Topic: Best EU country to tax profit on crypto currency trading - page 2. (Read 8388 times)

Sorry guys, but I think there are no good countries in the EU if you want to pay the least taxes. I know Cyprus was a good one, until they chased and heard in Dutch parlement one of the (libertarian) employees that was at the top of that Cyprus trust and they ruined his life, by stripping all his assets and destroyed his company. There is a youtube video of the entire hearing if you're interested.

The easiest is (or was, I don't know any trusted ones) a trust in a low taxed over income country.
A much harder thing to do (that is, if you don't want to get caught) is to manage an overshores bank account.
The third option is to get a second passport, buy property and operate a company (doesn't have to make much profit) in a country like the first option, but that carries much more work and responsibilities. Unless you married someone in another country that knows the law or you have connections, I wouldn't bother.
Fourth option is to be a permanent traveler / tourist. In most of your life, you'll own nothing, but if you like adventure and exploration, this would be a nice option.
Fifth and probably best option, is to move to South America or SEA and get a passport and declare yours null and void. Things will get much worse in the west anyway, to a point of and collapse of a totalitarian socialist state. Nevertheless, in the end, we probably will have a world government and pay 100% taxes (i.e. communism = no property rights and will only rent for the credits we get from big brother). For the time being here on earth, the fifth solution would be best imho.

That guy saying that Netherlands has 5% tax, that's completely bs. You pay 1.3 - 1.5% on equity above 25k eur a year when you withdraw crypto -> fiat once a year. If you do it more, you will likely be on the radar of the Dutch irs and they will see it as regular income, so you pay a tax of 50% on average up to close of 60%. I've asked a technical accountant and those were his words.

You can also start your own company and write off expenses to have more than the average joe, at the cost of doing more paperwork than something you love to do, harder work and good luck getting profits in a totally socialized country, where people don't want to buy, but get things for free at the expense of others.

Good luck and tell us how you journey will be, I think most of us would love a fellow traveler to succeed  

You simply can't do this.

As soon as you buy the property in UK or move back or show any business or personal connection to the country the tax office will deem your move to Germany as tax evasion and will tax your capital gains. If you don't declare your gains (which you are saying you won't) you would likely end up in court charged with tax evasion which is a criminal offence.

You need to clearly understand that you can't evade UK CGT by simply moving out of the country for 6months or even a year then moving back. Any move abroad must be seen to be a complete and permanent severance with you home country. A bank account, property, even a club membership or phone contract still remaining in the UK in your name can mean you are not classed as living abroad by the tax office. If you return to stay or have any business involvement with the UK within say 10 years (there are no hard and fast rules each case is examined individually and even after 20 years you could be considered to be a tax evader) you will become liable for CGT on your gains made abroad.

So you either pay CGT in the UK or you leave for good. There is no option to return. If you have benefited from the UK then maybe you should simply pay your CGT? In the year you need to hold your BTC in Germany before you can sell to be locally CGT-free BTC could de-value by 20% making the whole exercise pointless. In fact you may then decide to move back to the UK and end up paying CGT on the lesser gain so effectively having paid CGT twice!!

Read this to see how seriously HMRC/CPS take this issue and the resources directed to wards uncovering tax evasion.
http://www.cps.gov.uk/news/articles/prosecuting_tax_evasion/

Regarding Denmark; there is taxation, although it is often misrepresented in (danish) media.

The misunderstand is coursed by a answer from the TAX authorities regarding a firm receiving payment in bitcoin. The treasury did not see Bitcoin as a form of currency, and would therefore not tax the transactions.

HOWEVER, this changes a lot if you buy or trade bitcoins as an investments. Bitcoin is actually taxed harder than investments in stocks and bonds with about a 53% on gains and only 28% refundable on losses.

As a sidenote you can get some tax deductions from the electricity used on mining activities, however it might not be that beneficial to mine in a country with this high electricity costs.

As a dane I would give Germany a closer look IF i was a successful day trader or just had made a very good investment back in the early days. As others have pointed out it seems like you can hold profit for a year and be tax free + that lambo is gonna be considerable cheaper in Germany compared to Denmark

Source in danish:
https://skat.dk/skat.aspx?oid=2156173
https://skat.dk/skat.aspx?oid=2249418
https://www.bdo.dk/da-dk/faglig-info/depechen/depechen-artikler-2017/skat-ved-investering-i-bitcoins

Usually EU citizens are paying taxes in own country or in the county they reside 180+1 days.

I think every EU county is taxing profit and profit only, but it's best to ask a tax consultant/lawyer.

But I think you need to pay the taxes only when you decide to turn your crypto to fiat.

If taxes in your county are very high, there is always an option to make one LTD in Bulgaria, Croatia or similar country with 10% taxes.

Thank you for this very comprehensive reply. Best info I have found so far on the web. I am planning to take a similar move, but it is very hard to find reliable info.

I am a UK resident *but Italian citizen. I am planning to move to a country with 0% tax on capital gains to withdraw profits made with cryptos and then purchase real estate in the UK with those earnings.

I wonder:

- whether this is possible or any restrictions would apply from the UK govt side
- what countries (in EU or outside) offer 0% taxation on crypto earnings. I hear Malta and Slovenia but can't find any confirmations. Costa Rica and Malaysia look more likely but probably harder to become tax resident of (just speculating).

Any insight would be hugely appreciated!

There is a thing called 'tax residency' that might be different from you citizenship. By default, you are 'tax resident' of the country that you are citizen of.

From the moment when you've sold your crypto for fiat money ('tax event' happened), you owe the chunk of that amount to the tax authorities of the country(-ies) where you are 'tax resident'. No exceptions.

With the new OECD CRS reporting system, there is no way your tax inspectors would remain unaware about your actions with foreign bank accounts. All your transactions made in almost any country will be reported to your tax authorities automatically. And if you did not report it, then it's a big 'red flag' for them.

But if you are unhappy with the level of capital gains tax in your own country, you can change your 'tax residency' to a more favorable one, still keeping your citizenship.

Let's for instance assume that you are the resident of Latvia, where tax share of bitcoin proceeds might reportedly be as high as 31% (by the way, Latvian tax authorities do not care about the European tendency to tax cryptos with capital gains tax, offering instead to pay income tax in full - that might be the case in your country too). So you've made a decision to become a tax resident of 'Bitcoin tax heaven' - Germany.

1. You have to come to Germany, get a legal address (rent a flat), get a rental agreement, register with local authorities, get a bank account. Ideally, start doing something that would make you a local taxpayer (get a job).
2. Live there happily for more than 183 days in a calendar year. After that, you are legally tax resident of Germany. Prepare to fill in local tax forms.
3. Now the hardest part: give up the tax residency of your original country. It is not enough just to inform them (no country is happy to lose taxpayers): you have to prove that you have the 'substance' - present the documents from German tax office, prove that you live there and pay taxes there, have no plans to return, and have no many remaining 'connections' with your original country (most obvious - don't own real estate there).

If you've made it - OK, just be careful, if you are planning to get back to your original country after 'everything is done' - you will be considered German tax resident for 6 more years, since the moment you've left the country.

Whether it is so easy with German '0% tax' for cryptocurrencies after holding it for 1 year - not sure. There are some additional conditions, and one have to contact a tax lawyer beforehand. Also bear in mind that this rule might change sooner or later.

As VC George noted, offshore bank account might be a solution, but again (excluding all other potential problems), that would be a 'corporate' bank account. Are there any reputable crypto exchanges that would allow you to withdraw your money to a 'corporate' account? Bitstamp. for example, states explicitly that it works only with private accounts.

Have a look at estonia or Bulgaria if you want to open a company

You may be lucky to take advantage of this opportunity, because usually a country that declares legal bitcoin will always have binding rules for bitcoin tax payments.

Slovakia is a country you don't pay any tax for bitcoin withdrawals. I've lived there 4 years and bitcoin is seemed very legal by the government authorities.

After getting some good, but still limited responses, I assume that most people just do not declare income from crypto currency

In germany, like in 50% of EU countries, your profits are taxed based on your income, so add profit to income and tax it.

But there is 1 thing that can make germany bitcoin-tax heaven:
If you holded the bitcoins for one year or more, the profits are tax free.

Berlin serving as the technical hub for digital growth of the country haven't regulated much on the taxation over the bitcoin and other digital currencies. Based on this I think Germany could be making a better profiting if they make regulatory steps to tax based on certain limitations.

its complicated... (cause every source says something different and tax consultant usually have no clue)
According to the book "bitcoin for dummies" it is like this in slovenia:
"subject to income tax, just like any regular currency in the country"

And about denmark it is like that:
If you have some USD left from your trip to USA and without your intention to make money, you made some profit by selling them back to EUR, then it is taxfree in denmark.
Same is for bitcoin.
But if you trade it with intention to make profits, profits are most likely taxed.

I'm planning to write to denmark tax authorities and get a binding response (which will take up to 2 months) to be 100% sure.

In EU there is an agreement between states that says you will be taxed at the country where the profit is made. Just take into account that nonetheless you have to declare your gains again in the country where you have your tax address. What will happen is that in some countries you will be double tax, and then you have to ask for a refund of the task in your own country.

You just need an old good offshore bank account
I'm not allowed to say much here but I heard they even sell them
on the darkweb for a fair price. If you just want to spend your cash
without caring if they are going to call with questions then that or a similar
way is what I think you need to look at. Ofc legal is always better

Slovenia has 0% tax on Forex trading, and that covers Bitcoin too.

Malta probably is best county in crypto tradin and also is named as tax heaven.
In Germany If you will hold BTC over year you can sell them without taxation but today is too late for Germany so you need to move ot other cunrty.
Pick cuntry that have no capital gain tax : ) use wiki.

Put it up, just if someone missed and have other ideas. 

Thanks man, this is something that I can think of. It means I can spent on my personal expenses, like travelling, pay rent, buy food etc. Do I understood it right?


I do not want be resident of the country


I am not planning to become a resident just because of bitcoin, I plan to get tax certificate.

The Isle of Man has not capital gains tax but its rather cold