Any coin with a blockchain explorer will be easy to show your entry point. You don't even have to prove the actual transaction. Just note that wallet address(es) as yours and you're good.
In my country the tax agency uses January 1st as the price date. If I hold 20 bitcoin then I only have to say I own $998 x 20 =$19.960 worth of Bitcoin for 2017.
If Bitcoin suddenly becomes worth ten times as much on January 1st of 2018 then you note you still own those 20 bitcoins, now worth $9.980 =$190.960 and you pay the tax on it. My country's capital gains tax is absurdly low so I pay 1.3% ($248), but even if it were 15% or 20% I'd swallow and pay it, it means all the rest is gravy to do whatever you want with it.
Hello.
I did not get that!
Are they taxing your bitcoins i mean those that you just keep without converting to FIAT
or they are taxing your income (capital gains) only when you convert to FITA i mean the cash that you
receive on your bank account?!
It would be also useful to know which country is that where the tax on capital gains is so low!
In most countries Bitcoin is just considered part of your capital. Alongside stock, gold, real estate and what not. Bitcoins aren't taxed separately. In your yearly tax returns there's often an option to check a box that you own this kind of capital. That's enough, unless your capital is worth more than a minimum amount (25k in my country) then you need to specify what your capital consists of.
You pay capital gains tax over the total sum of your capital. This tax is often a lot lower compared to income tax. If in 2016 your Ethereum was worth a few thousand dollars and in 2017 it's worth a few million dollars, then you pay the capital gains tax over those million dollars and the rest is all for you.
However, if you didn't own any Ethereum in 2016 and you suddenly own millions worth of it in 2017, then you're going to have to explain where you got them from. If it was purely because of succesful speculation, then it's capital gain, if you got the Ethereum through some other means (like through work) then it's income tax.
Selling your bitcoin to fiat varies greatly by country. The EU recently ruled that EU countries are not allowed to charge VAT on purchases and sales of cryptocurrencies. So after you paid capital gains of your millions of ETH, the rest is all for you, no more taxation from selling it to fiat.
Oh and the country is The Netherlands, 1.3% capital gains is very low and also the reason the Dutch are a major tax haven. There are also countries that don't have capital gains tax at all (Hong Kong, Malaysia, New Zealand) but they're also less secure and less accessible.
Even 5% or 15% capital gains is quite low compared to any income tax or fines (you may even lose all of it) if it isn't filed properly. I'd much rather pay that than spend a lifetime hiding my wealth and not being able to use it for stuff like buying actual property.
