Accepting Bitcoin for paying tax

[M. C]

I see nothing different, what's exactly the biggest difference if you pay tax using fiat and Bitcoin? I think you might end up paying 2x tax, first is your income tax and second is capital gains tax.

Technically people need to pay tax if they sold their coins at profit, it doesn't have to wait until Bitcoin can be used for paying tax.

I see, however in Switzerland, you don't pay any taxes if you made profit from selling cryptos.

Lets say you buy Bitcoin at 20k , and decide to sell at 70k. Not a single cents is taxable (article 16 paragraph 3 from the Swiss Direct Federal Tax Act)

Title 2 -  Income tax

Chapter 1 Taxable income

Article 16

Paragraph 3 : "Capital gains realized on the disposal of private assets are not taxable."

Selling is another word for to dispose.

Private assets can be cars, tv, company shares, but also cryptos.

Only way a government can tax your profit you made from selling your cryptos is if your are a independant and you are buying and selling cryptos as a living like a trader for example because the crypto are in this case commercial assets and not private assets anymore.

[M. C]

I see nothing different, what's exactly the biggest difference if you pay tax using fiat and Bitcoin? I think you might end up paying 2x tax, first is your income tax and second is capital gains tax.

Technically people need to pay tax if they sold their coins at profit, it doesn't have to wait until Bitcoin can be used for paying tax.

I actually sees it as a major plus to the Bitcoin ecosystem, if most states start accepting Bitcoin in tax collection,   because it will definitely bust it popularity among local and by doing so, they are advertising Bitcoin unknowingly to the general masses, which will make it adoption process worldwide very fast.

But the major disadvantage about it is that you might end up paying even more than person paying with the fiat, because after paying your tax with Bitcoin, you will definitely be paying the higher transaction fee attached to it, which will be very much expensive compared to the fiat.

What about Lightning Network ?

[Frankolala]

Asking for taxes to be paid in bitcoin and USDT shows that the government has already accepted cryptocurrency especially bitcoin as an alternative means of payment in the country, and it is legalized. I don't see any big deal there, as long as it is not a compulsory thing, but your choice of payment method.

I cannot pay my tax in such place with bitcoin, when I don't earn in bitcoin. Assuming, I am paid in bitcoin, I don't see it as any problem to me. My bitcoin is very precious to me, so I will rather use it as an investment than giving it to the government.

[Catenaccio]

I cannot pay my tax in such place with bitcoin, when I don't earn in bitcoin. Assuming, I am paid in bitcoin, I don't see it as any problem to me. My bitcoin is very precious to me, so I will rather use it as an investment than giving it to the government.

If I have bitcoin and my government accepts bitcoin as a tax payment method, I will still not use my bitcoins to pay tax.

Because if I am not careful, I will break my privacy to tax governmental agency. With Bitcoin, I have my own bank and privacy if I have good practice. Use my bitcoins to pay tax, is one of bad practice, that I will not do.

[M. C]

I cannot pay my tax in such place with bitcoin, when I don't earn in bitcoin. Assuming, I am paid in bitcoin, I don't see it as any problem to me. My bitcoin is very precious to me, so I will rather use it as an investment than giving it to the government.

If I have bitcoin and my government accepts bitcoin as a tax payment method, I will still not use my bitcoins to pay tax.

Because if I am not careful, I will break my privacy to tax governmental agency. With Bitcoin, I have my own bank and privacy if I have good practice. Use my bitcoins to pay tax, is one of bad practice, that I will not do.

I understand your point of view, this is something I also thought about.

However I believe that if you are a experienced Bitcoin user and with good practice like you said. You can find a way to not let them know.

But of course, it could be just an illusion, and that they're trying every means possible to tax you and report any activity they might find suspicious.

[m2017]

What do you guys think about a city accepting Bitcoin for paying taxes, fines and all other invoices from the municipality.

What is there to think about? Isn’t this what all BTC-enthusiasts dreamed of, that with the help of bitcoin they could pay their expenses. In principle, invoices from the municipality are exactly the same invoices.

Is it a bad thing or a good thing for the Bitcoin ecosystem ?

Considering that bitcoin was designed as a digital electronic payment system, it is probably good for the ecosystem when bitcoin can perform its functions directly. That is, to be a means of payment.

I believe that accepting crypto and especially BITCOIN to pay taxes could be a favorable business framework conditions for crypto companies / investor that are looking for a place to establish their operations.

More likely yes than no.

Additionally, let's imagine a company that decided to go full on crypto (in their treasury) , how are they going to fulfill their taxes obligations ?

It’s possible to imagine this, but I don’t think that at least any company can now exist completely separate from traditional money. But having a choice of how companies could pay their tax obligations (using traditional money or crypto) would already look much more favorable for economic development. In my opinion, crypto companies should have priority on being able to pay taxes using cryptocurrencies. But governments have their own opinions on this matter.