. Also there is income tax that applies and if bitcoins also are taxed, I don't know what would be the tx applied and the minimum amount that would be tax free. I guess it would be 10 BTC then.

I don't see a BTC tax coming. Really, the most likely if BTC is to be taxed is that it will be taxed like a standard fiat currency. There is no legitimate reason to tax an income in BTC more than an income in another currency. The average government will understand that, not to block a promising new source of business.

[Gaswuwade]

How would they even tax Bitcoin?

If you are paid salary with bitcoin, then it is no different from being paid with fiat. They will tax your employer directly.

[mcplums]

I'll tell you what will happen.

Currently bitcoin (in most places) is taxed like a commodity, you pay capital gains.

This form of tax is too administratively complicated for a currency- imagine having to make a record of every single purchase you made, and the FX rate at that time. Furthermore, the 'reference' currency (local fiat) won't be around for ever so you wouldn't even have anything to compare bitcoin's value to. How do you work out the capital gains of a bitcoin if there are no fiat currencies!?

So in the long term it won't be taxed directly (via capital gains) but of course there will always be sales tax, income tax, on bitcoins/paid received, just like there is now for fiat.

[okae]

Hey, let's not complain!
It will not last though. I've read many articles about how the taxmen are finding ways on how to properly check and tax all the people getting a little income from Uber or Airbnb. Income in BTC will be much harder to tax happily for us.

it will be impossible, when bitcoin will be adopted on a large scale, they can not track anyone who is using bitcoin directly, especially for small thing and especially if done in real life with someone else that want to avoid tax and he is selling used stuff

Even now and with fiat they can't do it, they are shooting us with lot of tax from stupid things that nobody understand why we need to do that... with bitcoin will be near impossible, but dont worry, they will try to find a way to do that... the question is what we (the bitcoin users) will do ...

[Ekanenf]

I'll tell you what will happen.

Currently bitcoin (in most places) is taxed like a commodity, you pay capital gains.

This form of tax is too administratively complicated for a currency- imagine having to make a record of every single purchase you made, and the FX rate at that time. Furthermore, the 'reference' currency (local fiat) won't be around for ever so you wouldn't even have anything to compare bitcoin's value to. How do you work out the capital gains of a bitcoin if there are no fiat currencies!?

So in the long term it won't be taxed directly (via capital gains) but of course there will always be sales tax, income tax, on bitcoins/paid received, just like there is now for fiat.

Ideally, in the long term, the bitcoin would just be taxed as an income, like the current fiat. So it will be recognized as money.

[Laosai]

I'll tell you what will happen.

Currently bitcoin (in most places) is taxed like a commodity, you pay capital gains.

This form of tax is too administratively complicated for a currency- imagine having to make a record of every single purchase you made, and the FX rate at that time. Furthermore, the 'reference' currency (local fiat) won't be around for ever so you wouldn't even have anything to compare bitcoin's value to. How do you work out the capital gains of a bitcoin if there are no fiat currencies!?

So in the long term it won't be taxed directly (via capital gains) but of course there will always be sales tax, income tax, on bitcoins/paid received, just like there is now for fiat.

I agree! Indirect taxing is the future it seems to tend to.
It's not a stupid way to tax your citizens though: the only one paying the taxes are the one spending money so it's directly proportional to your amount of money!

Moreover, it allows government to classify kind taxes. You can decide to tax more the Iphone and less or not at all the groceries for example ^^

[maku]

I really hope so too. I really don't think bitcoin should be taxed. It's a p2p currency after all. I really shouldn't call bitcoin s currency. To volatile. It's more of an asset.

I doubt that they will tax Bitcoin. If they do, how are they going to do it?

They are not gonna to tax bitcoin directly. They instead will put tax or some kind of excise on bitcoin related services.
Seeing how we don't have direct bitcoin adoption yet and we need exchanges I feel like taxing these will be the first move to bitcoin taxation.

[yenxz]

Credit to: Corruption News : Tax system slow to adapt to digital economy’s rise

LOST REVENUE:A lack of regulations on taxing cross-border Web-based content and services providers puts their local peers at a disadvantage, Ernst & Young said

The nation’s tax system is relatively behind developed markets in adapting to the proliferation of the digital economy, which has resulted in lost revenues for the government as the sector grows, consulting firm Ernst & Young said yesterday.

The audit services giant said that while China’s Alibaba Group Holding Ltd (阿里巴巴), which recorded sales of US$9.32 billion during last year’s Nov. 11 “Singles Day” promotions, has set an example for the rapid development of e-commerce, the digital economy encompasses many other less straightforward business models than purchasing goods online, which pose challenges for tax authorities worldwide.

Hope they will not come after Bitcoin companies.

also hope like that,bitcoin not this year have tax rules,in my country still not popular and goverment still not accepted bitcoin as payment method.

[Ekanenf]

I really hope so too. I really don't think bitcoin should be taxed. It's a p2p currency after all. I really shouldn't call bitcoin s currency. To volatile. It's more of an asset.

I doubt that they will tax Bitcoin. If they do, how are they going to do it?

They are not gonna to tax bitcoin directly. They instead will put tax or some kind of excise on bitcoin related services.
Seeing how we don't have direct bitcoin adoption yet and we need exchanges I feel like taxing these will be the first move to bitcoin taxation.

Bitcoin will be treated as a currency in the future. So it will be only taxed as an income. It will not be commodity.