Taxes on crypto

[safelycrypto]

If there is a country where cryptocurrency is legal how much is the tax that we have to pay to the government? Also, how can the government track our transactions?

[PrimeNumber7]

This depends entirely on the country you are in.

In the US, I pay taxes on any income I earn, including when I earn a salary/income and am paid in bitcoin. When I spend my bitcoin, I pay capital gains taxes on the difference in value between that of what I paid for the bitcoin I spent, and the fair market value of what I am buying.

[figmentofmyass]

If there is a country where cryptocurrency is legal how much is the tax that we have to pay to the government?

every country has different rules and tax rates. some jurisdictions have no capital gains tax at all. for instance, residents of puerto rico legally pay zero capital gains tax. (although if you move there and then realize past gains, there is a 5% tax during your first 10 years of residency)

Also, how can the government track our transactions?

the easiest way is through regulated channels like exchanges. when you complete KYC with an exchange, they have eyes on the crypto you bring in and out of the exchange. governments also engage with blockchain analysis companies who work to identify your activity even when they aren't directly related to your use of exchanges and other KYC services.

[DdmrDdmr]

<...>

As stated above, every country deals with the taxes on crypto it in different ways. In my country for example the applied tax rate is generally between 19% and 23% (depending on the amount you converted to FIAT), but the status of applying tax is rather incipient, and there seem to be no clear guidelines that apply to all possible scenarios.

Theoretically, having obtained BTC in each one of these scenarios may have a different tax solution:
-   Profit made on trading.
-   Profit made on mining.
-   Profit made on purchase+hold+sell.
-   Profit made on campaigns.

The tax range and required documentation to keep varies in each of these scenarios, and it may well depend of the specific tax inspector you are talking to.
This year, the tax office has emailed 14.700 people warning them that their crypto gains must be declared. Those people seem to be a subset (not all) of the ones that dealt with an exchange, and they did not necessarily convert to FIAT in order to receive the warning (theoretically, trading is also taxed, even if you don’t convert to FIAT – based on the value gained as a result).

Theoretically, if you do not convert back to FIAT you don’t have to pay taxes (yet), but the increments in position due to trading is, theoretically, subject to taxation too.

The tracking starts when you transact between your bank account and the account of an exchange (not all, but at least some are tagged as FIAT TXs related to crypto portafolios).

<…> i just saw that taxes on cryptos is already available and on which city that you live now with that rules above?

Sunny Spain (city is irrelevant as the norm is countrywide). The thing to take into consideration is that many people are likely holders, and have not converted to FIAT yet, thus more or less postponing the tax procedure. Traders are another matter (as I stated, in theory they should declare for increased values of portfolio due to trading, even if they do not convert to FIAT – similar to dealing with shares).

[LeGaulois]

Taxes in my country have a similar system as @DdmrDdmr described, it depends on how it comes. Now I'm going to sell you something, believe me, it's true, we are now supposed to report any account open with a crypto exchange (Coinbase, Binance and so on), web wallets too. The irony is we don't have any proper form to report correctly. If you don't report an account, if you forgot, or give wrong information you are eligible for a fine up to 750€ per account not reported or wrongly.

So now all of us are reporting as we can and save as much information as we can in case we have a check. Look for example we need to provide the bank address of the exchange, and it happened when we asked the exchange refused to tell us

[coine]

how track our transactions  cex to bank transaction can to track or not  and how to we safe

[feryjhie]

<...>

As stated above, every country deals with the taxes on crypto it in different ways. In my country for example the applied tax rate is generally between 19% and 23% (depending on the amount you converted to FIAT), but the status of applying tax is rather incipient, and there seem to be no clear guidelines that apply to all possible scenarios.

Theoretically, having obtained BTC in each one of these scenarios may have a different tax solution:
-   Profit made on trading.
-   Profit made on mining.
-   Profit made on purchase+hold+sell.
-   Profit made on campaigns.

The tax range and required documentation to keep varies in each of these scenarios, and it may well depend of the specific tax inspector you are talking to.
This year, the tax office has emailed 14.700 people warning them that their crypto gains must be declared. Those people seem to be a subset (not all) of the ones that dealt with an exchange, and they did not necessarily convert to FIAT in order to receive the warning (theoretically, trading is also taxed, even if you don’t convert to FIAT – based on the value gained as a result).

Theoretically, if you do not convert back to FIAT you don’t have to pay taxes (yet), but the increments in position due to trading is, theoretically, subject to taxation too.

The tracking starts when you transact between your bank account and the account of an exchange (not all, but at least some are tagged as FIAT TXs related to crypto portafolios).

i just saw that taxes on cryptos is already available and on which city that you live now with that rules above?

[Kakmakr]

Well there are many countries in the world where Bitcoin is legal and they tax Bitcoin differently, depending on how they define Bitcoin in their country. So let's say your country defined Bitcoin as a currency, then you might have to pay VAT on all transactions that are made with Bitcoin, because it is then seen as a currency payment.

They might define it as a commodity and in cases like this most countries apply capital gain taxes on the portion of the profit that you made. <Example : You bought 1 bitcoin when the  price was $8000 and sold it when it got to $9000... so you only get taxed on the $1000 profit you made at the rate that are applicable to capital gain taxes in your country.

Hope you understand. 

[bitmover]

In Brazil you have to pay 15% on capital gains.
However, zif you sell less than 8k usd (approximately)per month you don't have to pay tazes. On that month. If your monthly volume is higher than that, you have to pay 15%

[dothebeats]

In the country I'm currently staying at, the government hasn't come into full agreement on whether they are going to tax cryptocurrencies or not. But anyway, I'm inclined to believe that crypto profits can be categorized on the same category where capital gains lie, and for most countries where crypto regulations and taxation are already in place, this is what they follow, too. But then again, this is still somewhat a vague topic not unless countries officially release a framework in taxation for cryptocurrencies.

[RodeoX]

In the USA you will owe CAPITOL GAINS tax on the growth in value if you sell your coins. It varies depending on your tax bracket and the state you live in. It could be as high as 20% or as low as 0%. Typically you should expect to pay about 15%. The good news is that you likely pay twice that for the money you earn at work.

[Mike Mayor]

My friend. You seem worried or scared or perhaps paranoid? I promise you the government has no concern for you or most crypto exchanges. You not a criminal you not on their radar. People overreact and go crazy.
I promise you the government takes time even to track normal public in your face fiat transactions.

I will try make this very simple for you.

Crypto is something given out by a program called the blockchain and people who help the network (miners) get a share. The crypto has a value based on the amount of pc power taken to mine. But not only!! It has a value because we as users say it does. So we trade among ourselves in the same way we use fiat. BUt it is not fiat so remember that. Bitcoin and crypto is not official currency. Nor recognised by the goverment. It is an external publically made and publically supported "asset/curreny"

Being as such there is no tax to pay on crypto. The tax you do pay is on the purchases you make. The V.A.T (value added tax). There is no other tax like with fiat since it is not issued by the goverment or agency of the government but rather publically through the blockchain.

You only pay tax on crypto - fiat transaction since you are now going from decentralized unowned currency to a government-issued "owned" currency and thus must obey the laws for that currency which means paying tax.
So you will pay capital gains tax on the crypto - fiat transaction as many posters above me have already explained I will not explain again.

You really shouldn't be selling crypto for fiat anyway. You pay tax and you give some of the crypto profits back to the government which is what we trying to prevent. Only go to fiat if you have to. If you can use crypto then use it.

[squatter]

I noticed where cryptocurrency is legal higher taxes. in the gray zone as in my country there is no law yet but there is no tax

Are you sure there is no tax? I get the feeling some people are assuming taxes aren't due simply because there are no cryptocurrency-specific regulations in their country. However, in many countries, realizing capital gains on property sold is already covered by the tax code.

If you haven't researched the law or talked to a tax advisor, I wouldn't just assume you never need to pay taxes.

[imstillthebest]

im a country where cryptos are fully legal but i dont hear anyone is being taxed of using a crypto  . i think we can only be taxed when using a wallet or exchanges but this is not really a country specific because they are online and anyone can use it internationally  .

maybe we can get taxed when buying goods locally on a store that accepts crypto payments but this is also normal because any goods that you can bought locally using any medium do also have a  tax . 

[gentlemand]

Also, how can the government track our transactions?

In most countries tax is taken on trust. You declare it, calculate it and pay it. No one has the time or interest to track everything. If they believe there's an anomaly then they'll start to properly investigate things.

[LeGaulois]

Also, how can the government track our transactions?

In most countries tax is taken on trust. You declare it, calculate it and pay it. No one has the time or interest to track everything. If they believe there's an anomaly then they'll start to properly investigate things.

It's automatically checked with data they also have during the year It's quite easy. They just wait for citizens to report wrongly and then start to get manually after you (sending you a letter, etc) In my country, the Taxes authorities hired developers and now use Big Data with algorithms.
All agents say it's so awesome. and it will be pretty easy to include crypto in.
On top of that now taxes are paid every month, deduced from your salary, making it harder to cheat.

[yohananaomi]

If there is a country where cryptocurrency is legal how much is the tax that we have to pay to the government? Also, how can the government track our transactions?

Actually, if indeed crypto is legal in a country, of course there are rules and regulations that have been regulated, in fact, if you want to be taxed from crypto receipts, it can be made when exchanging fiat on banks directly taxed directly. in fact, with the tax regulated, crypto participants actually have protection.

[timerland]

Contrary to popular belief, most countries in the world are neutral to BTC or deem BTC as legal.

Of course, you need to fulfill your taxation obligations as a result. This solely depends on your jurisdiction, and you'll have clear info listed out for you in your country's tax agency. But the thing that is generally accepted standard essentially is that BTC income will still be filed as income, and you're likely to be expected to pay CGT.

Also, how can the government track our transactions?

They can only really track any transaction with precision if it's been through a regulated exchange that actively reports back to them. That said though, I think that in the future they'll come up with more methods of tracing, though there will always be limitations due to the pseudo-anonymous nature of addresses.

[marcbitcoins]

If there is a country where cryptocurrency is legal how much is the tax that we have to pay to the government? Also, how can the government track our transactions?

There are lot of countries that Bitcoin is declared legal and Bitcoin taxes will depend upon the regulation that imposed by every government as there are countries that declared Bitcoin is free of tax like France and Japan. Here are the link for your reference of Bitcoin status on every country. https://en.m.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory

[Harlot]

Also, how can the government track our transactions?

That's what KYCs are for. Ever wonder why exchanges are asking for your KYC? It's really because for the government to track you and all the things that go in that exchange. Some governments even go as far as requiring the exchange to alert them when an unusual amount of money is going in and out of the exchange, they are also requiring them to send some random transactions from random users to see on how they earn (lose) money. Aside from that you are also in charge of documenting every gain/loss you have from every trade so that you yourself know how much you will pay depending on what tax rate you are in.