Taxes on Bitcoins: Unreasonable or essential?

[fiulpro]

Government have always been wary of Bitcoins as a whole. They are never ready to accept that cryptocurrencies have made a significant improvement in the lives of many. Unfortunately if you search online about the taxation on Bitcoins , in many countries it's very unreasonable.

It's not a government owned platform.One might be aware of the fact that the government is tracking down people who owns Bitcoins. Taxes on cryptocurrencies are always a matter of debate , in a country like India 30-20% of the Tax is supposed to be paid by the handler who is using the cryptocurrencies like Bitcoins and earning more than a fixed number.

20-30% is not at all a reasonable tax price.

At the same time there are countries where taxation is not considered regarding the cryptocurrencies.

Portugal
Germany
Singapore
Malaysia
Belarus
Slovenia
Malta
Switzerland

(https://news.bitcoin.com/eight-countries-that-dont-tax-your-bitcoin-gains/)

What do guys think ?
Should the government place taxes on Bitcoins or should they let it be? Since they are not helping cryptocurrencies in any way, I do think they should stop making profits out of people. A reasonable tax percentage should be applied ofcourse, but it does not give them the right to label the cryptocurrencies as free money . They should understand that it's a serious issue and if some money is coming from cryptocurrencies, they should at least use 1% of it to educate people about cryptocurrencies.

How much is the taxation on Bitcoins in your country ? Is it reasonable or government is just trying to make profit out of it ?

[1715224943]

1715224943

[1715224943]

1715224943

[1715224943]

1715224943

[dothebeats]

It's unreasonable, yes, but there really isn't something that people can't do about it. For as long as bitcoin can be traded to cash and people are profiting from it, there's always the government wanting to get nosey on everything and will take a share of the pie for your 'patriotic contribution and duty' to your country. And as governments are becoming aware of the possibilities that one can take from bitcoin, expect that they will also do anything in order to get something out of it--be it in the form of tax, services, contributions or whatever the hell they want to call it.

I guess I'm still lucky that the Philippines does necessitate its citizens to declare their crypto gains for tax purposes, but I'm sure exchanges based here are already doing their part to keep track of it should the need for taxation arise.

[LFC_Bitcoin]

I’m going to be bias and say that I don’t think taxes should be so high on bitcoin. I’m living in the UK & have done since birth, I bought a lot of my bitcoin’s for under $400 - $500 & I’ve HODLED for many years. When the time comes that I decide to sell I will owe the UK government 20% in Capital Gains Tax. This pisses me off immensely, I bought bitcoin when it was relatively in its infancy so why should I have to pay such taxes? It was a massive risk, almost gambling which by the way isn’t taxed in the UK.

I expect to be cashing in millions of pounds worth of bitcoin in the next few years so I’m going to end up paying a shit tonne of fucking tax. If the UK Gov raise Capital Gains Tax higher than 20% to pay for this damn Corona Virus & the havoc it’s wreaked on the economy I’m emigrating

Any hot girls from the countries you posted want to marry me so I can get citizenship?

[Artemis3]

It is nonsensical in many ways, but people cannot help but try to apply what they know to the new thing they don't.

Are you going to tax bitcoin? in bitcoin, or a fiat equivalent? At what rate? Are you taxing all the little altcoins too? at what rate?

What exactly are you taxing? Someone's wallet? Whatever enters that wallet? What it people just keep undeclared wallets?

Bitcoin is not moving in and out of your country (actually it is, but ALL of it, all the time, as long as nodes exist within).

Its not like people actually send coins from country a to country b, its easier to visualize that way because its what we are used to, but actually...
User from country a hands the keys to control certain coins to user in country b.

I think if they stick to VAT, it might be doable. Then you can go and audit the merchant on things or services that are actually sold. But any other taxation is entirely voluntary, even if they make a law so its compulsory, in reality it will always be voluntary.

Pretty much unenforceable.

[Sayma83]

It's irrational, truly! however there truly isn't something that individuals can't do about it. For whatever length of time that bitcoin can be exchanged to money and individuals are benefitting from it, there's consistently the administration needing to get nosey on everything and will take a portion of the pie for your energetic commitment and obligation to your nation. What's more, as governments are getting mindful of the potential outcomes that one can take from bitcoin expect that they will likewise do anything so as to receive something in return be it as assessment, administrations, commitments or whatever the damnation they need to call it. So it is jast my opinion with suggestion so all the best for crypto usersBTC 

[coupable]

With capitalist govs, everything is taxable even the money you win in gambling or contests. If bitcoin is legalised in such a country, then it will be taxable.
I am from a third world country, and fortunetly our gov doesn't yet take attention about crypto taxation as bitcoin is not yet legalised but the crypto community is in huge growth and recently the representative of the central bank talked about encouraging digital paiement methods (due to covid crisis) including bitcoin and that they are working on laws to manage this. Laws means taxation of course.
I can tell it's an absolute nonsense as we are still governed even by choosing anonymity. Sad but true .

[Kakmakr]

I can only speak for my country... here the government adds VAT on every Bitcoin payment you make, because you used it as a currency. Also, if you used it as a commodity ...you have to pay Capital Gains taxes on your profits. So you asking if this is unreasonable for a country to charge VAT or Capital Gains taxes on something that is used as a currency or a commodity... I say ….No.  

In some countries they add a few percentages of taxes on Capital Gains for everything to do with Crypto currencies and I then have to agree with you that it is unreasonable then.  

We (Crypto currency owners) wants no special treatment, because we want the government to handle this as they would with any other currency or commodity.  

[Sadlife]

In order for Bitcoin to be globally adopted governments should gain revenue for example tax it is necessary for a country to function that helps the people with their programs and to build roads or buildings etc. That can be beneficial for its citizens.
So i agree that Bitcoin should be taxable and it is pseudo-anonymous which is traceable in every transaction that identifies the sender and receiver.

[ragavancoin]

It might be any country tax should be reasonable on bitcoin, but government does not do it. Because of coronavirus they might even increase the tax. There should be a proper rule.

In India bitcoins are gradually picking up, hope that government will notify soon the taxation of around the legality of Bitcoin and disclosure requirements and their taxability.

[ranochigo]

Taxes are pretty essential for any country but having anything more than 10%, IMO is too much. Is there any legistation regarding the tax in the countries? If its specifically directed towards crypto, then it's just trying to discourage people from using Bitcoin. Capital gain tax is pretty common among most countries and if the taxes is counted as a capital gain tax, then it's alright.

Bitcoin is a commodity and should be treated as such. Having a high capital gain tax is a whole other issue altogether, since it applies to things like capital gains from property, stocks etc.

[Darker45]

20-30% for tax is very high, but if that is the same tax rate that is imposed on fiat-based income or gains, then there is probably nothing to contest.

I think taxing Bitcoin is somehow necessary as taxing fiat. Both are currencies, after all. But if you used an already-taxed fiat in order to buy Bitcoin, and then another round of tax obligations are imposed on your Bitcoin holdings, you are already taxed double. And, worse, by the time you sell your Bitcoins-- if you prefer to spend them in fiat-- you will again be imposed with a double-figure capital gains tax. In which case, you are already being abused.

Well, with Bitcoin, anyone can easily circumvent tax obligations.  

[AniviaBtc]

With capitalist govs, everything is taxable even the money you win in gambling or contests. If bitcoin is legalised in such a country, then it will be taxable.
I am from a third world country, and fortunetly our gov doesn't yet take attention about crypto taxation as bitcoin is not yet legalised but the crypto community is in huge growth and recently the representative of the central bank talked about encouraging digital paiement methods (due to covid crisis) including bitcoin and that they are working on laws to manage this. Laws means taxation of course.
I can tell it's an absolute nonsense as we are still governed even by choosing anonymity. Sad but true .

Taxes are normal because it will help the government or the blockchain system to sustain itself so that it will not have a hard time maintaining its condition.

"In this world, nothing can be said to be certain, except death and taxes" - Benjamin Franklin

That's where the government are benefiting, it collect taxes so that it can improve its service and manipulation in the market with the help of the taxes of every people that are accessing cryptocurrency in their transactions.
Hopefully, the bitcoin will become allowed to most of the countries for them to understand its importance and how can the government get a benefit to that to engage with an economic growth.

Laws are important to help the government to become properly regulated in the market and economy, because there are some governments who are taking advantage of the taxes that it becomes unreasonable enough for the people to experience that.

[Kemarit]

I think it's inevitable, although we really hate government for imposing tax on Bitcoin, sooner or later we are going to be a target so we can't do anything about it. And we have seen in the last couple of years that regulations are being put forward on crypto, so most likely we will see taxation will be mandatory.

At least though, here in my country we still haven't been tax yet because it is not yet well-know although local exchanges are very strict as far as KYC/AML. Similar threads here, Bitcoin and tax in your countries.

[jossiel]

IMO, there's no need to tax for just having it. The holders took a lot of patience holding it until the price matters and then they'll step in just to tax with an unreasonable percentage? that's too much.

I think once you spend your bitcoin or pay for something, there goes the taxation and it should be the one who gained it. The value is being passed to the receiver which should I think the one that must be responsible to have the tax but, there goes the idea of being unfair because we might be the sender today but becomes the receiver tomorrow.

[pooya87]

How much is the taxation on Bitcoins in your country ? Is it reasonable or government is just trying to make profit out of it ?

it depends on the country and what they are taxing, you can't tax bitcoin. but you can tax miners, traders, merchants,... and it is all reasonable in my opinion but taxing people for using bitcoin as a currency is not since it would be like taxing them if they used another fiat instead of the local fiat currency. not to mention that some developed countries are already taking this route like Japan.

if you compare each case with similar real world cases you can see that for example a miner is earning money like any other business, like a gold miner and has to be taxed, a bitcoin trader is also making money like any other trader such as a stock trader so similarly they have to be taxed, same with merchants.

[webtricks]

It's not a government owned platform.One might be aware of the fact that the government is tracking down people who owns Bitcoins. Taxes on cryptocurrencies are always a matter of debate , in a country like India 30-20% of the Tax is supposed to be paid by the handler who is using the cryptocurrencies like Bitcoins and earning more than a fixed number.

20-30% is not at all a reasonable tax price.

Since, you gave the example of India so I would like to clear few things:

Number 1, no tax on holding or buying Bitcoin is levied in India. The tax is only levied when you sell Bitcoins for Indian Rupees (i.e. local currency of India) and have either made profit (if bought Bitcoins) or made income (if received Bitcoins as payment).

Number 2, 20-30% taxes aren't unique to Bitcoin. These rates are common for all types of incomes in India. Also 30% is only levied on the income over 1M INR. If your earnings are lower than 1M (no matter if the source of income is Bitcoin or other), you have to pay taxes at lower rates.

Number 3, There are no laws related to Bitcoin and its taxable treatment in India so far.

For complete details, I would suggest to have a look on this thread of mine: https://bitcointalk.org/index.php?topic=5206607.0

[slackovic]

How much is the taxation on Bitcoins in your country ? Is it reasonable or government is just trying to make profit out of it ?

it depends on the country and what they are taxing, you can't tax bitcoin. but you can tax miners, traders, merchants,... and it is all reasonable in my opinion but taxing people for using bitcoin as a currency is not since it would be like taxing them if they used another fiat instead of the local fiat currency. not to mention that some developed countries are already taking this route like Japan.

if you compare each case with similar real world cases you can see that for example a miner is earning money like any other business, like a gold miner and has to be taxed, a bitcoin trader is also making money like any other trader such as a stock trader so similarly they have to be taxed, same with merchants.

They don't have to be taxed, but it can be seen as reasonable that people that earn money by using Bitcoin gets taxed. For example, you have countries like Germany who don't tax people that earn money on trading Bitcoin if they kept it in a wallet for over a year.
I think we can all agree that governments will always look how to take their "piece of a cake", but countries like Germany are good example how some governments don't just take everything they can from their people. You give some, you take some and everyone is happy

[DoublerHunter]

^ It is not uncommon to have a tax on the existence of bitcoin. But let's take a look at bitcoin's existence and make money using bitcoin. As with most, gold traders pay taxes to the government because they earn money by selling gold, just like entrepreneurs who also pay taxes to the government. In my opinion it is only right that bitcoin users have a tax. But it still depends on the country and the government they have for using and making money in bitcoin, as there are still countries today that do not solicit tax on bitcoin users. Nevertheless, bitcoin users can actually be taxed, but that should not be as high as the tax that is available to all bitcoin users. 

[vapourminer]

What do guys think ?
Should the government place taxes on Bitcoins or should they let it be? Since they are not helping cryptocurrencies in any way, I do think they should stop making profits out of people. A reasonable tax percentage should be applied ofcourse, but it does not give them the right to label the cryptocurrencies as free money . They should understand that it's a serious issue and if some money is coming from cryptocurrencies, they should at least use 1% of it to educate people about cryptocurrencies.

How much is the taxation on Bitcoins in your country ? Is it reasonable or government is just trying to make profit out of it ?

in the usa if you make a profit in any form, you pay taxes on it.

buy a coin for $10,000, sell for $20,000. pay taxes on the difference.. so $10,000 would be taxed. capitol gains if held more than a year. regular income if less.

dunno bout you but i smile when paying taxes (however i may not approve of how its spent amd given away.. thats another story though) because after all i made money . dont want to pay taxes? dont make money. simple.

i may be off a bit on the terminology though.

[kryptqnick]

One might be aware of the fact that the government is tracking down people who owns Bitcoins. Taxes on cryptocurrencies are always a matter of debate, in a country like India 30-20% of the Tax is supposed to be paid by the handler who is using the cryptocurrencies like Bitcoins and earning more than a fixed number.

20-30% is not at all a reasonable tax price.

At the same time there are countries where taxation is not considered regarding the cryptocurrencies.

Portugal
Germany
Singapore
Malaysia
Belarus
Slovenia
Malta
Switzerland

(https://news.bitcoin.com/eight-countries-that-dont-tax-your-bitcoin-gains/)

What do guys think ?
Should the government place taxes on Bitcoins or should they let it be? Since they are not helping cryptocurrencies in any way, I do think they should stop making profits out of people. A reasonable tax percentage should be applied ofcourse, but it does not give them the right to label the cryptocurrencies as free money . They should understand that it's a serious issue and if some money is coming from cryptocurrencies, they should at least use 1% of it to educate people about cryptocurrencies.

How much is the taxation on Bitcoins in your country ? Is it reasonable or government is just trying to make profit out of it ?

First, not every government tracks people who use BTC. I'm sure my country is not an exception, and our government doesn't care about this at all. Now, regarding the main question. I think that taxes are a good way for the state to get money that can be then used to make things better. However, I believe in cryptos as money and thus find it unfair that cryptos are taxed as if they were assets or property. I think the only tax that makes sense when it comes to cryptos is income tax. And it should be progressive with people earning small amounts being tax-exempt. This would be fair and useful, but overly high taxation is extremely unfair.