How to TAX Bitcoin. An easy way !

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Bitcoin already have a taxation : it's the VAT.
simple.

in my country, it's 20% of the price. 

For all types of VAT?
http://www.vatlive.com/vat-rates/european-vat-rates/

[HabBear]

You missed one key point - taxation on income. If you're earning income in Bitcoin and the tax on that income hasn't been whithheld you'll need to declare on your tax forms at the end of the year. This income may be solely within your control to report - e.g, you sell something online. Or It may get reported to the government on your behalf - e.g., income paid to you by your employer is almost always required to be reported to the government. If the income is due to the latter scenario the government will expect you to declare that income, however they'll only know to call you out on it if the conduct an audit on you.

How governments treat bitcoin - as a currency or as an asset - will also play a part in the taxation rules and what rate is expected to be paid, e.g., the personal income tax rate or the capital gains tax rate.

Here's a good summary on things to consider related to the taxation of Bitcoin: https://en.bitcoin.it/wiki/Tax_compliance

[audaciousbeing]

In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.

So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.

So the actual way of getting the real numbers is quite bad.

In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...

All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.

Sure it is still possible to hide Bitcoins, but then it is illegal.


...or did I miss something?

I guess that part of disclosing your bitcoin is something government has been able to lay their hands on because there is no way to verify if what you will be disclosing or not as at now like we have now compared to using fiat. And I think this is one reason why government will not accept bitcoin anytime soon because they need the money and bitcoin as at today will not give them their own share of the pie.

[noictib]

In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.

So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.

So the actual way of getting the real numbers is quite bad.

In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...

All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.

Sure it is still possible to hide Bitcoins, but then it is illegal.


...or did I miss something?

If any new rule will made regarding to track every Bitcoin address then I don't think it will be a successful step for them to get success to caught the tax stealler  because Thier are lots of the ways to make anynomious deals in the Bitcoin with cold storage no one can track you .
So in my opinion there should be another wallet by the government for the Bitcoin and each wallet is verified with the eKYC verification .
So that every detail will remain in the single wallet and then no one need to track , they only need to see that how much he made received and sent  and how much he made profit . In this way they can easily apply the tax for the earnings .

[freeyourmind]

In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.

So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.

So the actual way of getting the real numbers is quite bad.

In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...

All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.

Sure it is still possible to hide Bitcoins, but then it is illegal.


...or did I miss something?

You're saying that by the government understanding which accounts you spend money on that they'd be able to trace your revenues?  But credits to your bitcoin account might not necessarily be income.  It could also just be you making a transfer or deposit.  That would need to be differentiated, and whether it will show up as capital gains if the value of bitcoin rises while you're holding it.

But at the end of the day, the amount of tax evasion currently going on with fiat is massive.  It just depends on whether people honestly report their revenues or not.  Any currency has an opportunity to pay and evade taxes, which would be illegal.

[ASHLIUSZ]

Taxation with bitcoin is possible to some extent. Because with bitcoin government can't trace the bitcoin holding and altcoin holding of particular person. Only through transaction made for the cashing out, the value can be calculated and based on this taxation can be done.

[Schuyler]

If the government is not going to put tax on bitcoin, they will surely find other ways to do so. Sooner or later, when the use of such currencies goes into mainstream, the government would set policies for them to get a share of whatever we own. Even if you just keep you bitcoin, they would most likely find other ways in taxing it. And if you are just a casual user, they would tax the items you would buy, much like value added tax on goods and commodities.

[TastyChillySauce00]

As I know the taxes is take by government from the people's income/salary/profit. Just because you have 10 btc in your wallet, it doesn't mean you have to pay tax of its amount. I think it's too complex to tax bitcoin. The simplest way they can do is to receive reports from the exchanges about our transactions.

Nah, government don't give a shit about that, what they know is if you have some sort of additional income out of your "Zone" it'll be considered as an additional income even if you're actually just converting your wealth to bitcoin and want to reverse it again.
In my country, the taxes is about 30% which absurdly high for someone who has unstable income and "unrecognised job".

[cafucafucafu]

It will be a long time before that becomes feasible. First, the country has to recognise bitcoin as a currency and also a source of income. That will take years and then the country has to trust and rely on bitcoin enough that it would implement this.
 
The other issues are avoiding taxes with this new system, and it really looks pretty easy to me. Let me make an example, say for your taxes to be paid you would have to link your bank account and then every year the government would tax you off that account or accounts. You could easily make new accounts and hide money there and avoid a heap of tax that you would have to pay. This is what you are basically suggesting here, except with bitcoin, it sounds nice, but would have too many kinks to work out and it would be way too easy to avoid paying tax with this system.

[aesma]

I'm looking into living off Bitcoin legally, and so far I'm thinking the easiest way is to make a company. That way the company has clear accounts with spendings and earnings and can pay all the needed taxes. Then I'm just an employee of the company, with a salary in fiat.

[xLittlegirly]

Government always warn about btc use ! i dont think its legal in many country .

[David19]

Government always warn about btc use ! i dont think its legal in many country .

It is legal in most countries... There aren't many countries that put on regulations on bitcoin, most don't even consider it a currency. The only warnings i ever received was from banks that would rather not have me do EUR/BTC exchanges.

[freeyourmind]

I'm looking into living off Bitcoin legally, and so far I'm thinking the easiest way is to make a company. That way the company has clear accounts with spendings and earnings and can pay all the needed taxes. Then I'm just an employee of the company, with a salary in fiat.

Depending on where you live, you should be able to do this as a corporation, or under your personal income taxes.  Keeping track of the accounts clearly are necessary either way, with respect to income, and capital gains.

[Supercrypt]

It's not that easy as you can think of. Bitcoin is yet to be globally recognized as a currency in the first place, which is not going to happen soon. However, as a tax payer, you can always declare your bitcoins as an asset with some valuation and pay taxes, no one is stopping you from that. But on a lighter note, I will not approve the idea of the government peeping in my bitcoins.

[Colt22]

While in my country the government takes all the taxes and something extra on top by including bull shit excuses in our power bill utility, gas, water and whatever we buy pretty much has tax included by 9% of the value of the purchase we pay tax on whatever we buy and sell.
When it comes to Bitcoin there is the possibility to use a mixer in order to hide your Bitcoins and there is no other way to avoid taxation in Bitcoin.

Well government are always ready put huge to on every thing that is being use by people and that is making profit for me . there could be tow points about implementing it. Between world accepted by all government as a world currency and that will take good time we all knows secondly the government will take on currency of that country and the outline price  it rally going up and down every day .it will be trough to fix a widely acceptable rates to express its value in time so I guess government will take a wise decision.

[btccashacc]

Our government treat bitcoin as stock so if your revenue came from trading then it can be taxed. Capital gain that we've earned needs to be reported and it will be taxed by the government, as long as you do trading on regulated exchanger you don't have to worry about reporting taxes. The problem is if you do trading on unregulated it will leads to your revenue will not be taxed. The point is if you want to pay taxes then report them.

[TastyChillySauce00]

Our government treat bitcoin as stock so if your revenue came from trading then it can be taxed. Capital gain that we've earned needs to be reported and it will be taxed by the government, as long as you do trading on regulated exchanger you don't have to worry about reporting taxes. The problem is if you do trading on unregulated it will leads to your revenue will not be taxed. The point is if you want to pay taxes then report them.

The opposite things happened in my country, even if we're already making a trade in a regulated and official exchange, even if already paid the taxes required by the exchanges themselves, we still need to report the income and get taxed about 30%, damn, that's a huge amount of money and only be thrown for the sake of stupid taxes without a good services as a return from government. It's like paying for nothing, at least until the corruption gone.

[LegendOF45]

This required cooperation from wallets providers, they have to separate the bitcoin already taxed and yet so I hope there is a serious study of the tax issue for the wallet providers.

[Silberman]

In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.

So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.

So the actual way of getting the real numbers is quite bad.

In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...

All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.

Sure it is still possible to hide Bitcoins, but then it is illegal.


...or did I miss something?

The example does not make sense, if people can hide their cash, stocks, secret bank accounts even if it is illegal to do so according to your example, then why suddenly when it comes to bitcoin everyone is going to say, yeah I’m going to give my information, those people that do not care will hide their bitcoin too even if it is illegal.

[David19]

In my country, I have to fill a form every year for the tax department, including my year end bank statement and the salary bill.
Together with some major bills for insurance and healthcare, that's all they get.

So I can hide cash under the bed, or have an overseas account, or have some Gold bars, etc. The goverment has to thrust me quite a bit.
They can check some transfers, but if you like to hide it, you can do it.

So the actual way of getting the real numbers is quite bad.

In Bitcoin
If the Tax department makes it a rule by law, that you have to report every BTC address you own, or every wallet you own ...

All problems solved, because then the Department has also the addresses of the petrol station and the deli you spend money.
In no time the system knows which tax counts here and can claim the respective amount from both sides.

Sure it is still possible to hide Bitcoins, but then it is illegal.


...or did I miss something?

Well as said before countries don't require you to disclose bitcoin addresses but what most countries require is for you to disclose your assets and bitcoin assets should also be disclosed and the only tax you should pay on that in most countries is just income tax