Government Taxing Bitcoin? Here's the Answer

[longyenthanh]

In my view crypto is never meant for things like tax collection. how can government tax an asset that cant be monitored or controlled by any single authority? There is only one way to tax bitcoin and that is by bringing regulations to bitcoin. I dont think many will prefer to use a regulated bitcoin.
The Tax Treatment Of Bitcoin And Other Cryptocurrencies

[Divinespark]

Once you use cryptocurrency, you don't need to care about taxes. Because no government in the world will be able to track and tax, and that is also the reason why many governments around the world are worried about the development of cryptocurrency. It is not easy to follow this market and apply taxes to it. Therefore most countries have banned cryptocurrencies

[crossabdd]

one day there will definitely be a solution, right now the best solution is still using a central bank. by converting crypto to fiat. so that it can be taxed. dichina has prepared crypto currencies made by the government. so this is another option for taxation. I think if the country still uses decentralized cryptocurrency. it will be difficult to make taxes on users. in my country personally, there are no taxes for crypto holders.

[peter0425]

what i believe is that is why KYC is implemented in some exchange is to take taxes from users of crypto.and also that is why the fee is too high when converting crypto to fiat because part of that will be for Central bank.

I don't see why would be an impediment for Governments to collect taxes. Companies will still have to invoice people and make filling within the tax authorities. People will have to pay taxes on wages if they have a contract no matter what currency they are payed in. However I think that should happen only once BTC gets adopted on a much larger scale. Nowadays you can't use Bitcoin at many things unless you convert it to fiat.

don't forget mate that many of us now are making money here in crypto and we are not employee to taxed by our company,so this is why we need to have taxes everytime we need to convert our crypto to fiat.

[michellee]

To be honest, I don't know how the government applies tax for bitcoin, but I am sure that they can do that because they will know people who already use crypto by checking on the bank account. They will search for the account who made a big transaction in a month, and I think they will try to ask that people about the money they sent. But maybe that will be related to the KYC that every exchange did for their members so the government can check one by one of the members so they can get the name of the people.

[White Christmas]

To be honest, I don't know how the government applies tax for bitcoin, but I am sure that they can do that because they will know people who already use crypto by checking on the bank account. They will search for the account who made a big transaction in a month, and I think they will try to ask that people about the money they sent. But maybe that will be related to the KYC that every exchange did for their members so the government can check one by one of the members so they can get the name of the people.

I don't think so that the government knows those person who are into the cryptocurrency by just having a large or huge transaction meaning that they are already making funds through the use of Cryptocurrency? It's a big No in which there so many people can have many transactions because of business and etc. I think the tax that are getting for those people who are into cryptocurrency is already built in the exchangers or the banks just for example if you are withdrawing your money from the banks, there also a lessen on your money because tax has been applied into it. But personally it really hard to know if how did the government are taxing bitcoin.

[Youghoor]

I always wonder how could an economy operate and run without taxes from cryptocurrencies. How could a government obtain taxes from people when people are completely utilizing a currency that is not supporting taxes. Would it be really good if we completely have our fiats converted to crypto? For me, there's always a way if our intention is good. We cannot really deny how government is providing regulation that is mainly for the betterment of us despite of some issues regarding corruption and frauds.

For me, the way we could still make it possible is to establish a local exchange wherein, if we convert our money to crypto, these local exchange could already have the portion intended for the tax of each transactions.

Considering the entire nature of the bitcoin ecosystem and the entire crypto space, its quite easier to set up a system that  can help the government obtain taxes from people using cryptocurrencies for their transactions made of the blockchain network.  Instead of the government accepting the use of cryptocurrencies, they can easily understand how to set up systems in place to actually tax people using cryptocurrencies in their transactions.

[chaoscoinz]

I always wonder how could an economy operate and run without taxes from cryptocurrencies. How could a government obtain taxes from people when people are completely utilizing a currency that is not supporting taxes. Would it be really good if we completely have our fiats converted to crypto? For me, there's always a way if our intention is good. We cannot really deny how government is providing regulation that is mainly for the betterment of us despite of some issues regarding corruption and frauds.

For me, the way we could still make it possible is to establish a local exchange wherein, if we convert our money to crypto, these local exchange could already have the portion intended for the tax of each transactions.

I think it would be utterly ridiculous to convert all of ones money into cryptocurrencies, unless one wanted to loss the shirt off of his/her back and then some.
Cryptocurrency is way too volatile to dump an entire Bank account into it. Are cryptocurrencies the future, almost certainly, whether or not Bitcoin will still be around is highly debatable, but Fiat really isn't going anywhere anytime soon, you can count on that.
  Maybe within the future once regulations and policies are much clearer for everyone involved, but to each his/her own! Fiat is way too easy to use whether physically or digitally, try explaining Bitcoin and Blockchain technology to my grandparents, they'll laugh at you then ask you does your president or local Congressmen support it? If not, it's probably a no go!

[Blackdeath]

I always wonder how could an economy operate and run without taxes from cryptocurrencies. How could a government obtain taxes from people when people are completely utilizing a currency that is not supporting taxes. Would it be really good if we completely have our fiats converted to crypto? For me, there's always a way if our intention is good. We cannot really deny how government is providing regulation that is mainly for the betterment of us despite of some issues regarding corruption and frauds.

For me, the way we could still make it possible is to establish a local exchange wherein, if we convert our money to crypto, these local exchange could already have the portion intended for the tax of each transactions.

I think in my country, the government is already using and putting taxes whenever i am withdrawing my crypto in banks and legal remittances or converting my crypto into fiat by adding fees, so crypto do really support tax when i used legal remittances and even i convert all of my fiats into crypto i still need to use legal remittances just to convert them.

[kryptqnick]

I always wonder how could an economy operate and run without taxes from cryptocurrencies. How could a government obtain taxes from people when people are completely utilizing a currency that is not supporting taxes. Would it be really good if we completely have our fiats converted to crypto? For me, there's always a way if our intention is good. We cannot really deny how government is providing regulation that is mainly for the betterment of us despite of some issues regarding corruption and frauds.

For me, the way we could still make it possible is to establish a local exchange wherein, if we convert our money to crypto, these local exchange could already have the portion intended for the tax of each transactions.

I think that it's justified to treat cryptos for tax purposes the way fiat currencies are treated. Normally it means only income tax. In my country the legislation is tricky with two different ways and amounts to pay depending on the type of business. Anyway, there are countries with reasonable progressive tax system which even allows people with very small income not to pay anything.
There are also small states which are tax-free, and some zones for crypto businesses that allow not to pay taxes or not to pay a lot for a while.
The exchange idea is also nice. It's kind of like we all pay VAT which is embedded into the prices of goods. Easy and useful.

[Findingnemo]

I always wonder how could an economy operate and run without taxes from cryptocurrencies. How could a government obtain taxes from people when people are completely utilizing a currency that is not supporting taxes. Would it be really good if we completely have our fiats converted to crypto? For me, there's always a way if our intention is good. We cannot really deny how government is providing regulation that is mainly for the betterment of us despite of some issues regarding corruption and frauds.

For me, the way we could still make it possible is to establish a local exchange wherein, if we convert our money to crypto, these local exchange could already have the portion intended for the tax of each transactions.

For using currencies we no need to pay taxes, only if we earned more money than the limits we should pay the taxes to the government.

If bitcoin or any other decentralized cryptos used worldwide the transactions may not be recorded by banks or governments but each spending on that crypto will be recorded by somewhere so it's just same as the fiat money but without any centralized authority to increase the total supply which is happening with fiat.

You are proposing tax should be paid for every conversion, by these only governments own all the bitcoins after some time.

[hatshepsut93]

I always wonder how could an economy operate and run without taxes from cryptocurrencies. How could a government obtain taxes from people when people are completely utilizing a currency that is not supporting taxes. Would it be really good if we completely have our fiats converted to crypto? For me, there's always a way if our intention is good. We cannot really deny how government is providing regulation that is mainly for the betterment of us despite of some issues regarding corruption and frauds.

For me, the way we could still make it possible is to establish a local exchange wherein, if we convert our money to crypto, these local exchange could already have the portion intended for the tax of each transactions.

Same way as with cash - punish people for evading taxes, or introduce VAT that makes merchants direct targets of taxation. Bitcoin right now is less private then cash, so it would be quite hard to use it for tax evasion. Crypto isn't inherently anti-tax, it's anti-middlemen in payments and that's all, it's up to users to decide how they want to use crypto - follow the laws and regulations or not.

[luppecuppe]

It makes sense to think about taxes all the time. Did you earn enough money to get into trouble with taxes from this market? States are still insensitive to these markets. They ignore this market. I don't think it's important. In order to get tax from Bitcoin, it is necessary to declare it legal.

[Rengga Jati]

Taxes for Bitcoin or other cryptocurrencies have become issues in some countries. This also happens in my country after there is legal protection for all digital assets, including cryptocurrencies. However, the tax for BTC is not implemented yet. This is still within the framework of the formulation and consideration.

There are always pros and cons toward the taxing for BTC if it will be implemented. If the government really want to tax the BTC, they must have the crucial reasons and must be fair for all people who have the BTC. Additionally, the regulation as the basis of the tax-decision must be clear enough, not only getting tax for the country but also considering whether the BTC holder does not mind about the amount of the tax. IN my opinion why there are still many countries that do not tax BTC is that it is quite difficult to make the mechanism, issues, and also consideration.

But, if the rule is like what OP said:

For me, the way we could still make it possible is to establish a local exchange wherein, if we convert our money to crypto, these local exchanges could already have the portion intended for the tax of each transactions.

I rather agree with this. It may be fair enough for all. But of course, consider the amount, for a fair decision.

[Gyfts]

Having decentralization means that taxation of funds is going to be an issue, probably why many governments have implemented hard regulations on Bitcoin. Back in the bitcoin boom in 2017, you were expected to pay capital gains taxes in the US similar to as if you had invested in a stock so it's not like the IRS has forgotten about crypto investors. The way I see it, governments are going to crackdown on tax evasion through crypto currencies if it becomes a big enough issue to the point that people are converting fiat into crypto for the sake of tax evasion. Clearly, bitcoin isn't mainstream enough to warrant any extreme measures but don't have any fear, if Uncle Sam is missing share of cash he'll go hunting for it.

[diahsw]

I judge, from what you write, you conclude that taxes are allowed, to guarantee the sustainability of a development, but in my opinion, there are other things besides taxes, because the true tax is made so that we together feel the results ... !!

[KawBet]

In reality this is not possible unless you store your wallet in a thirdparty wallet.

[meanwords]

You didn't solve the government's taxation, you only made it simple! because as long as there's a centralized third party that is handling the information of the user and the connected wallet to him/her, then the government can do whatever they want.

In my opinion, the only way to avoid taxation is to use decentralized third parties like exchanges. That way, they can't track your earning as long as you don't report it.

[bounceback]

the government in my country has made it clear that users of cryptocurrency or bitcoin are required to report ownership or profits we get through bitcoin investments, so they will collect annual tax on us, but they do not take tax specifically into our bitcoin ownership but rather from revenue between selling prices and the purchase price which is the object of taxation.

[Murat]

There is a lot of ways of imposing a tax for the government's rising fund which is used for the expenditure for maintaining a state properly, I think only BTC is not their headache, Another thing is that, If Bitcoin would be included in the tax system then what is the problem, I don't see any problem at all, We are giving Foreign exchange when we convert BTC into USD and Covert into local fiat, so we have already given to them, so there should be a proper system which only once imposes tax for using BTC or Cryptocurrency, I think it's not a difficult thing anymore.