Topic: About the legal situation of selling stuff with BTC (Read 1561 times)
It vary largely from country to country. But generally whatever profit or gains you made by selling your products is taxable according to your country's tax rules.
My answer will only be limited to what I think is the global rule about income tax. No matter of you receive other kind or form of payment to your business it will be counted as income therefore it is taxable. And to answer you, yes you can accept Bitcoin as your preferred mode of payment even if you don't accep Fiat Currency, your stuff your terms. Just to keep in mind to right all your transactions along with its Fiat currency value during that time.
My guess is that you are liable to pay taxes on any profit from your sales (even if the profit is in the form of Bitcoin). Because I have read about an incident in which a guy sold some of his stuff for gold coins. He had to pay a tax on the profits, after calculating the average gold prices.
He won't have to really claim income until it is converted to fiat. The problems are with sales tax, if applicable. The person selling gold received fiat immediately, and there would be sales tax.
Well chances if he advertises his stuff online then probably the tax he could only are the maintaning fee for the site and the transaction fees of each payments. Either you will pay the transaction fee or the buyer. For i dont have any problem converting any fiat but in small businesses like this trust issued on who would pay or is the product even good when it will come to me?. Those might be issues that can arrive but its up to the seller for this matters.
My guess is that you are liable to pay taxes on any profit from your sales (even if the profit is in the form of Bitcoin). Because I have read about an incident in which a guy sold some of his stuff for gold coins. He had to pay a tax on the profits, after calculating the average gold prices.
He won't have to really claim income until it is converted to fiat. The problems are with sales tax, if applicable. The person selling gold received fiat immediately, and there would be sales tax.
My guess is that you are liable to pay taxes on any profit from your sales (even if the profit is in the form of Bitcoin). Because I have read about an incident in which a guy sold some of his stuff for gold coins. He had to pay a tax on the profits, after calculating the average gold prices.
Then it's illegal until the IRS accepts bitcoin, if you otherwise would have to do any in state tax.
The answer is simple. (if you're in the USA, and probably the same in many places)
When someone buys from you, you treat it like any other transaction. This means if it's online you can treat it like the state does: for out of state with no agreement there is no tax, with agreement there is tax, and within state online only tax if there is sales tax in the state. So you can set the tax at whatever an approximate USD value is at, that the customer pays. How you turn this into fiat that you surrender to the state is up to you - I sure as hell would pay it.
Why like that? Because the physical products are in the purview of the state. You see, there is the expectation of the amount of money spent to make your existence and utility of public things like business license, road, etc, to be paid with by taxes.
Here is where you don't pay taxes, on the BTC as income. There certainly is some pressure to get people to think they should, but it makes no sense. Until you convert that BTC to fiat then it's out of the purview of the state/fed. They can tell you otherwise but the only legal thing they really hold over you as far as I know is the limitation of business to people on the "black list" that no US citizen/corp can do business with in no respect to what that business is or the currency/property/IP. I wouldn't be surprised however if some people are brought to litigation since the expectation of defense is low when you're fighting the gov; it'll be a question of how long it takes to fundamentally get thrown out as BS in a court level high enough to count.
I'm not saying it's impossible for someone to pursue income tax/property tax for your BTC, I'm saying it's wrong and illegal. It would be like taxing a citizen of Mexico because they look at the USA with binoculars from their home near the border and otherwise have no interaction. Taxation online is a decent example of a way to look at BTC taxation. Seeking taxes across borders is too complicated, but also it's a loss of property in the purview of the state that is no longer responsible for so the point of seeking for the selling state is weak. Well, BTC isn't in the purview and until it leave it's own global decentralized realm to become fiat (ok, it doesn't "transformer" but your ownership of something does) it shouldn't be something to be concerned with. Think about it like this as well, banks are regulated and FDIC insured, BTC isn't, so you're saving the government money pre-conversion.
When someone buys from you, you treat it like any other transaction. This means if it's online you can treat it like the state does: for out of state with no agreement there is no tax, with agreement there is tax, and within state online only tax if there is sales tax in the state. So you can set the tax at whatever an approximate USD value is at, that the customer pays. How you turn this into fiat that you surrender to the state is up to you - I sure as hell would pay it.
Why like that? Because the physical products are in the purview of the state. You see, there is the expectation of the amount of money spent to make your existence and utility of public things like business license, road, etc, to be paid with by taxes.
Here is where you don't pay taxes, on the BTC as income. There certainly is some pressure to get people to think they should, but it makes no sense. Until you convert that BTC to fiat then it's out of the purview of the state/fed. They can tell you otherwise but the only legal thing they really hold over you as far as I know is the limitation of business to people on the "black list" that no US citizen/corp can do business with in no respect to what that business is or the currency/property/IP. I wouldn't be surprised however if some people are brought to litigation since the expectation of defense is low when you're fighting the gov; it'll be a question of how long it takes to fundamentally get thrown out as BS in a court level high enough to count.
I'm not saying it's impossible for someone to pursue income tax/property tax for your BTC, I'm saying it's wrong and illegal. It would be like taxing a citizen of Mexico because they look at the USA with binoculars from their home near the border and otherwise have no interaction. Taxation online is a decent example of a way to look at BTC taxation. Seeking taxes across borders is too complicated, but also it's a loss of property in the purview of the state that is no longer responsible for so the point of seeking for the selling state is weak. Well, BTC isn't in the purview and until it leave it's own global decentralized realm to become fiat (ok, it doesn't "transformer" but your ownership of something does) it shouldn't be something to be concerned with. Think about it like this as well, banks are regulated and FDIC insured, BTC isn't, so you're saving the government money pre-conversion.
Thank you very much for the detailed answer. That is actually what I think. I didn't explicitly state in the original post, but the question was about a case where I don't convert anything to fiat, but pursue the business only in bitcoins.
Though it can depend on country to country as they have their own set of rules, broadly speaking as most countries do not recognize bitcoins as an official currency, the buying and selling is to be considered as something like a barter system, exchanging one goods for another (a digital good in case of Bitcoins).
But, once when the earned Bitcoins is converted to any recognized currency, it is treated as an income in the respective currency.
But, once when the earned Bitcoins is converted to any recognized currency, it is treated as an income in the respective currency.
Hi,
Is there anyone knowledgeable about what happens when I sell, say, books and accept only BTC as the payment method? Is it taxable or what? Does it count as an income, since I won't accept any actual money that governments accept?
Thank you
It is irrelevant whether or not the transaction involved fiat, any commercial activities are taxable events in most countries. Is there anyone knowledgeable about what happens when I sell, say, books and accept only BTC as the payment method? Is it taxable or what? Does it count as an income, since I won't accept any actual money that governments accept?
Thank you
In the UK, you will have to pay VAT. You can read my writing here.
https://steemit.com/cryptocurrency/@haiduong/uk-bitcoin-tax-questions-and-answers
In the US, income tax and sales tax should be applied
It depends on the local law what it defines taxable. But using simple logic, since bitcoin can be considered a digital asset which you are acquiring, you need to pay tax for that, as in most countries, anything that can be declared as asset is taxable.
But the big advantage with bitcoin must be, until we declare how much we are holding, we can delay the taxation. So, I believe there will be no hurry to pay tax or to concern about paying taxes as we are all still into collecting phase of bitcoins and these taxes will be applicable once we switch over to spending phase.
But the big advantage with bitcoin must be, until we declare how much we are holding, we can delay the taxation. So, I believe there will be no hurry to pay tax or to concern about paying taxes as we are all still into collecting phase of bitcoins and these taxes will be applicable once we switch over to spending phase.
Indeed everything that is a state asset must have an obligation to pay taxes from the income of the asset (in this case bitcoin),
Does this also apply to states that prohibit bitcoin?
But in those countries have many bitcoin users.
The answer is simple. (if you're in the USA, and probably the same in many places)
When someone buys from you, you treat it like any other transaction. This means if it's online you can treat it like the state does: for out of state with no agreement there is no tax, with agreement there is tax, and within state online only tax if there is sales tax in the state. So you can set the tax at whatever an approximate USD value is at, that the customer pays. How you turn this into fiat that you surrender to the state is up to you - I sure as hell would pay it.
Why like that? Because the physical products are in the purview of the state. You see, there is the expectation of the amount of money spent to make your existence and utility of public things like business license, road, etc, to be paid with by taxes.
Here is where you don't pay taxes, on the BTC as income. There certainly is some pressure to get people to think they should, but it makes no sense. Until you convert that BTC to fiat then it's out of the purview of the state/fed. They can tell you otherwise but the only legal thing they really hold over you as far as I know is the limitation of business to people on the "black list" that no US citizen/corp can do business with in no respect to what that business is or the currency/property/IP. I wouldn't be surprised however if some people are brought to litigation since the expectation of defense is low when you're fighting the gov; it'll be a question of how long it takes to fundamentally get thrown out as BS in a court level high enough to count.
I'm not saying it's impossible for someone to pursue income tax/property tax for your BTC, I'm saying it's wrong and illegal. It would be like taxing a citizen of Mexico because they look at the USA with binoculars from their home near the border and otherwise have no interaction. Taxation online is a decent example of a way to look at BTC taxation. Seeking taxes across borders is too complicated, but also it's a loss of property in the purview of the state that is no longer responsible for so the point of seeking for the selling state is weak. Well, BTC isn't in the purview and until it leave it's own global decentralized realm to become fiat (ok, it doesn't "transformer" but your ownership of something does) it shouldn't be something to be concerned with. Think about it like this as well, banks are regulated and FDIC insured, BTC isn't, so you're saving the government money pre-conversion.
When someone buys from you, you treat it like any other transaction. This means if it's online you can treat it like the state does: for out of state with no agreement there is no tax, with agreement there is tax, and within state online only tax if there is sales tax in the state. So you can set the tax at whatever an approximate USD value is at, that the customer pays. How you turn this into fiat that you surrender to the state is up to you - I sure as hell would pay it.
Why like that? Because the physical products are in the purview of the state. You see, there is the expectation of the amount of money spent to make your existence and utility of public things like business license, road, etc, to be paid with by taxes.
Here is where you don't pay taxes, on the BTC as income. There certainly is some pressure to get people to think they should, but it makes no sense. Until you convert that BTC to fiat then it's out of the purview of the state/fed. They can tell you otherwise but the only legal thing they really hold over you as far as I know is the limitation of business to people on the "black list" that no US citizen/corp can do business with in no respect to what that business is or the currency/property/IP. I wouldn't be surprised however if some people are brought to litigation since the expectation of defense is low when you're fighting the gov; it'll be a question of how long it takes to fundamentally get thrown out as BS in a court level high enough to count.
I'm not saying it's impossible for someone to pursue income tax/property tax for your BTC, I'm saying it's wrong and illegal. It would be like taxing a citizen of Mexico because they look at the USA with binoculars from their home near the border and otherwise have no interaction. Taxation online is a decent example of a way to look at BTC taxation. Seeking taxes across borders is too complicated, but also it's a loss of property in the purview of the state that is no longer responsible for so the point of seeking for the selling state is weak. Well, BTC isn't in the purview and until it leave it's own global decentralized realm to become fiat (ok, it doesn't "transformer" but your ownership of something does) it shouldn't be something to be concerned with. Think about it like this as well, banks are regulated and FDIC insured, BTC isn't, so you're saving the government money pre-conversion.
It depends on the local law what it defines taxable. But using simple logic, since bitcoin can be considered a digital asset which you are acquiring, you need to pay tax for that, as in most countries, anything that can be declared as asset is taxable.
But the big advantage with bitcoin must be, until we declare how much we are holding, we can delay the taxation. So, I believe there will be no hurry to pay tax or to concern about paying taxes as we are all still into collecting phase of bitcoins and these taxes will be applicable once we switch over to spending phase.
But the big advantage with bitcoin must be, until we declare how much we are holding, we can delay the taxation. So, I believe there will be no hurry to pay tax or to concern about paying taxes as we are all still into collecting phase of bitcoins and these taxes will be applicable once we switch over to spending phase.
Probably in some countries that have declared the legality of bitcoin already have binding regulations against bitcoin, as well as business income tax rules in bitcoin. This is different from countries that havent been declared legality. But not prohibited its use. Of course still have the freedom to do business with Bitcoin.
As of now, there remains to be no very clear pronouncement or taxation framework that is acceptable by all countries as far treating Bitcoin and doing business with the cryptocurrency. Each country can be different. And there are countries which still refuse to make regulatory guidelines in dealing with this new form of "money".
Just like any sales, when you sell something then it can be subjected to tax...maybe a certain percentage of the total sales. As to the income tax, in case you don't encash or convert your Bitcoin into fiat money then maybe there would be no income yet to talk about.
However, as I am implying here, we are still dealing with grey matters which hopefully can be clarified and be given much more details as months and even years go by. Cryptocurrency is still relatively new and we all know that most governments do not act swiftly which I prefer rather than they do and make things very restrictive in doing business with Bitcoin and other coins.
Just like any sales, when you sell something then it can be subjected to tax...maybe a certain percentage of the total sales. As to the income tax, in case you don't encash or convert your Bitcoin into fiat money then maybe there would be no income yet to talk about.
However, as I am implying here, we are still dealing with grey matters which hopefully can be clarified and be given much more details as months and even years go by. Cryptocurrency is still relatively new and we all know that most governments do not act swiftly which I prefer rather than they do and make things very restrictive in doing business with Bitcoin and other coins.
You might also want to consult a business or tax attorney on this issue.
My personal opinion on taxes are that they are a good thing if they fund good projects.
My personal opinion on taxes are that they are a good thing if they fund good projects.
it depends not only on your country but also if you are running a business activity, if you are a merchants then yes you must pay the taxes on top of your generated income
if you are private go ahead and ignore all this, don't declare anything, you probably don't this often anyway, but i'm sure in case you are selling expensive stuff like an house or a yacht or something else, you must declare
if you are private go ahead and ignore all this, don't declare anything, you probably don't this often anyway, but i'm sure in case you are selling expensive stuff like an house or a yacht or something else, you must declare
Hi,
Is there anyone knowledgeable about what happens when I sell, say, books and accept only BTC as the payment method? Is it taxable or what? Does it count as an income, since I won't accept any actual money that governments accept?
Thank you
Is there anyone knowledgeable about what happens when I sell, say, books and accept only BTC as the payment method? Is it taxable or what? Does it count as an income, since I won't accept any actual money that governments accept?
Thank you
Yeah - this depends on the country the merchant and the buyer are based in and the regulation of crypto in that country is. It ranges from tax free to illegal to transact in crypto.
Hi,
Is there anyone knowledgeable about what happens when I sell, say, books and accept only BTC as the payment method? Is it taxable or what? Does it count as an income, since I won't accept any actual money that governments accept?
Thank you
Is there anyone knowledgeable about what happens when I sell, say, books and accept only BTC as the payment method? Is it taxable or what? Does it count as an income, since I won't accept any actual money that governments accept?
Thank you
This depends on your country. But in my opinion it shouldn't count for taxes since they will cut that part in case you don't sell your btc for cash. I don't know anything particular for the accepting bitcoin via online store but I know that you could see to sell it here on bitcoin talk, https://www.openbazaar.org/ , https://bitify.com/ . But yeah best would be to see that from the legal side since you don't want to have problems with a law in future.
Hi,
Is there anyone knowledgeable about what happens when I sell, say, books and accept only BTC as the payment method? Is it taxable or what? Does it count as an income, since I won't accept any actual money that governments accept?
Thank you
Is there anyone knowledgeable about what happens when I sell, say, books and accept only BTC as the payment method? Is it taxable or what? Does it count as an income, since I won't accept any actual money that governments accept?
Thank you
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