Taxes and legal stuff

[neneko]

I have a friend that owns a fairly small scale webshop dealing in hardware.  It's based in sweden but ship both from here and poland. We were talking half seriously about setting up a separate webshop selling hardware for bitcoins. It doesn't seem like a entierly bad idea. A webshop is a pretty obvious place to start accepting bitcoins and if there's one thing bitcoin enthusiasts might be interested in it'd be hardware.

What we couldn't figure out though was what the law on taxes would be. This would be located in sweden but I assume this is a question that might come up no matter where you're located. Are we supposed to pay sales tax on the bitcoin we charge for the products? If so what's the swedish tax office bitcoin address?  Jokes aside does anyone have any info to enlighten me here?

If we do decide to go ahead with this idea it could be up and running fairly soon since the products are already in stock for his other webshop.

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[VelvetIsPhotography]

I'm sure, no matter what country you are in, the common answer will be to pay your taxes in the currency of the country you are doing business in, despite it being in a different currency. Although, of course, you should always check with a tax advisor. (Goodluck finding one that knows what you are talking about.)

[anonymoususer1936]

My advice is: Don't take tax advice from internet forums. Consult a lawyer.

Having said that, I believe it is very difficult for the Swedish government to tax you on your bitcoin earnings. Imagine if you were being paid in World of Warcraft gold instead. Would they tax you on that?

Now, when you sell your bitcoins for Swedish Krona (or US Dollars, or whatever) then they are liable to tax you.

[tim85254]

I have a friend that owns a fairly small scale webshop dealing in hardware. ....

What we couldn't figure out though was what the law on taxes would be.

Definitely consult a tax lawyer.  Don't let him charge you for YOUR time when he asks you, what the blazes is Bitcoin? and then you have to explain

You might have to keep two sets of books, after a fashion.  All the transactions done in BTC with your customers, then converted to local currency (probably as fast as possible after the transaction).  That way everything is straightforward for VAT calculations, if indeed the tax lawyer tells you that you've gotta pay up.

Is there any possibility you could operate from a Free Trade Zone?  Eh, but that wouldn't solve anything because you'd still have to figure out import taxes for sales to local buyers.  Yeah, you need a tax lawyer.

[econatty]

 Don't let him charge you for YOUR time when he asks you, what the blazes is Bitcoin? and then you have to explain

You have no idea what you are talking about.  No halfway competent or decent tax attorney will have any idea what he is talking about.

 I don't know how you pay income taxes, what you need to file with the government, and who does this service for swedes, or how taxes are calculated in Sweden.  I would find someone inside your country who knows a lot about your countries individual and business tax laws and consult with them.  Pay THEM for their time.  You can probably set up a low cost or possibly free initial consultation.  If you were in the US you would be wise to set up a corporate structure and pay someone for good tax and business advice.  

[dana.powers]

Agree - your friend should find a lawyer to address general legal issues related to running a small webshop.  BTC or no.

[tim85254]

 Don't let him charge you for YOUR time when he asks you, what the blazes is Bitcoin? and then you have to explain

You have no idea what you are talking about.  

Nice to meet you, too.

Of course the advice wouldn't be free.  All I'm saying is "haggle."  It's a two-way street.  That or barter services, but I'd rather be an attorney's client than his vendor.

Anyway this is just another post to get out of the newbie caste so I can ask a REAL question about getting some part of a mining engine to compile on Amazon EC2.  Peace out.

[Karen Palen]

Well assuming that someone here is serious about asking, definitely ask a tax "lawyer" NOT an "accountant"!

THe FIRST question to ask is "How much do YOU pay in taxes?".

100% of accountants and 99% of lawyers will say "I pay all the taxes that are due ... (or some equivalent)".

The person you want will say something like "the bare minimum".

The lawyer who has done MY taxes for the past 10 years said "I pay $1000/year because the IRS fusses too much if I pay less".

I later learned that he "nets" more than $1M/year in "cash flow" (non-taxable) but ZERO "profits" (taxable)! Well taxes ARE his business after all... 

[tim85254]

Ah hell, I'll reply one more time.  1 hours and 58 minutes of "browsing" until I'm a real member.

Oh wait, that's all I had to say.

[bitcola]

Even barter is taxable.

So, yes, bitcoins are taxable. Of course, you'll have to pay taxes in your local currency.


This is the problem with bitcoins.


Yes, you can be anonymous (just like cash). But you can also sell illicit things and not be traced.

If you want to be legitimate with your trade, just like regular currency you must be transparent and this means a tax liability.


So really, it is not the fault of bitcoins, it is the fault of the modern electronic transaction based economy.

Bitcoin is like cash but with advantages (and some disadvantages). But the idea that we can get rid of taxes because of BTC is a total pipe dream. And a great shame too.

[PMX-67-de]

I have a friend that owns a fairly small scale webshop dealing in hardware.  It's based in sweden but ship both from here and poland. We were talking half seriously about setting up a separate webshop selling hardware for bitcoins. It doesn't seem like a entierly bad idea. A webshop is a pretty obvious place to start accepting bitcoins and if there's one thing bitcoin enthusiasts might be interested in it'd be hardware.

What we couldn't figure out though was what the law on taxes would be. This would be located in sweden but I assume this is a question that might come up no matter where you're located. Are we supposed to pay sales tax on the bitcoin we charge for the products? If so what's the swedish tax office bitcoin address?  Jokes aside does anyone have any info to enlighten me here?

If we do decide to go ahead with this idea it could be up and running fairly soon since the products are already in stock for his other webshop.

Hallo,

I'am from Germany and my tax advisor told me, that I have to pay taxes only when I cash back the BTC's back to a classical currency. But if this is going via MtGox or an other currency exchange this is not regarding income taxes but related to capital income tax which is i.e., if you have a relevant tax rate, less than income tax ( est. 25% in DE). Good deal so far here in Germany.

R.

[grosnarvalo]

OK

[neneko]

Thanks a lot for all the replies especially PMX-67.

While we may pick this idea up again soon it's on ice for the time being due to the instability on the bitcoin market. Hopefully we can pick it up again and go through with it once the markets open up again and we can verify that the currency is at least fairly stable.