EU taxes on crypto transactions

[NotATether]

I was on X and I read this post:



The replies are not very positive for people who don't want to pay so many taxes:



If the EU is wondering why people are using so many loopholes and offshore methods for crypto 'tax evasion' then this should explain why. Nobody wants to pay the majority of their earnings to their government. People from the USA are lucky that Trump's administration is not going to make these kind of taxes so high.

[HeRetiK]

If the EU is wondering why people are using so many loopholes and offshore methods for crypto 'tax evasion' then this should explain why. Nobody wants to pay the majority of their earnings to their government. People from the USA are lucky that Trump's administration is not going to make these kind of taxes so high.

Friendly reminder that, as already mentioned in the Twitter thread, taxes on crypto are handled vastly different across different countries within the European Union. There are plenty of cases where even cashing out isn't taxable at all (e.g. Portugal and Germany after 1 year of holding, Austria for coins purchased prior to February 2021, Czech Republic after 3 years of holding).

The only thing that seems to be universally taxed as income is profits made in daytrading or similar short term trades; but I reckon that isn't handled much differently in the US or other countries worldwide (with differing tax rates, of course).

[NeuroticFish]

Friendly reminder that, as already mentioned in the Twitter thread, taxes on crypto are handled vastly different across different countries within the European Union. There are plenty of cases where even cashing out isn't taxable at all (e.g. Portugal and Germany after 1 year of holding, Austria for coins purchased prior to February 2021, Czech Republic after 3 years of holding).

I remember I was happy about this law in Germany and back then I was told that the 1 year holding is more complicated than just leaving the coins in your wallet sit for a year.
So if anybody is in this kind of situation (and wants to sell crypto) better DYOR and see for yourself if you have to pay taxes or what to do in order to minimize the amount to pay, based on your country.

I will add that right now (until summer of 2025) in Romania you don't pay the "income tax" on selling crypto, but you still have to declare it and pay some other (smaller) taxes.
This needs also constantly checked because authorities are changing the tax related laws (very) often.

[HeRetiK]

I remember I was happy about this law in Germany and back then I was told that the 1 year holding is more complicated than just leaving the coins in your wallet sit for a year.
So if anybody is in this kind of situation (and wants to sell crypto) better DYOR and see for yourself if you have to pay taxes or what to do in order to minimize the amount to pay, based on your country.

Letting your coins sit for a year is literally all there is to it. Tax authorities in Germany may approach you to prove your holding period; but when filing your taxes there isn't even a field to add cryptocurrency profits if you hold them as a private citizen for more than a year since there is no tax on these profits. Things usually only get complicated if you do day trading, trade with derivatives or have your coins held as part of a corporate entity.

Same was true for Austria until 2021, where cryptocurrency holdings were treated like gold and other commodities. And there too, letting your coins sit was all there was to it.

But yes, definitely DYOR. I just wanted to clarify that taxation varies wildly within Europe and that the original Twitter thread contains largely misinformation.

Also it's super fishy that the original Twitter post says (1) that they are from "Europe" rather than a specific country, (2) is worried about 50%+ taxation (I'm not aware of any European country that taxes income like that but then again taxation varies wildy per country and maybe that would narrow down (1)) and (3) it's grossly negligent to trade for 8 years without exporting a trading history at least once. Assuming they daytraded, they would have been required to record and report their profits according to their trading history on a yearly basis (at least within the European tax systems that I'm somewhat familiar with), though to be fair, that would only apply if they were daytrading and did not reside in a country with a tax-free holding period.

[mindrust]

EU is a tax-hell like most developed countries. If you don’t like the tax laws in your country, move to some other country which is more tax friendly but then there will be other problems probably. Like worse social security, worse crime rates, worse quality of people etc… There are some exceptions that are as good as a developed country but also more tax friendly but you need to do your own research before you decide on which country. Some people say Puerto Rico is cool.

[YOSHIE]

If the EU is wondering why people are using so many loopholes and offshore methods for crypto 'tax evasion' then this should explain why. Nobody wants to pay the majority of their earnings to their government. People from the USA are lucky that Trump's administration is not going to make these kind of taxes so high.

The point is that many people are fighting the law and avoiding taxes, situations like that don't only happen in the EU, Asia is also developing taxes, whether it's crypto taxes and others.

We understand situations like that, if you really look closely, offshore methods are fed up with the actions of the tax authorities, this is not a question of increases or percentages, it is actually acts of corruption that make many avoid taxation, On average, tax countries are the easiest to corrupt, so actually the law is made to be broken by them themselves, here there is just a lack of trust between the public and the tax government.

[Don Pedro Dinero]

The EU is heading for a financial Big Brother with both cryptocurrencies and fiat money. People are paying more and more electronically, which is partly understandable as it is much more convenient, but at the cost of sacrificing privacy. CBDCs are on the march. And the MiCA rule has been approved and will come into force by September 2025 at the latest (in bitcoin ATMs, for example, any transaction will require a full kyc, while transactions of less than €1,000 are not required now). We will see how the gift cards, which look like they could be spared, turn out.

But the one with the screenshots of the OP I don't know what he's crying about. The obligation to declare each swap has been in place for a long time, so he has had all the time in the world to prepare for this moment. What happens is that he is in an intermediate situation. If you have €100 in bitcoin you can find a way out without any problems, and if you have €100 million in bitcoin it's more complicated but it's worth going to another country or something. On the other hand, having €100,000, as he seems to have, is an intermediate amount that is too big to hide with small trades and too small for a big solution.

That said, he has had all the time in the world to prepare. Now he should not cry.

[Lucius]

~snip~
That said, he has had all the time in the world to prepare. Now he should not cry.

I think it all depends on which country he is in and whether he is even within the EU or talking about Europe in general. As some have already written in previous posts, some countries have very favorable crypto laws, so if he can prove that he invested in crypto about 8 years ago and that he doesn't have all the evidence because some CEXs have failed in the meantime - I think every problem has a solution.

In addition to being well-versed in the tax rules of the country in which you live, a good tax advisor can help a lot with these kinds of things. The worst thing he can do is simply sell all his crypto and hope he doesn't pay too much tax.

[mindrust]

If you are trapped in crypto and want to get out without paying taxes maybe bitrefill is the solution as you can buy giftcards anonymously there. Were they doing any KYC btw? Anyway just a thought but I am sure there are other ways of spending your crypto anonymously without having to deal with the authorities. Did they know your btc address? If not, you can tell them to gfy.

Whenever you need something for home, get a gift card and use it on amazon instead of using your cc. $100k will be enough for a lifetime probably lol.

[avikz]

EU national can choose to move to tax heavens like UAE if their portfolio is really huge. There are many other countries which will sell you their passport against an investment and will also give you tax benefits. People can start considering these options if the tax system becomes a nuisance. No one is ready to pay half of their own money to an government agency for nothing. There are many tax heavens in the world who will welcome if you are holding a passport from an EU country.

[The Hidebehinder]

I will go with the guy from the third tweet, this is made up for twitter engagement.

The EU is not a country, taxation is different everywhere, the only Europeans I know to seldom use things like 5 or6 figures when talking about money are from the UK which is not in the EU, I've never seen anyone from France or Germany saying this, but more importantly, why is he calling the EU when the taxation is the problem in his own country. On top of that why is FTX even mentioned as a problem since everyone can download their tradings history without problem with a simple request, I received mine with a whooping $4.2 balance and $56k volume just by submitting my id.

Rage bait 101%

[zeuner]

I was on X and I read this post:

When a platform collapses, most of the time not only the records are lost, but also the funds. With some evidence supporting that this happened, many countries' tax authorities could probably understand that this is at least not positive income. This was different with FTX?

[yhiaali3]

Sometimes I feel happy that the government here in my country has not legalized Bitcoin and cryptocurrencies yet, there are no laws to ban or allow cryptocurrencies so we do not have taxes on cryptocurrencies yet.

It is very extravagant for governments to impose these large taxes and cause their citizens to think of illegal ways to evade taxes, I remember for example the Italian government imposed a 42% capital gains tax on cryptocurrencies and then reduced it to 26% after facing great criticism.

[Don Pedro Dinero]

Sometimes I feel happy that the government here in my country has not legalized Bitcoin and cryptocurrencies yet, there are no laws to ban or allow cryptocurrencies so we do not have taxes on cryptocurrencies yet.

I doubt it very much. If there are no specific laws you will be subject to capital gains tax. I don't know about your country but in general the tax authorities of any country if you buy X for $1,000 and sell it some time later for $100,000 (or the currency of your country) will force you to pay over the $99,000 profit (if they catch you, if they find out about your trade). Just because there are no specific crypto laws or they don't know what you are doing doesn't mean you don't have to.

[Z-tight]

It is very extravagant for governments to impose these large taxes and cause their citizens to think of illegal ways to evade taxes, I remember for example the Italian government imposed a 42% capital gains tax on cryptocurrencies and then reduced it to 26% after facing great criticism.

Yeah, it is true that capital gains on cryptocurrencies in Italy is as high as 26%, that is if the capital gains is up to €2000 or more, and it could even rise to 28% this year. However, that is just one country out of the many in the EU and in Europe. We don't expect every country in the whole of Europe to have 'favorable' crypto tax laws yet, but good thing is that there are countries in Europe with friendly tax laws and it all depends on the country you reside in.

[btcinfo891]

I was on X and I read this post:



The replies are not very positive for people who don't want to pay so many taxes:

The images linked in your post don't display properly for me, they just show error images that say "bitcointalk.org image proxy Invalid image". Is there a way to see the actual messages on X?

[btcinfo891]

If you are trapped in crypto and want to get out without paying taxes maybe bitrefill is the solution as you can buy giftcards anonymously there. Were they doing any KYC btw?

If I understand correctly, Bitrefill requires a full KYC in order to send the user their card. Since Bitrefill is located in Sweden, the EU tax authorities could easily get any information from Bitrefill.

Anyway just a thought but I am sure there are other ways of spending your crypto anonymously without having to deal with the authorities.

Pretty much the only way to do that anonymously is by converting the crypto to cash and then using the cash to buy things. The conversion should be made by a f2f meeting with the other party. The second best option is by getting a debit card from a bank in a country outside of EU jurisdiction, as long the debit card in question works in EU.

Did they know your btc address? If not, you can tell them to gfy.

The real problem is the way one gets the fiat. If any significant amount of money arrives in the bank account, that will inevitably attract the government's attention. There is absolutely no bank secrecy in EU nowadays (or pretty much in any other developed country).

Whenever you need something for home, get a gift card and use it on amazon instead of using your cc. $100k will be enough for a lifetime probably lol.

Amazon cards could probably work for small amounts. However $100k is not even close for lifetime expenses in EU nowadays. Assuming a small spending of $1,000/month (which is on the verge of poverty pretty much anywhere in EU), this is less than 9 years of expenses.  And assuming the more realistic, but still rather moderate spending of $2,000/month, this is less than 5 years of expenses. And with the average is spending of $3,000/month (which is OK, but nothing to brag about in EU) you get less than 3 years of expenses.

So yeah, I would say that for this kind of amount if he wants to play games with the government, then the way to go is via cash, although that has its own risks.

[Don Pedro Dinero]

The images linked in your post don't display properly for me, they just show error images that say "bitcointalk.org image proxy Invalid image". Is there a way to see the actual messages on X?

Well, there seems there has been a problem. Can't you upload them on https://www.talkimg.com/ NotATether?

If I understand correctly, Bitrefill requires a full KYC in order to send the user their card. Since Bitrefill is located in Sweden, the EU tax authorities could easily get any information from Bitrefill.

If you're talking about a debit card they have I think so but you can buy gift cards without even creating an account on the site:

Customers without accounts

    Maximum gift cards/top-ups per day: 15 (fifteen)
    Maximum purchasing limits: 500 USD per day and 1,000 USD per month (different exceptional thresholds may apply to certain Products)

Pretty much the only way to do that anonymously is by converting the crypto to cash and then using the cash to buy things. The conversion should be made by a f2f meeting with the other party. The second best option is by getting a debit card from a bank in a country outside of EU jurisdiction, as long the debit card in question works in EU.

Well, that depends. If you live in a European city you can probably withdraw 990 euros in batches in bitcoin ATMs without KYC. I read that until 30 March you can make 15 such transactions a day (lol). Then until September you could do one a day. But if you have €100,000 you can go once a day and until September you have time to withdraw it. I think that's better than meeting someone in person to sell them €100,000.

[btcinfo891]

If you're talking about a debit card they have I think so but you can buy gift cards without even creating an account on the site:

Thank you for the useful information, I only saw their debit card and did not notice that they also resell gift cards for various merchants. One thing that I noticed is that they don't list the gift card fees, but I would expect that they do have some additional fees besides the crypto exchange fee. The gift cards are not as universal as the debit card, since one cannot use the gift card at the nearby corner store. Still it is nice to have an additional way of buying products anonymously with crypto.

If you live in a European city you can probably withdraw 990 euros in batches in bitcoin ATMs without KYC. I read that until 30 March you can make 15 such transactions a day (lol). Then until September you could do one a day. But if you have €100,000 you can go once a day and until September you have time to withdraw it. I think that's better than meeting someone in person to sell them €100,000.

Well, that will work indeed. The most popular anonymous ATM brand in EU seems to be ShitcoinsClub (or Bitomat as their rebranded name goes).  From my experience their fees for selling you fiat for crypto vary from 0% to 10%, most of the time around 4-5% or so. It should be possible to buy at 2-3% if one is patient enough to wait for the low prices.

Still, as you mentioned the anonymous crypto ATMs in EU will work till the end of 2025 or so. After that MiCA and the other regulations will kick in and everyone will require a KYC.

[yhiaali3]

Sometimes I feel happy that the government here in my country has not legalized Bitcoin and cryptocurrencies yet, there are no laws to ban or allow cryptocurrencies so we do not have taxes on cryptocurrencies yet.

I doubt it very much. If there are no specific laws you will be subject to capital gains tax. I don't know about your country but in general the tax authorities of any country if you buy X for $1,000 and sell it some time later for $100,000 (or the currency of your country) will force you to pay over the $99,000 profit (if they catch you, if they find out about your trade). Just because there are no specific crypto laws or they don't know what you are doing doesn't mean you don't have to.

Yes maybe, your words have a point I of course hide my crypto transactions and keep my privacy about my crypto work and crypto earnings because I don't know what my legal position is with the government if they find out.

But at the same time I have never heard that the government in my country has asked anyone to declare their crypto holdings or earnings and pay tax on them, so I said they haven't imposed a tax on crypto yet but they will definitely do so in the future.