US/Euro accountants to minimize bitcoin tax?

[Amnvex]

Does anyone know of anyone who specializes in this as the Swiss bank industry used to? And assuming multiple citizenships, does that make any difference? Someone I know has an EU passport and a US passport available, but the US passport is going to the garbage bin in a few years (to avoid taxes, and for other reasons).

Any suggestions would be welcome. Thanks.

[HeRetiK]

Citizenship alone is insufficient, you also need to be a registered resident in one of the low tax EU countries to achieve tax residency.

As long as you are an US citizen, the IRS will try to get after you regardless of tax residency. The outcome will depend on the tax treaty between the respective countries, but expect additional paperwork regardless.

As far as I know if you've ever been an US citizen or resident, the IRS will try to get after you even after you've long left both the citizenship and the country behind. You likely won't owe them anything, but they'll haunt you regardless.


Not an expert in the field though, just based on my general knowledge as an EU tax payer and on anecdotes I've heard from my tax advisor. Your friend's mileage may vary and there might be loopholes that I'm not aware of.

[cellard]

As far as I know if you've ever been an US citizen or resident, the IRS will try to get after you even after you've long left both the citizenship and the country behind. You likely won't owe them anything, but they'll haunt you regardless.

This is insane, I've also heard this (how if you are born in the USA, you have basically no escape... you will be on seek and destroy forever no matter where you are). This is just nuts. I would like the details on this.

I think Roger Ver was born in the US and he left and is now living in Tokyo, Japan and has a citizenship on St Kitts and Nevis I think, which is one of these small islands, so im not sure if he has a double citizenship, one there for low taxes and then a secondary one in Japan.

Im not sure but I think he can never go back to the US.. but he has a criminal case due the explosives thing too so who knows... this tax thing is too complicated to understand to be honest.

From the few I've read, you would need a double citizenship and you would need to live an X amount of days in the other country in order to keep both citizenships, maybe the amount of time you need to pass on each country depends on each jurisdictions. Would like to learn what the best outcome of this is and everything being legal of course, I would rather sleep at night.

[Amnvex]

Citizenship alone is insufficient, you also need to be a registered resident in one of the low tax EU countries to achieve tax residency.

As long as you are an US citizen, the IRS will try to get after you regardless of tax residency. The outcome will depend on the tax treaty between the respective countries, but expect additional paperwork regardless.

As far as I know if you've ever been an US citizen or resident, the IRS will try to get after you even after you've long left both the citizenship and the country behind. You likely won't owe them anything, but they'll haunt you regardless.


Not an expert in the field though, just based on my general knowledge as an EU tax payer and on anecdotes I've heard from my tax advisor. Your friend's mileage may vary and there might be loopholes that I'm not aware of.

But if you file the expatriation tax forms, that should be the end of the road for the IRS. I know that technically they keep haunting you until you do that. His plan is to change his name, though, because the US passport stuff doesn't align with other info. They're not gonna put the two together unless they have active investigators looking for you. I guess it seems one has to pay his tax and then exit the country with all the required paperwork to end the relationship with the US authorities for the easiest way to do this.

[olubams]

Does anyone know of anyone who specializes in this as the Swiss bank industry used to? And assuming multiple citizenships, does that make any difference? Someone I know has an EU passport and a US passport available, but the US passport is going to the garbage bin in a few years (to avoid taxes, and for other reasons).

Any suggestions would be welcome. Thanks.

Even undocumented immigrants citizens pay taxes because its deducted from their income before payment how much more a citizen who is well documented. Another thing you need to know is that taxes arises on where the individual is resident and not its country of origin which means denouncing your citizenship does not exclude you from tax. Just find the accountant that would help you in tax planning rather than looking for ways to evade it.

[Amnvex]

Does anyone know of anyone who specializes in this as the Swiss bank industry used to? And assuming multiple citizenships, does that make any difference? Someone I know has an EU passport and a US passport available, but the US passport is going to the garbage bin in a few years (to avoid taxes, and for other reasons).

Any suggestions would be welcome. Thanks.

Even undocumented immigrants citizens pay taxes because its deducted from their income before payment how much more a citizen who is well documented. Another thing you need to know is that taxes arises on where the individual is resident and not its country of origin which means denouncing your citizenship does not exclude you from tax. Just find the accountant that would help you in tax planning rather than looking for ways to evade it.

Wait. What you're saying is that if I withdraw a portion of bitcoins (I myself don't own any) in Europe, I'd be taxed on them even if I held them for over 1 year, but bought them in another country originally? Or do I pay the tax in the country I now reside in, even though I just moved a few months ago?
How does that work? I'm now interested not just for my friend but for me as well because we are both in a similar boat, except he's planning to hide his funds and obtain another citizenship of a country where there's no capital gains tax and then withdraw a portion tax-free after renouncing. I'm definitely willing to pay taxes, but I'd like to pay less if I can. Why not? But I rather decide which country I give the money to. The U.S. is, without a doubt, a place that mismanages US citizens' funds and I will not be an accomplice.

[HeRetiK]

Even undocumented immigrants citizens pay taxes because its deducted from their income before payment how much more a citizen who is well documented. [...]

Are we still talking EU? EU employers will automatically deduct your taxes, that is correct, but as far as I know they can only do so with registered employees that have a working permit.

Wait. What you're saying is that if I withdraw a portion of bitcoins (I myself don't own any) in Europe, I'd be taxed on them even if I held them for over 1 year, but bought them in another country originally? Or do I pay the tax in the country I now reside in, even though I just moved a few months ago? [...]

1) Taxes on Bitcoin sales do not get automatically deducted in any European country, you will have to file tax reports yourself.

2) Taxes vary wildly between EU member states. Not just in regards to crypto. Be aware that the tax-free-after-1-year-of-holding rule only applies to a handful of countries (eg. Germany, Austria,... not sure where else). Selling before the 1 year holding is usually taxable as income tax (which also varies wildly between member states), selling after the holding period is usually taxable as capital gains tax (or not at all, if you're lucky). Either way, look closely into how each country handles taxation.

3) In which country you bought the Bitcoin originally doesn't matter. You should be able to prove holding time though. Arguably referring to the blockchain may suffice, but as far as I know there has been no precedence on how to report holding time correctly so far -- and you can also expect that what counts as proof for holding time will vary wildly between EU member states.

4) You pay tax in the country you reside in, assuming you have already taken full residency and have become a tax resident. At which point you become a tax resident depends on the country you move to and likely also where you are originally emigrating from (ie. immigrants from non-EU member states have to follow different rules than immigrants from EU member states. I wouldn't be surprised if there's a set of rules specifically for immigrants from the US). Prepare for paperwork as you likely won't become a tax resident automatically, but also will need to become a tax resident at one point to be allowed to legally stay there for a prolonged period of time -- assuming you don't have citizenship already.

[thomasjonestaxman]

Does anyone know of anyone who specializes in this as the Swiss bank industry used to? And assuming multiple citizenships, does that make any difference? Someone I know has an EU passport and a US passport available, but the US passport is going to the garbage bin in a few years (to avoid taxes, and for other reasons).

Any suggestions would be welcome. Thanks.

It really depends on the countries involved.  My firm works A LOT with international taxpayers and foreign investors, but as is typical with most US CPA firms, we handle the US reporting and work with a sister firm in the other country to handle reporting in that country.  The EU hasn't negotiated a single tax treaty with the US.  Instead, it's on a country-by-country basis.  I have clients throughout Europe in common business-partner countries (UK, Ireland, Germany, France, Netherlands, Luxembourg, Switzerland, etc.).  It adds an extra dimension of complexity and compliance to the US tax reporting.  Common reports and forms include FBAR, Forms 8938, 3520, 5471, W8-BEN, and 1042.

[Amnvex]

1) Taxes on Bitcoin sales do not get automatically deducted in any European country, you will have to file tax reports yourself.

So the banks don't rat you out as the U.S. banks do?

2) Taxes vary wildly between EU member states. Not just in regards to crypto. Be aware that the tax-free-after-1-year-of-holding rule only applies to a handful of countries (eg. Germany, Austria,... not sure where else). Selling before the 1 year holding is usually taxable as income tax (which also varies wildly between member states), selling after the holding period is usually taxable as capital gains tax (or not at all, if you're lucky). Either way, look closely into how each country handles taxation.

Yes, I know. Assuming it's one of the countries that do that, how would reporting work? I don't think you'd have to report then, right? Why do you say "if you're lucky?"

3) In which country you bought the Bitcoin originally doesn't matter. You should be able to prove holding time though. Arguably referring to the blockchain may suffice, but as far as I know there has been no precedence on how to report holding time correctly so far -- and you can also expect that what counts as proof for holding time will vary wildly between EU member states.

Well, has anyone reported time so far? Has it worked? What's the point of guidance on these things if a tax payer can't report it properly or it won't get accepted?

4) You pay tax in the country you reside in, assuming you have already taken full residency and have become a tax resident. At which point you become a tax resident depends on the country you move to and likely also where you are originally emigrating from (ie. immigrants from non-EU member states have to follow different rules than immigrants from EU member states. I wouldn't be surprised if there's a set of rules specifically for immigrants from the US). Prepare for paperwork as you likely won't become a tax resident automatically, but also will need to become a tax resident at one point to be allowed to legally stay there for a prolonged period of time -- assuming you don't have citizenship already.

That sounds insanely complicated... I have no idea how to go about this.

It really depends on the countries involved.  My firm works A LOT with international taxpayers and foreign investors, but as is typical with most US CPA firms, we handle the US reporting and work with a sister firm in the other country to handle reporting in that country.  The EU hasn't negotiated a single tax treaty with the US.  Instead, it's on a country-by-country basis.  I have clients throughout Europe in common business-partner countries (UK, Ireland, Germany, France, Netherlands, Luxembourg, Switzerland, etc.).  It adds an extra dimension of complexity and compliance to the US tax reporting.  Common reports and forms include FBAR, Forms 8938, 3520, 5471, W8-BEN, and 1042.

Which firm is this? Maybe I should consider using such a firm in the future when I want to cash out. I, personally, intend to "lose" certain citizenships. I'd need guidance on doing this and dealing with crypto in the future.

[HeRetiK]

1) Taxes on Bitcoin sales do not get automatically deducted in any European country, you will have to file tax reports yourself.

So the banks don't rat you out as the U.S. banks do?

What I mean is that I'm not aware of any broker that offers automatic taxation on Bitcoin trades (brokers and banks usually automatically deduct capital gains tax in case of funds and bonds for example).

This means you'll have to manually file tax reports (or have a tax advisor help you) and then pay taxes according to whatever tax rate applies to you.

Whether banks will report "shady" incoming transactions from crypto-exchanges or take action on it will depend on the bank. Usually has nothing to do with taxation though, rather with worries about money laundering and such.

2) Taxes vary wildly between EU member states. Not just in regards to crypto. Be aware that the tax-free-after-1-year-of-holding rule only applies to a handful of countries (eg. Germany, Austria,... not sure where else). Selling before the 1 year holding is usually taxable as income tax (which also varies wildly between member states), selling after the holding period is usually taxable as capital gains tax (or not at all, if you're lucky). Either way, look closely into how each country handles taxation.

Yes, I know. Assuming it's one of the countries that do that, how would reporting work? I don't think you'd have to report then, right? Why do you say "if you're lucky?"

With "lucky" i mean if you're lucky to be tax resident of one of the countries that don't tax Bitcoin gains after the 1 year holding period

If you're a tax resident of Germany or Austria and are not required to pay taxes due to the 1 year holding period... you're also not required to report anything. It supposedly may prevent you some paperwork a couple years down, but in principle you're not obliged to report those gains.

If you have to pay income tax because you sold prior to the 1 year holding period, you need to fill out the respective income tax forms and the ministry of finance will tell you how much tax you owe. Of course you could just... not report it... but then if they find out you'll be on the hook for tax evasion.

I can only talk about Austria and Germany though, as I'm a tax resident of the former and have some connections to the latter. Other European countries may handle this differently.

3) In which country you bought the Bitcoin originally doesn't matter. You should be able to prove holding time though. Arguably referring to the blockchain may suffice, but as far as I know there has been no precedence on how to report holding time correctly so far -- and you can also expect that what counts as proof for holding time will vary wildly between EU member states.

Well, has anyone reported time so far? Has it worked? What's the point of guidance on these things if a tax payer can't report it properly or it won't get accepted?

¯\_(ツ)_/¯

I'm afraid we're on uncharted territory, my friend.

4) You pay tax in the country you reside in, assuming you have already taken full residency and have become a tax resident. At which point you become a tax resident depends on the country you move to and likely also where you are originally emigrating from (ie. immigrants from non-EU member states have to follow different rules than immigrants from EU member states. I wouldn't be surprised if there's a set of rules specifically for immigrants from the US). Prepare for paperwork as you likely won't become a tax resident automatically, but also will need to become a tax resident at one point to be allowed to legally stay there for a prolonged period of time -- assuming you don't have citizenship already.

That sounds insanely complicated... I have no idea how to go about this.

It's simple in that the basic principle is that you have to pay taxes in the country that you live in. It's complicated in that each European country handles immigration differently. If you pick one country and really look into it, the process should be rather straightforward.

[Amnvex]

1) Taxes on Bitcoin sales do not get automatically deducted in any European country, you will have to file tax reports yourself.

So the banks don't rat you out as the U.S. banks do?

What I mean is that I'm not aware of any broker that offers automatic taxation on Bitcoin trades (brokers and banks usually automatically deduct capital gains tax in case of funds and bonds for example).

This means you'll have to manually file tax reports (or have a tax advisor help you) and then pay taxes according to whatever tax rate applies to you.

Whether banks will report "shady" incoming transactions from crypto-exchanges or take action on it will depend on the bank. Usually has nothing to do with taxation though, rather with worries about money laundering and such.

2) Taxes vary wildly between EU member states. Not just in regards to crypto. Be aware that the tax-free-after-1-year-of-holding rule only applies to a handful of countries (eg. Germany, Austria,... not sure where else). Selling before the 1 year holding is usually taxable as income tax (which also varies wildly between member states), selling after the holding period is usually taxable as capital gains tax (or not at all, if you're lucky). Either way, look closely into how each country handles taxation.

Yes, I know. Assuming it's one of the countries that do that, how would reporting work? I don't think you'd have to report then, right? Why do you say "if you're lucky?"

With "lucky" i mean if you're lucky to be tax resident of one of the countries that don't tax Bitcoin gains after the 1 year holding period

If you're a tax resident of Germany or Austria and are not required to pay taxes due to the 1 year holding period... you're also not required to report anything. It supposedly may prevent you some paperwork a couple years down, but in principle you're not obliged to report those gains.

If you have to pay income tax because you sold prior to the 1 year holding period, you need to fill out the respective income tax forms and the ministry of finance will tell you how much tax you owe. Of course you could just... not report it... but then if they find out you'll be on the hook for tax evasion.

I can only talk about Austria and Germany though, as I'm a tax resident of the former and have some connections to the latter. Other European countries may handle this differently.

3) In which country you bought the Bitcoin originally doesn't matter. You should be able to prove holding time though. Arguably referring to the blockchain may suffice, but as far as I know there has been no precedence on how to report holding time correctly so far -- and you can also expect that what counts as proof for holding time will vary wildly between EU member states.

Well, has anyone reported time so far? Has it worked? What's the point of guidance on these things if a tax payer can't report it properly or it won't get accepted?

¯\_(ツ)_/¯

I'm afraid we're on uncharted territory, my friend.

4) You pay tax in the country you reside in, assuming you have already taken full residency and have become a tax resident. At which point you become a tax resident depends on the country you move to and likely also where you are originally emigrating from (ie. immigrants from non-EU member states have to follow different rules than immigrants from EU member states. I wouldn't be surprised if there's a set of rules specifically for immigrants from the US). Prepare for paperwork as you likely won't become a tax resident automatically, but also will need to become a tax resident at one point to be allowed to legally stay there for a prolonged period of time -- assuming you don't have citizenship already.

That sounds insanely complicated... I have no idea how to go about this.

It's simple in that the basic principle is that you have to pay taxes in the country that you live in. It's complicated in that each European country handles immigration differently. If you pick one country and really look into it, the process should be rather straightforward.

Wow, super useful. Ok. Then I guess when I follow my friend's path of handing in my passport, it'll be over 1 year of holding and then I can't legally be a resident of the previous country, so... I'll end up withdrawing in a country that has the past-1-year-holding policy. Thanks for the info! Really appreciated.

[HeRetiK]

Wow, super useful. Ok. Then I guess when I follow my friend's path of handing in my passport, it'll be over 1 year of holding and then I can't legally be a resident of the previous country, so... I'll end up withdrawing in a country that has the past-1-year-holding policy. Thanks for the info! Really appreciated.

You're welcome.

Make sure to get some professional advice as well (or at least to do some further research), as I can only speak as someone living in the EU and not as an expert.

Also I wouldn't be surprised if we see changes regarding Bitcoin taxation in the next 2-3 years. It's still a fairly new matter and classifications may change, so keep an eye out for that.

[thomasjonestaxman]

Which firm is this? Maybe I should consider using such a firm in the future when I want to cash out. I, personally, intend to "lose" certain citizenships. I'd need guidance on doing this and dealing with crypto in the future.

www.sweeneyconrad.com

www.linkedin.com/in/thomasjonestaxman

Citizenship planning is probably better suited for an expat attorney, but taxes certainly is our specialty.

[Amnvex]

You're welcome.

Make sure to get some professional advice as well (or at least to do some further research), as I can only speak as someone living in the EU and not as an expert.

Also I wouldn't be surprised if we see changes regarding Bitcoin taxation in the next 2-3 years. It's still a fairly new matter and classifications may change, so keep an eye out for that.

Yeah, I will have to. Maybe when I move out of the country I'll go seek info from professionals--now is too early. The US is incredibly slow at figuring things out and issuing information--I have no faith in the system.

www.sweeneyconrad.com

www.linkedin.com/in/thomasjonestaxman

Citizenship planning is probably better suited for an expat attorney, but taxes certainly is our specialty.

I see. Question, then: does this mean I should look for an expat attorney when it comes to filing the renunciation taxes, too, or can that be done with your firm? Is that even necessary to do in general? What is the IRS going to do if you don't? They don't even have the man-power to come after people, and if you change your nationality with a modification to your name, how are they going to find out? Also, what if you renounce and don't make them aware of your cryptocurrency holdings? Not like they can figure out which wallet is yours if you don't willingly come forward, eh?