Is Taxing Bitcoins Possible?

[anti-scam]

This may be a solution for bitcoin holders to have an important role in building the country's economy, gaining government benefits and creating regulations that protect crypto users.
The problem is, how to determine the tax limit to be paid, because the bitcoin price is uncertain.

[Deshauna]

this is the major problem for the bitcoin. And this is why many countries are denying crypto in their country. But other country also requires you to give identity if you are into bitcoin. And for me, that is better for me than banning bitcoin.

[Zebra.Guy]

well I am reading in some other thread that bittrex asked its members to provide the selfie and the scan of a driving licence in order to withdraw funds. Try not to pay taxes if they have your selfie already...

[Jemzx00]

I have been thinking of this for long and the reason being that a lot of bitcoin transaction is going online everyday in many countries and i think government can generate IGR from this if possible. I am not a programmer and i have a little knowledge about bitcoin technologies but i just want to know if it is possible.

Directly taxing bitcoin is a bit impossible due to its decentralized nature. There's nothing the government can do about it. But there are different ways the government can put tax when it comes to bitcoin. Government can monitor and tax all apps and wallets that we use for bitcoin related transactions. Companies who develops the wallet are probably required to pay their taxes and in that way they put tax on every transaction of its user by adding it to the amount of transaction fee that they have to pay.

[jekzy]

it's possible if the goverment  in your country apporved it

[Zebra.Guy]

it's possible if the goverment  in your country apporved it

my friend had some income in US and it was very very small so he forgot about it completely, until the letter from his country (non-US) tax authority arrived and they told him: "hey, you had this income in US. Why don't you tax it with us too?" and then he remembered. He paid the due tax, it was no big deal, the sum was very low. What I want to tell, is that it is not necessarily your country that must implement measures to tax bitcoin, but if you use the US-based exchange than you are in trouble too, your country may/will learn about it, because US has already implemented such measures (KYC and others) and the tax authorities collaborate very closely.

[LogitechMouse]

Nobody can do that. Taxing bitcoins is impossible because bitcoin is decentralized so who will get the tax? Governments? Nahhh... The exchanges and the regulators maybe they can get tax with them but to bitcoin holdlers is just impossible.

[Zebra.Guy]

Nobody can do that. Taxing bitcoins is impossible because bitcoin is decentralized so who will get the tax? Governments? Nahhh... The exchanges and the regulators maybe they can get tax with them but to bitcoin holdlers is just impossible.

well I am sure that you know that currently you cannot exchange your bitcoins to fiat without providing like a scan of your driver's licence to the exchange ?

[Stimah24]

Well, I'll say it will be very impossible to tax bitcoin because its a type of digital currencies and sometimes regards as asset, if there will be a such law by a government of any country, they will have to considered the cost of collection to the tax hoping to collect, while I think that the cost would be exorbitant.

[bitbunnny]

Nobody can do that. Taxing bitcoins is impossible because bitcoin is decentralized so who will get the tax? Governments? Nahhh... The exchanges and the regulators maybe they can get tax with them but to bitcoin holdlers is just impossible.

This is not quite true.
Bitcoin transactions and profit from them are already taxed in many countries. Maybe Bitcoin itself as a coin can't be taxed, or in a very hard and unefficient way, but the income that you get from it can. It's written in many existing laws in many countries. You have the duty to report Bitcoin trading income to your tax authorities.

[gambitcoin53]

I have been thinking of this for long and the reason being that a lot of bitcoin transaction is going online everyday in many countries and i think government can generate IGR from this if possible. I am not a programmer and i have a little knowledge about bitcoin technologies but i just want to know if it is possible.

I think for now it is impossible as bitcoin was not yet being regulated by any country, this tax thing is per country, i mean it depends on each country on how they deal with bitcoin transactions, they have a problem with the anonimity of bitcoin users who enter a transaction via blockchain. I think as long as there is blockchain, it is difficult for any country to identify an individual and how much they will taxed them, taxation is based on the amount of money being held by a person, but i think if bitcoin will grow and transactions will be a common thing, maybe someday all countries will have to sit on that issue.

[jpespa]

Well it would be possible if the government is really dedicated to implement that law but it can only happen with their own country but I wonder how will they be able to do it if bitcoin is decentralized and only uses wallet address to transact with another bitcoin user. I guess it would give disadvantage to the people living in that country because they will shoulder more expenses.

[Siopao]

Bitcoin is decentralized and it would be hard for a government to impose tax to bitcoin. It is impossible to trace a certain transaction and of whose transaction is it. So it would be hard to put tax unless if a bitcoin holder would declare his bitcoin earnings and submit its equivalent tax as whatvis stated in their local law.

[Beehives]

I have been thinking of this for long and the reason being that a lot of bitcoin transaction is going online everyday in many countries and i think government can generate IGR from this if possible. I am not a programmer and i have a little knowledge about bitcoin technologies but i just want to know if it is possible.

Taxing of bitcoin is possible.  In fact some country already did it.  They get the tax at the transaction but not the btc itself. For example your money from btc they get the tax in the bank as per the bank laws.
For direct taxing of btc they need to draft a law on it. Taxing btc it is better and all will benefit. The threat of banning crypto will be gone.

[jimskiy]

it will be taxing bitcoin possible by using the same wallet bitcoin passenger and the taxi driver, there are will not fee for transaction the exchange, usually in indonesian using the same wallet like vip bitcoin.co.id and the global exchange you can use coinbase.com so it will be nothing fee for transaction. the same wallet using by driver and passenger it will be no fee so the taxing bitcoin wallet will be possible and all of bitcoin rule have the support form the permission off government.

[prix]

It's impossible. First due pseudoanonymous nature of Bitcoin, second due the impossibility of accurately establishing the economic nature of transactions (trading, sending, outputs integration, etc.).
I think it's better for the government to take the tax when fiat money withdrawing through exchange, maybe even when buying goods (taking into account the amount of fiat money entered into the system).

exactly that they are doing - they are applying the tax when the bitcoin is exchanged to fiat. It is called a capital gains tax. So why are you saying it is impossible in your first paragraph, if they are effectively doing it and you yourself admit it?

As I understand the topic starter talks about crypto-to-crypto transactions. Not crypto-to-fiat.

I have been thinking of this for long and the reason being that a lot of bitcoin transaction is going online everyday in many countries and i think government can generate IGR from this if possible. I am not a programmer and i have a little knowledge about bitcoin technologies but i just want to know if it is possible.

[greenclub09]

yeah, probably because the rightnow bitcoin is anonymous, there are no government can trace out bitcoin users and track them out, but the government
now can charge taxes on us because the willingly of the people. the blockchain system has been working so perfect that every transactions on the internet can hardly be controlled by governments. unless bitcoin is centralized in the future, bitcoin will never be taxed.

[aizen10]

bitcoin is decentralized, meaning there are no one managing/manipulate bitcoin. even the creator of bitcoin has no access to manage this bitcoin and implement some taxes inside this program. the only possible things to implement taxes is from the outside of blockchain which is you exchange sites, and local bitcoin exchange outlets.

[mainstreamcoin]

I have been thinking of this for long and the reason being that a lot of bitcoin transaction is going online everyday in many countries and i think government can generate IGR from this if possible. I am not a programmer and i have a little knowledge about bitcoin technologies but i just want to know if it is possible.

well, tax by what?
By the income that investers have earn?
On what rate?

[Novafacepoke]

I have been thinking of this for long and the reason being that a lot of bitcoin transaction is going online everyday in many countries and i think government can generate IGR from this if possible. I am not a programmer and i have a little knowledge about bitcoin technologies but i just want to know if it is possible.

it looks like impossible now for lots of government right now deny its legality