Bitcoin vs Taxes

[Harlot]

That is odd and I think it is wrong. First we must know the origin of that Bitcoin in which it came from does it come from a payment from your business? or does it come from a remittance of a friend or family member? Converting your Bitcoin to Fiat currency is not taxable by means of income tax not unless your are and exchange earning money of conversion. Other than that I think you have mistaken a different kind of tax for Bitcoin. Any tax like income tax will be voidable and reimbursable from the government.

[1714981915]

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[avikz]

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.

I believe bitcoin's legal status is not clear in majority of the countries and that creates a lot of confusion on taxing part. People are unsure about how to pay tax on bitcoin. My country is having the same status So I am disclosing my bitcoin incomes in my tax filing every year since last two years.

having said that, I only disclose what I have cashed out in fiat. So my actual bitcoin holding I am not disclosing as I am not getting any income from it. I am disclosing only the amount I have converted in to fiat. I hope I am doing the right thing.

[iram1011]

Most of countries consider Bitcoin as an asset or intangible property ( as by IRS ). Bitcoin's treatment as an asset makes the tax implication clear. However, taxation on bitcoins and its reporting is not as simple as it seems. For starters, it is difficult to determine the fair value of the bitcoin on purchase and sale transactions. Frequent traders and investors could use "first in, first out" (FIFO) or "last in, first out" (LIFO) accounting techniques to reduce tax obligations.

[megynacuna]

Most of countries consider Bitcoin as an asset or intangible property ( as by IRS ). Bitcoin's treatment as an asset makes the tax implication clear. However, taxation on bitcoins and its reporting is not as simple as it seems. For starters, it is difficult to determine the fair value of the bitcoin on purchase and sale transactions. Frequent traders and investors could use "first in, first out" (FIFO) or "last in, first out" (LIFO) accounting techniques to reduce tax obligations.

Well it's complicated but I think the best way to include taxes on Bitcoin transactions would be to add them up to the miner fees and charge them per each transaction that moves over the blockchain but I don't know how practical this could be since we are all not living in the same country and our laws regarding taxes might vary.

[hajimasan]

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 a bitter truth in the current time , earlier there was no tax needed to pay to make buy and sell of the Bitcoin but currently many countries government are making Thier eyes attention at the Bitcoin and Bitcoin users in the countries .
Here I myself facing the big problems regarding this , because due to high taxation system , the trader always sell Thier btc at very high price in comparison of current price .
And also many types of the exchange which are making buy sell Bitcoin directly are making the charge of tax fee 18% ( in my country) .
So I think this is all over the force at the life of the buyers and sellers only because traders can manage by making more charge at the customers but problems are falling at our head where at the edge we will have net no profit and no loss , I means to say that we can't make profit in small deals , we only needed in this case of bulk deals to make profit .

[aTriz]

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.

Whenever you sell bitcoin for fiat currencies, like on websites like localbitcoins.com, you will have to pay a tax that the website will take away from you. Before, when buying or selling Bitcoin there wasn't a tax that was taken away from you, but now since Bitcoin has caught the eyes of some governments, they have implemented a tax on them. This makes it hard to make profit off Bitcoin, especially by doing buy low, sell high. Try sell in large quantities to avoid being taxes a lot.

[deisik]

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.

I believe bitcoin's legal status is not clear in majority of the countries and that creates a lot of confusion on taxing part. People are unsure about how to pay tax on bitcoin. My country is having the same status So I am disclosing my bitcoin incomes in my tax filing every year since last two years.

having said that, I only disclose what I have cashed out in fiat. So my actual bitcoin holding I am not disclosing as I am not getting any income from it. I am disclosing only the amount I have converted in to fiat. I hope I am doing the right thing

There is an old adage or wisdom

Which says that you shouldn't trouble trouble until trouble troubles you. It is your choice after all but as you say yourself you can only hope that you are doing the right thing. With Bitcoin taxes, the issue is twofold. First, it may seem to be "ideologically" or morally right (and feel good at that) to pay taxes on your income and in some countries it may well be so (though in the majority of others it is certainly not). And, second, you may in fact be making yourself more bad than good since the authorities would know that you have bitcoins, and if there is some commotion about Bitcoin usage in your country, you will be among the first to reap the fruits of it, so to speak

[RodeoX]

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.

What tax do you mean? If the tax paid to the government of course it does not exist until now. Maybe you mean the cost of making a deposit, withdraw and exchange bitcoin. It is very different from the tax, because it is the cost of using a service on an exchange. Tax reporting to the government has never been found.

It depends on where you live. In the U.S. there has always been a capitol gains tax on bitcoin. Whatever profit you see from selling your coins is taxable. If you lose money you may also be able to claim a loss, but your profits are certainly taxable.

[LuanX3]

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.

I don't get why people always think that bitcoins are not taxable! Just to clarify what the governments are taxing. It is not taxing the use of bitcoins or owning it. What the governments are taxing is the income your derive from the use of bitcoins. If you buy bitcoins at $1,000 and sold it for $2,300 then that would mean that you are liable for income tax for the $1,300 profit!

[deisik]

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.

I don't get why people always think that bitcoins are not taxable! Just to clarify what the governments are taxing. It is not taxing the use of bitcoins or owning it. What the governments are taxing is the income your derive from the use of bitcoins. If you buy bitcoins at $1,000 and sold it for $2,300 then that would mean that you are liable for income tax for the $1,300 profit!

That all depends on specific jurisdiction

In some countries currency exchange operations (and thus income earned through them) are not taxable. So if you bought, for example, 1,000 dollars with some local currency and in a year sold the same 1,000 dollars at a premium, you may not have to pay the income tax. In this way, if Bitcoin is legalized as a currency, the income earned with it won't be taxable in that country. Apart from that, if Bitcoin is considered as property, you may not have to pay taxes either provided you kept your Bitcoin stash for a certain period of time (say, over a year)

[jpoker272727]

Most of countries consider Bitcoin as an asset or intangible property ( as by IRS ). Bitcoin's treatment as an asset makes the tax implication clear. However, taxation on bitcoins and its reporting is not as simple as it seems. For starters, it is difficult to determine the fair value of the bitcoin on purchase and sale transactions. Frequent traders and investors could use "first in, first out" (FIFO) or "last in, first out" (LIFO) accounting techniques to reduce tax obligations.

Well it's complicated but I think the best way to include taxes on Bitcoin transactions would be to add them up to the miner fees and charge them per each transaction that moves over the blockchain but I don't know how practical this could be since we are all not living in the same country and our laws regarding taxes might vary.

Miner fees are much better than taxes. As you know government taxes are more than miner fees. So it is better that bitcoin is taking fees on transactions etc by miners. I would prefer that miner’s fees are much better than taxes. Taxes would decrease the demand of bitcoin in a market. If there is no demand how bitcoin will run?

[GreenBits]

Most of countries consider Bitcoin as an asset or intangible property ( as by IRS ). Bitcoin's treatment as an asset makes the tax implication clear. However, taxation on bitcoins and its reporting is not as simple as it seems. For starters, it is difficult to determine the fair value of the bitcoin on purchase and sale transactions. Frequent traders and investors could use "first in, first out" (FIFO) or "last in, first out" (LIFO) accounting techniques to reduce tax obligations.

Well it's complicated but I think the best way to include taxes on Bitcoin transactions would be to add them up to the miner fees and charge them per each transaction that moves over the blockchain but I don't know how practical this could be since we are all not living in the same country and our laws regarding taxes might vary.

Miner fees are much better than taxes. As you know government taxes are more than miner fees. So it is better that bitcoin is taking fees on transactions etc by miners. I would prefer that miner’s fees are much better than taxes. Taxes would decrease the demand of bitcoin in a market. If there is no demand how bitcoin will run?

Well bitcoin kinda is already taxed, but only for US citizens, and only after you convert it to a Fiat currency. So we kinda have to deal with the high fee situation and the capital gains tax situation, but I will concede that most likely, virtually no one is paying proper bitcoin tax. I  use the Shift card that Coinbase offers; I'm subject to sales tax on my bitcoin purchases, which is interesting.

[LeGaulois]

If you sell Bitcoin for Fiat, then you have to pay taxes.

If you didn't buy some bitcoins then nope. You pay taxes on the profits made from buying and selling only

However, taxation on bitcoins and its reporting is not as simple as it seems. For starters, it is difficult to determine the fair value of the bitcoin on purchase and sale transactions. Frequent traders and investors could use "first in, first out" (FIFO) or "last in, first out" (LIFO) accounting techniques to reduce tax obligations.

Not difficult, you know how much dollars you injected and how much dollars you receive from sales. It's up to people to keep track records of the money spent to buy

Well bitcoin kinda is already taxed, but only for US citizens, and only after you convert it to a Fiat currency. So we kinda have to deal with the high fee situation and the capital gains tax situation, but I will concede that most likely, virtually no one is paying proper bitcoin tax. I  use the Shift card that Coinbase offers; I'm subject to sales tax on my bitcoin purchases, which is interesting.

Bitcoin is taxed not only in the US, there are several countries as well. Is no one paying taxs on Bitcoin? There are a loooot of people and companies paying those taxs. And trying to avoid to pay those is the same as looking to cheat the country, the population, own friend, family, etc. If people cheat the taxs then they shouldn't be eligible for a lot of things in their own country

Miner fees are much better than taxes. As you know government taxes are more than miner fees. So it is better that bitcoin is taking fees on transactions etc by miners. I would prefer that miner’s fees are much better than taxes. Taxes would decrease the demand of bitcoin in a market. If there is no demand how bitcoin will run?

You have to pay taxs on food, do you see a decrease of food market/demand?

[panju1]

Most of countries consider Bitcoin as an asset or intangible property ( as by IRS ). Bitcoin's treatment as an asset makes the tax implication clear. However, taxation on bitcoins and its reporting is not as simple as it seems. For starters, it is difficult to determine the fair value of the bitcoin on purchase and sale transactions. Frequent traders and investors could use "first in, first out" (FIFO) or "last in, first out" (LIFO) accounting techniques to reduce tax obligations.

Well it's complicated but I think the best way to include taxes on Bitcoin transactions would be to add them up to the miner fees and charge them per each transaction that moves over the blockchain but I don't know how practical this could be since we are all not living in the same country and our laws regarding taxes might vary.

Miner fees are much better than taxes. As you know government taxes are more than miner fees. So it is better that bitcoin is taking fees on transactions etc by miners. I would prefer that miner’s fees are much better than taxes. Taxes would decrease the demand of bitcoin in a market. If there is no demand how bitcoin will run?

You should not be comparing miner fees and taxes. Both could exist and hit your wallet. Transaction fees will go down when scaling solutions are implemented. You cannot say the same thing about taxes. 

[pearlmen]

Most of countries consider Bitcoin as an asset or intangible property ( as by IRS ). Bitcoin's treatment as an asset makes the tax implication clear. However, taxation on bitcoins and its reporting is not as simple as it seems. For starters, it is difficult to determine the fair value of the bitcoin on purchase and sale transactions. Frequent traders and investors could use "first in, first out" (FIFO) or "last in, first out" (LIFO) accounting techniques to reduce tax obligations.

Well it's complicated but I think the best way to include taxes on Bitcoin transactions would be to add them up to the miner fees and charge them per each transaction that moves over the blockchain but I don't know how practical this could be since we are all not living in the same country and our laws regarding taxes might vary.

Miner fees are much better than taxes. As you know government taxes are more than miner fees. So it is better that bitcoin is taking fees on transactions etc by miners. I would prefer that miner’s fees are much better than taxes. Taxes would decrease the demand of bitcoin in a market. If there is no demand how bitcoin will run?

Taxes would in no way affects miner fees as they are both independent while an indivudal is earning bitcoin for his job or activities or even sale, the miner is collecting his own fees for making the transaction possible so in the case of tax, both of them will be taxed because they are both generating income. For those whose countries have taken a position, there is really no way out of it but for countries like mine, we just need to keep hoping the decision is not taken any time soon in to keep enjoying our interest free investment.

[malikusama]

It is true that there tax is applicable on bitcoin trading. You have to pay the tax if you are selling your bitcoins in your local bitcoin exchange for fiat.

[notyours]

Here in my country, there is no tax when you buy bitcoin but there is a fees when you buy in bitcoin company like coins.ph, buybitcoin.ph. Thats why they earn a lot of profit / money because of they make a business that trade real money into bitcoin.

[Kp4everK]

At us while bitcoin it is not assessed tax, but I think in a short time in all countries will begin bitcoin to tax. The state wants to profit from any valuable things and it will find a way to do it.

[Basmic]

In my country there is no such problem. I deduce on the Bank account only in small amounts and therefore they are not monitored by tax authorities. When making major purchases there are many other ways how not to pay taxes.

[Betwrong]

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.

If you make a lot of money, like dozens of thousands USD per year, trading cryptos, Bitcoin included, I think taxes should be paid from that. But taxing every $20 worth of Bitcoin selling is ridiculous imo. Amount should matter, rich people have to pay more taxes, poor people shouldn't pay any. But that's just my opinion.