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Author Topic: Bitcoin vs Taxes  (Read 5825 times)
Beerwizzard
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July 15, 2017, 07:08:15 AM
 #1

I've heared that in some countries people have to pay the income tax after buying fiat for their bitcoins. Anyone faced such problem? If yes then how you deal with it in your country?
At one point of view  bitcoin is an instrument for investment so ppl buy it willing to get income in their currency.
At the other point it is a currency and it might be used with a purpose of saving. In this case the tax would be stupid.

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July 15, 2017, 07:11:08 AM
 #2

If you sell Bitcoin for Fiat, then you have to pay taxes.
While Bitcoin is a currency, it is considered a commodity and therefore by selling it you're 'making money'.
It's illegal if you don't pay taxes.
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July 15, 2017, 07:32:44 AM
 #3

If you sell Bitcoin for Fiat, then you have to pay taxes.
While Bitcoin is a currency, it is considered a commodity and therefore by selling it you're 'making money'.
It's illegal if you don't pay taxes.
Applying the same logic: I'm expecting inflation and buying USD for my EUR. Then EUR lose 1% and at the same time USD is getting 1%.  If i exchange it back i will get 2% income (1% counting the inflation cut). So should i normaly pay tax for this income after i tried to save my money in another currency?

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July 15, 2017, 08:09:40 AM
 #4

If you sell Bitcoin for Fiat, then you have to pay taxes.
While Bitcoin is a currency, it is considered a commodity and therefore by selling it you're 'making money'.
It's illegal if you don't pay taxes.
Applying the same logic: I'm expecting inflation and buying USD for my EUR. Then EUR lose 1% and at the same time USD is getting 1%.  If i exchange it back i will get 2% income (1% counting the inflation cut). So should i normaly pay tax for this income after i tried to save my money in another currency?
As you make money, you pay more on tax. Example: if you make a sale or convert a digital currency to another, or you pay for any shopping services using your currency, you have to pay tax.
Your total paid or return reaches you including tax.

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July 15, 2017, 08:31:50 AM
 #5

If you sell Bitcoin for Fiat, then you have to pay taxes.
While Bitcoin is a currency, it is considered a commodity and therefore by selling it you're 'making money'.
It's illegal if you don't pay taxes.
Applying the same logic: I'm expecting inflation and buying USD for my EUR. Then EUR lose 1% and at the same time USD is getting 1%.  If i exchange it back i will get 2% income (1% counting the inflation cut). So should i normaly pay tax for this income after i tried to save my money in another currency?

if you don't sell you don't pay any tax, from the moment you dump for fiat you pay a% of tax, but this is true on everything, bitcoin is no different, but bitcoin allow you to avoid tax, if you use it as a currency that's is the beauty at least for now

also if you sell on exchange but leave the money there you also don't pay anything, you can always get those back into bitcoin, for trading
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July 15, 2017, 08:34:51 AM
 #6

I've heared that in some countries people have to pay the income tax after buying fiat for their bitcoins. Anyone faced such problem? If yes then how you deal with it in your country?
At one point of view  bitcoin is an instrument for investment so ppl buy it willing to get income in their currency.
At the other point it is a currency and it might be used with a purpose of saving. In this case the tax would be stupid.

Luckily no. In Austria and Germany there's the following approach on Bitcoin's currency / commodity dichotomy: You only have to pay income taxes on Bitcoin if you get paid with it (ie. Bitcoin being used as a currency to pay for your goods and services), make profit as a day trader or sell it as a product (ie. you're a company / broker offering Bitcoins). If used as a commodity / store of value, there's a minimum holding time of one year after which you can sell Bitcoin without any taxations on the profits (akin to gold).

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July 15, 2017, 10:23:46 AM
 #7

I've heared that in some countries people have to pay the income tax after buying fiat for their bitcoins. Anyone faced such problem? If yes then how you deal with it in your country?
At one point of view  bitcoin is an instrument for investment so ppl buy it willing to get income in their currency.
At the other point it is a currency and it might be used with a purpose of saving. In this case the tax would be stupid.

It can be considered trading income or capital gains, when you sell your bitcoins for fiat.
Most countries have some kind of tax on capital gains. The tax rate could be different depending on whether it is short term or long term capital gains (depending on how long you hold your bitcoins).

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July 15, 2017, 10:32:00 AM
 #8

I got taxed after I sell my coin, the exchanger automatically charge it, but there are still no rules yet for the tax income, in the future I think all of our activity that can be supervised like selling or buying will be taxed, the government doesnt really care about it, as long as you gained more money using bitcoin then you need to be taxed
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July 15, 2017, 11:06:00 AM
 #9

During the early days people used bitcoin to escape taxation and later on things got changed little by little. On the whole the taxation has been now regulated based on the transactions performed in several countries. Hope the same will get used around the world countries when more people start using bitcoin.

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July 15, 2017, 11:17:42 AM
 #10

I've heared that in some countries people have to pay the income tax after buying fiat for their bitcoins. Anyone faced such problem? If yes then how you deal with it in your country?
At one point of view  bitcoin is an instrument for investment so ppl buy it willing to get income in their currency.
At the other point it is a currency and it might be used with a purpose of saving. In this case the tax would be stupid.

This is common in the States because Uncle Sam hates people missing their tax payments and they come after any form of tax evasion. Crime lord Al Capone was caught and imprisoned for tax evasion, not for murder or for other crimes related for being a mobster.

Heres the good news. If your BTC trade ended up in a laws you are eligible for a tax cut.


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July 15, 2017, 11:17:55 AM
 #11

whenever i have sold bitcoin for local currency i have always done it at much higher market prices and p2p and that means no taxes Wink

also we are moving towards a world where bitcoin taxes are only for investors in bitcoin. this means if you go on an exchange and try trading bitcoin or buy and sell it there you will have to pay taxes.

but if you are using bitcoin to buy something (aka use bitcoin as a currency) you don't have to pay ANY taxes. it is 0 tax for that.

and everyone is happy about it. the traders make a lot so they don't care and the users are happy because obviously 0 tax!














 

 

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CARrency
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July 15, 2017, 12:04:25 PM
 #12

I've heared that in some countries people have to pay the income tax after buying fiat for their bitcoins. Anyone faced such problem? If yes then how you deal with it in your country?
At one point of view  bitcoin is an instrument for investment so ppl buy it willing to get income in their currency.
At the other point it is a currency and it might be used with a purpose of saving. In this case the tax would be stupid.

Buying bitcoin, selling of your bitcoin, converting bitcoin into fiats and fiats into bitcoin you are paying taxes. You might think that bitcoin is a decentralized digital currency, but you are still paying for your transactions, we know most of them as fees, especially to wallets or applications or a company.

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July 15, 2017, 01:33:15 PM
 #13

I've heared that in some countries people have to pay the income tax after buying fiat for their bitcoins. Anyone faced such problem? If yes then how you deal with it in your country?
At one point of view  bitcoin is an instrument for investment so ppl buy it willing to get income in their currency.
At the other point it is a currency and it might be used with a purpose of saving. In this case the tax would be stupid.

Here in my country it is understood because all income is taxable. Income, in whatever form, and from where ever for as long as it is still considered income, a certain  tax is imposed. However, with regard to bitcoin income, it is hard for my government to track them as these are all online. The Internal Revenue cannot easily monitor people's income if they are through online transactions.
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July 15, 2017, 01:40:38 PM
 #14

In my country bitcoin taxed As of November 9, 2016, all fees for both transactions and withdrawals incurred in Bitcoin have included VAT (Value Added Tax) of 10%. While to send bitcoin to fellow wallet was not charged.
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July 15, 2017, 02:09:55 PM
 #15

If you sell Bitcoin for Fiat, then you have to pay taxes.
While Bitcoin is a currency, it is considered a commodity and therefore by selling it you're 'making money'.
It's illegal if you don't pay taxes.
I dont agree with you at all, with your premise, if you sell bitcoin for fiat then you should pay tax, if thats the case then if you buy bitcoins with fiat, you should then pay tax again since you consider it as a commodity.



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The_prodigy
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July 15, 2017, 02:34:02 PM
 #16

If you sell Bitcoin for Fiat, then you have to pay taxes.
While Bitcoin is a currency, it is considered a commodity and therefore by selling it you're 'making money'.
It's illegal if you don't pay taxes.
I dont agree with you at all, with your premise, if you sell bitcoin for fiat then you should pay tax, if thats the case then if you buy bitcoins with fiat, you should then pay tax again since you consider it as a commodity.

I think that this is really a dillema since some people consider bitcoin a separate resource from mo ey that is taxable but we have to agree that bitcoon functions and is used as mo ey that is taxable. Thug in some points I agree that with the taxes imposed to bitcoin makes it harder to enjoy it like it used to before but in the end I think it is a price we really have to pay

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July 15, 2017, 02:42:04 PM
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Wanted to know if there is any country which has Zero tax on Btc . Well rest in the tax paying nations I think they will have to pay as per their category under which they fall in the tax bracket . Well if Btc is treated as separate entity then it's a different story .

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July 15, 2017, 03:04:58 PM
 #18

I've heared that in some countries people have to pay the income tax after buying fiat for their bitcoins. Anyone faced such problem? If yes then how you deal with it in your country?
At one point of view  bitcoin is an instrument for investment so ppl buy it willing to get income in their currency.
At the other point it is a currency and it might be used with a purpose of saving. In this case the tax would be stupid.

In my country it has not been formalised but when its eventually done, then its going to be against profit that one will be taxed and nothing else but that will mean serious documentations and updating in other to ensure the right amount of tax to be paid in which I am sure we have the capacity yet. To other countries, bitcoin will be regarded as stock where one pay say capital gains tax in its disposal if there is a profit though.

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July 15, 2017, 03:10:10 PM
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I've heared that in some countries people have to pay the income tax after buying fiat for their bitcoins. Anyone faced such problem? If yes then how you deal with it in your country?

You need to understand first what is Income tax, it is a tax which is paid on income. How buying bitcoins for money considered as income? You go to shop, buy grocery then do you need to pay income tax on that?
Don't confuse pro economics term with bitcoins.
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July 15, 2017, 03:28:14 PM
 #20

I've heared that in some countries people have to pay the income tax after buying fiat for their bitcoins. Anyone faced such problem? If yes then how you deal with it in your country?
At one point of view  bitcoin is an instrument for investment so ppl buy it willing to get income in their currency.
At the other point it is a currency and it might be used with a purpose of saving. In this case the tax would be stupid.

Here in my country it is understood because all income is taxable. Income, in whatever form, and from where ever for as long as it is still considered income, a certain  tax is imposed. However, with regard to bitcoin income, it is hard for my government to track them as these are all online. The Internal Revenue cannot easily monitor people's income if they are through online transactions.

+1

Governments are still not focusing enough on Bitcoin to make it necessary to pay taxes in the sense that there is practically no way to get caught. Most people, I believe, who made a fortune with Bitcoin do not pay taxes on it... why would they? The government has no idea and even if they do they cannot prove you actually own an address without knowing your secret keys and/or password, so it would be a futile endeavor for them to even try.

With that said, it is still advisable to pay them so as to avoid any potential legal or repayment issues down the road.
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