Crypto Taxation

[FlightyPouch]

Because the government sees that bitcoin or other cryptocurrency is doing well specially today that we are facing a pandemic and digital transactions helps a lot for us to prevent from getting infected of the virus, so they want to impose tax even though bitcoin is decentralized. But if it's really necessary,they should just impose it fairly and correctly.
 

Desperate times calls for desperate measures as they say it. I know that the government are having a hard time managing funds left and right but I think crypto currencies would be out of this matter. One of the officials of DENR (DEPARTMENT OF ENVIRONMENT AND RESOURCES), capslock intended, want to reopen closed mines. The first lines says it all but is it really necessary?

This just proves that they will not be counting crypto currencies as a source of the tax they are getting since they will be looking closer to what more they can abuse now.

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[Metazen]

No bank or government authority controls it as they do with traditional currencies. If you have used cryptocurrency this year, what are the implications for when you file your taxes..If you’re selling property as a part of a business or trade,the property is not considered a capital asset and is taxed as ordinary income. This applies to virtual currency sales, too. The IRS looks at the “character” of the gain or loss—your intent, or why you’re selling.

[Abiky]

Agreed, and myself used to think the taxation in my country. For what we pay we aren't getting anything perfect from the government. The government wants the people's money, and they never think of the people. They work for the rich and the corporate. Then why should I pay tax, and this is how the mind of people change and tries to evade tax.

When it comes to cryptocurrency, why people should pay when government hasn't got anything to do with it. As it is anonymous it is hard to collect data for taxation. Anyhow it is the interest of each ans every government.

The government just wants to take advantage of the ever-increasing prices of crypto on the market. They see a huge opportunity to increase their income by collecting taxes from their citizens. Some countries have gone far by implementing a high tax percentage on crypto income. South Korea is a good example of this. As long as crypto is taxed fairly, there should be nothing to worry about. Otherwise, crypto's adoption in the mainstream world will diminish by a large margin. The fact that transparent cryptocurrencies like Bitcoin and Ethereum are easily taxable, has paved the way for mainstream exchanges to adopt them at a large scale. Privacy coins, on the other hand, are in big trouble as the list of exchanges de-listing them is growing over time. What can't be taxed, will quickly see disapproval from governments worldwide. This means that as long as privacy coins are nearly impossible to enforce taxation, transparent cryptocurrencies will gain all the attention in the mainstream world.

In the end, people will decide whenever they'd want to pay taxes from their crypto income or avoid using it altogether. I think that more people will avoid using crypto as governments become strict in their tax collecting practices. Not all governments will be this way though, which means that crypto will still experience growth in mainstream adoption albeit at a slow and steady phase than usual. Just my thoughts

[radjie]

government participation in crypto is actually not transparent, the government only wants to take advantage of crypto by setting taxes that must be issued by each user through local exchange, even the government has supported local exchanges to turn Bitcoin into Fiat and behind all this there are black and white provisions ( official cooperation) between the government and related local exchange management.

[Abiky]

government participation in crypto is actually not transparent, the government only wants to take advantage of crypto by setting taxes that must be issued by each user through local exchange, even the government has supported local exchanges to turn Bitcoin into Fiat and behind all this there are black and white provisions ( official cooperation) between the government and related local exchange management.

Exactly. Taxation is successfully achieved via centralized exchanges. It's this reason why governments support these type of exchanges over decentralized ones. Transparent cryptocurrencies like Bitcoin and Ethereum will see the approval of governments worldwide, as they're easy to track & trace for taxation purposes. Privacy coins, on the other hand, will see constant opposition to a point where they'll become "illegal" to use in the mainstream world. Even decentralized exchanges may become "illegal" to use in the future. While it'll still be possible to use them "under the table", most people will use centralized exchanges and transparent cryptocurrencies because of their legitimacy in the mainstream world.

As responsible citizens, it's important to comply with the law. You must pay your crypto taxes to the government, if you cash out to Fiat. Doing the contrary, will lead you towards fines or even jail time. Most people don't want to face these consequences, so they'll end up paying their taxes in return. As long as people and the government collaborate, the crypto/Blockchain industry will thrive. Efficiently taxing cryptocurrencies will pave the way towards recognizing the industry's legitimacy in the mainstream world. Which means, institutional investors will find crypto extremely attractive resulting in higher demand (and prices) on the market. Just my opinion

[CryptoSites]

You must pay your crypto taxes to the government, if you cash out to Fiat.

Most countries will actually tax you upon any trade. BTC to ETH would be considered a sale of BTC to fiat then a fiat purchase of ETH. It gets complicated when you start talking about BTC to LN, especially when it's not your own channel.

[Maslate]

government participation in crypto is actually not transparent, the government only wants to take advantage of crypto by setting taxes that must be issued by each user through local exchange, even the government has supported local exchanges to turn Bitcoin into Fiat and behind all this there are black and white provisions ( official cooperation) between the government and related local exchange management.

Your opinion is correct, they are too focused on the tax but not on the regulation to minimize the risk of investing in the market.

Not really what we are expecting, it looks they just want for us to have a responsibility to them but they don't give something to us to improve the market.

If they can only make this market more secure, many investors will not be afraid to risk their money, and it's a win-win situation as the increase of adoption will certainly result to the increase of their revenue, are they thinking of that?

[JuSayCo]

If you cash out, then it can be considered as a capital gain (if you receive profit, bought < sold), and capital gain is taxable. Well, when we are dealing with the government, the only options would be (1) pay taxes, or (2) get fined/banned.

I think taxation is generally better than prohibition.

I agree. Bitcoin taxation is a big help to the Government and to the country's economy as a whole. If the Country accepted and believes the usage of Bitcoin and other crypto currencies and legalized it. Then, they have all the right to get benefits from it in return. And that is by imposing tax just like the other businesses and industries.

[Xembin]

In some countries, government is likely to take over crypto currency by using the profit to develop their environment. Government don't joke with tax they would like to force taxes to people to make their money.

[Dorodha]

While the governments of a few nations impose taxes at the human beings to enhance their surroundings and economy, this isn't always feasible withinside the case of crypto. Crypto decentralization isn't always beneathneath anyone's control. Not all of us is compelled to make a earnings as they wish. The authorities can't receive any tax from now on this is why many nations do now no longer aid crypto and perform it as illegal. But making an investment in crypto allows enhance a country's economy.

[Mauser]

While the governments of a few nations impose taxes at the human beings to enhance their surroundings and economy, this isn't always feasible withinside the case of crypto. Crypto decentralization isn't always beneathneath anyone's control. Not all of us is compelled to make a earnings as they wish. The authorities can't receive any tax from now on this is why many nations do now no longer aid crypto and perform it as illegal. But making an investment in crypto allows enhance a country's economy.

As far as I see the tax aspect of cryptos it's very similiar to investing in stocks. You should not report any unrealized gains in change of our holdings. But if you sell your coins and make a nice profit you should definitely mention it in your tax returns. For me my online wallet is similar to the hidden swiss bank accounts from 50 years ago. No one knew you had them and governments couldn't check it either. But if you start keeping everything a secret you might be in trouble in 10-15 years down the road when you want to get some money back into FIAT. For me it's just not worth it to try and hide everything from the government.

[Maslate]

While the governments of a few nations impose taxes at the human beings to enhance their surroundings and economy, this isn't always feasible withinside the case of crypto. Crypto decentralization isn't always beneathneath anyone's control. Not all of us is compelled to make a earnings as they wish. The authorities can't receive any tax from now on this is why many nations do now no longer aid crypto and perform it as illegal. But making an investment in crypto allows enhance a country's economy.

As far as I see the tax aspect of cryptos it's very similiar to investing in stocks. You should not report any unrealized gains in change of our holdings. But if you sell your coins and make a nice profit you should definitely mention it in your tax returns. For me my online wallet is similar to the hidden swiss bank accounts from 50 years ago. No one knew you had them and governments couldn't check it either. But if you start keeping everything a secret you might be in trouble in 10-15 years down the road when you want to get some money back into FIAT. For me it's just not worth it to try and hide everything from the government.

You better know the law in your country so you'll be able to manage the risk if ever you think of hiding your bitcoin.
Tax evasion is a serious offense or a crime, it's publishable by law and you could go into prison when proven committing a crime.

That's why it's necessary to know the sanction so you can do the right approach.

If possible you can avoid tax, that's better but you need to hire an accountant to do the job for you, that is not illegal.

[Abiky]

Most countries will actually tax you upon any trade. BTC to ETH would be considered a sale of BTC to fiat then a fiat purchase of ETH. It gets complicated when you start talking about BTC to LN, especially when it's not your own channel.

If that's the case, then crypto taxation is being unfairly done. Governments should have no jurisdiction over a decentralized, distributed network. If people don't protest against these actions, countries collecting taxes from crypto-to-crypto transactions will continue with the endeavor. I have nothing against crypto taxation as long as it's done in a fair manner. After all, it's the citizen's responsibility to pay his/her taxes to obey the law. Otherwise, you'll be subject to fines or even jail time. While most transparent cryptocurrencies are easier for governments to collect taxes from, they can also do the same with privacy coins if they're traded on centralized exchanges.

As far as the LN goes, it's much easier to tax off-chain Bitcoin transactions because channels are directly linked to LN nodes with publicly available IP addresses. Developers may need to integrate privacy solutions in order to prevent this. But seeing cases where certain developers have been fined by the government (like the case of EtherDelta), could bring a lot of problems to a privacy-oriented version of the LN. It's like developers are being held liable for their actions. This could question decentralization itself as we know it. Just my opinion

[yulchatar]

In many countries, such types of taxation of cryptocurrencies as VAT and sales tax have been excluded. But some types of taxes do exist and they also differ for individuals and legal entities. As for the authorities, it is no longer a secret for anyone that popular exchanges where buy and sell cryptocurrency are increasingly exchanging information and cooperating with the governments of countries.

[jasmeet kaur]

is it true that crypto taxation cost too much in india??

[dansus021]

i dont agree since bitcoin is decentralized without interference of any gorvenment

unless you have a big minifarm or company who's make coin in a city or country. small player no needed cause we pay electricty and buy some product there's already tax on it

[Text]

is it true that crypto taxation cost too much in india??

I asked the Indians who were in my contacts. Some have said yes, others do not and there are also others who do not know. Maybe because those who said no or do not know maybe they do not use services or even cash out bitcoin to fiat currency.

Here are some of their responses:
- As per government policy, it's high
- I don't know about the matter, Maybe
- If you withdraw huge money through a bank then a tax could be 20%. More than 50k, it will be captured in income tax, 50k in equivalent
- Before a little bit only, Nowadays many service tax deduction for the exchange apps
- I think so, I don't know
- Not that much but till now am just received a small amount of bitcoin only trying to get more
- Yes, It's just regulated, so the government going to make a law before March, BTC is illegal so it's new for Indian exchange, so they anything they want. Illiterate people in India don't know Blockchain, many scams occur in name of BTC, a Ponzi scheme, HYIP plans, and altcoins make scam so India banned in 2017 and again regulate it march 2020 after winning in courts

[Mauser]

i dont agree since bitcoin is decentralized without interference of any gorvenment

unless you have a big minifarm or company who's make coin in a city or country. small player no needed cause we pay electricty and buy some product there's already tax on it

But don't forget that you can make a lot of money with alt coins. Let's say you get really lucky in one year and make 100-200% return on your coins and covert them back into FIAT, some form of taxation would need to happen. I think taxation shouldn't happen as long as you hold crypto currencies. Taxes should only be taken into consideration when you convert cryptos into FIAT.

[dondonk]

In my opinion, if the income from crypto is large enough and stable per month, the government may impose taxes on our crypto income, meaning that the tax is based on fiat currency resulting from the withdrawal of exchangers.

[Abiky]

In many countries, such types of taxation of cryptocurrencies as VAT and sales tax have been excluded. But some types of taxes do exist and they also differ for individuals and legal entities. As for the authorities, it is no longer a secret for anyone that popular exchanges where buy and sell cryptocurrency are increasingly exchanging information and cooperating with the governments of countries.

We have to admit that there are countries which are friendly towards crypto, while some of them are not. Tax laws vary among different countries in the mainstream world. Some are fair in their taxation practices, while others are not. Given that most governments have started taxing crypto transactions from everyday people, we can assume that the industry is already legitimized. It would've been the contrary if governments were unable to successfully tax people's crypto holdings. But with many people using and patronizing centralized exchanges and wallet providers, crypto taxation should be easy enough to perform by said entities.

The real challenge would be taxing privacy coins. While most privacy coins are traded on centralized exchanges, anyone using a decentralized exchange to trade a privacy coin to Fiat (or vice versa) will make governments' lives impossible. Eventually, governments may end up banning or declaring privacy coins as illegal as they're unable to tax them successfully. Fear not, as crypto's decentralized and open source design will keep it going no matter what governments' regulations may be. The only issue would be getting access to crypto with Fiat currencies if they're banned from widespread use. My guess is that P2P or in-person trades will rise like never before as people use them more thoroughly for exchanging Fiat to crypto (or vice versa) without getting noticed. Taxation or not, crypto will be here to stay for many generations. Just my thoughts