Topic: Best EU country to tax profit on crypto currency trading (Read 8392 times)

Anyone interested in this, might want to check out the solution discussed here:

https://bitcointalksearch.org/topic/0-tax-when-cashing-out-crypto-5080391

I've only so far heard of those too, so I suppose they could be running up your candidate list to check for sure if that's the case, because I've not had to research into that thoroughly.

Portugal 0% on BTC as an individual. (For now)

Or.

Get a company in Antigua and move your address to antigua too. Only need to stay in Antigua for 7 days a year to go under there tax system. Thats 0% and no accounting.
This will be good for a PP.
Get a Barclays bank account for your company and your ready to roll.

All legit and tested. Just dont stay in your own country for more than 6 month a year.(EU country). And dont own anyting in your home country. You can own a summerhouse,

Trader will be tax free only if the country of residence does not require the person to pay the tax
or if he manages to escape from tax authority by legal of illegal means

Traders are "legal persons" and are usually liable on income tax in country of residence.

I think that taxes for traders are hard to stress because they do not have a name on the state tax board.

Slightly different from the Exchange who set up the company in a country where the Exchange is registered to be imposed on its income tax.

its simple like this:
Trader = tax free
Exchange = taxable

Can someone confirm this?
Thanks.

Is this related only to legal entities (companies) or also physical persons?

Malta is best EU country to get tax profit from cryptocurrency most of the exchangers ico company are lining up for Malta and Malta and Gibraltar both the country want to become world destination for blockchain asset

False, you pay 19-25% income tax + 14% healthcare tax..

33-39% in total.. stay away from Slovakia..

As long as what you are doing is legal then you should not get in trouble by having an offshore corporation, some countries still need that you report all your income even if it is earned overseas and if you do and your company is structured properly then you are fine, the problem is that many people are doing illegal stuff with those companies and that is why many people think that those that do that are criminals.

Hi,

I got an idea and would like to think out loud.
Did anybody try to withdraw money through visa bitcoin card? Now there are many visa cards that are linked to your wallet and you can withdraw or buy with this cards.
So if someone lives near the border in EU and can travel to next county to him and withdraw from ATM machine, is it possible for his local tax authorities to detect him?

I really think it doesn't work like that. If you want to use your money, it doesn't matter where you have deposited it. You will have to declare it, tell where it came from and pay your taxes. So the only regulations you need to care about, are the ones of the country you are in, and want to spend your money. I'm not an expert of course, but I really think that's the way it works. I don't know where you are from, but from what I know, most countries in Europe still don't have any well defined laws about bitcoin, so if you keep it low you don't have to declare anything. If you normally go over 10K or 15K, then you will have to explain where that money came form, and you will pay taxes.

So, we come to point that: "Pay your tax", so Govs benefit more from crypto than people. is there any tax relief schemes?

"Criminals always win in this system"

Nope. I get what you are saying, but criminals never win in the end. Everything we do in life comes back around, unless you ask forgiveness and are forgiven. Someone who sends their money offshore to avoid taxes... they will not win in the end. It is just how it works.

Bingo.

Jeff just posted about this issue @ https://www.youtube.com/watch?v=aM-Mmxm0OEQ&feature=em-uploademail
Like he and me are saying comes down to point 5 in the end. Like I've said, all the work and risks by registrering your corporation in a foreign country for the very tiny time being is just plain dumb, especially when you are a EU citizen trying to escape taxes to another EU country. You cannot win in the same system... that's the point. Since the inception of the EU, sovereign nation states were already transferring power to the EU and it's still going on, brexit or not and eventually, every EU country will have the same laws. It's certainly no coincidence that one law in the USA is also at the same time being passed in the EU and Australia, got my drift? You want to win? You move out completely overseas with the most corrupt or small government or suffer like the rest, because there will be a time when the barbarians are kept lose on those that do have something vs those that don't own anything and that's by design (i.e. socialism, the never ending wars on anything (wages, gender, race, income, etc.)). Why do you think muggers and thugs are always operating in their own neighborhood and never go to the richer places and nothing is done about it. The western world is already socialized/domesticated, at least you can own and use guns in the US, because if you own one here in the Netherlands and use it for your defense, you go to jail, even when you defend your life and this has happened and was widely reported on the msm. Criminals always win in this system.

the whole point is that while the legal field is not defined
then, accordingly, you can not legitimize profits

Correct, taxes are supposed to be paid on the place you live, unless you create a corporation in another country and the profits belong to that company so if you want to pay taxes in a country with lower taxes you will need to move out, that is why many people do not bother to do all of that since the profits they could get are not that great to make that big change in their lives.

I've never said that you will "never" get caught doing this, especially when it comes to tax evasion, which is the opposite of tax avoidance, which the latter I clearly spoke of.

There is a 6th option, which is the agorist way (peer-to-peer / individual to individual, like localbitcoins, etc., which would be tax evasion.
I do NOT recommend anyone to commit tax evasion. If you are smart, you'd pay as minimal taxes as possible, which is the route of tax avoidance and that's exactly how the rich do it and know people who do this using overseas trusts and some being a resident of another country.

Why do you think Mark Zuckerberg pays himself out $1 a month for salary, so he pays the least possible taxes on capital gains from his stock, wouldn't you do this if you were in his shoes? You cannot do this in The Netherlands as a resident of this country, as the Dutch irs STILL taxes you when you run a corporate business, despite paying out $0 for your salary, they still maintain a minimum salary the ceo has and will take taxes from it. And my friend who is the ceo of one of his enterprises who doesn't pay himself out any salary is required to pay taxes over this fantasy salary the irs is arbitrary making up, because they have a monopoly on force and are part of a criminal organization.

I agree with you that the working class is by design being robbed the most. They're slaves of 50% of only income tax a year, not withstanding all the mandatory payments that have been regulated and enforced. The fake news MSM talks about The Netherlands as the tax heaven of the world, what a joke. The rich people in my country are looking for safe havens far away from this country, including the royalty and many high level government employees.

The 1.2 - 1.5% tax on equity is about to chance, I'm 100% sure of that. It started with the leftists running this country for quite a while, being catalyzed by the Panama papers and now the Paradise papers. It's the topic of the day and the lies and propaganda are being displayed on MSM and many other channels on TV, it's a matter of time until they introduce capital gains tax and higher taxes for everything, which they do gladly do on a yearly basis anyway (inc. that of tobacco that next January are taxed an additional 10%). The stupid sheeple cheer for it and want to take more for the rich and like always, the regulations that will follow will hurt the poor the most (talking about karma). The rich will simply now emigrate to places like Hungary and South America and now the government will have deficits to be replaced by once again, the shrinking middle class, which then needs to be filled by the entire bottom of the pyramid, the poor.

I don't know the law in Germany, but I wouldn't be surprised that this is going to change very soon, just like in the Netherlands. It's how a socialist system is setup to be: take, take and take from everybody, except the plutocrats, by using divide and conquer tactics (right from Hegel and Marx). That's why socialists are called useful idiots, because if they ever read the sources of socialism and have a brain, no sane person would be one, because I'm sure nobody likes 100% taxes (i.e. no property rights, including your own body). When nothing more is to take, you're in the end game of the system, like Venezuela, Weimar Germany, etc. and then they want to get rid of in their eyes the useless eaters, which will be once again be, the poor, because they want to replace them with robots. And since almost everybody, except the elite are poor in socialistic countries (how they love equality), most folks will therefore be gone. Fits right in to their eugenics plan to cull 80% of the world population.

That's why I think plan 5th is still the best option, if you value your life and that of your family. If you have the balls, live off-grid and are streetwise, go plan 6, but I wouldn't recommend it. The other options take more work, risk and the system loves it how you play in their arbitrary setup and they can chance the rules at any time during the match, so you always will be dependent and in fear when you have a lot of wealth. The very few rich people (from nothing to multi millionaires) I personally know are considering plan 5 for quite some time now as well. Just my take on things.

Well you mention to never get "caught" that implies tax evasion.
But there a for sure legal possibilities to lower the tax and not evade them
but I think it would require to do this over more countries.

Look at how they (the rich) legally avoid paying VAT on airplanes and ships
by registering them in Isle of Man and Tax Authorities can't do shit about this
because is 100% legal.

The system is anyway designed to tax the working class and to keep the elite at the top of the pyramid.
For example the things you say about NL 1.3 - 1.5% tax on equity is a small tax to pay if you do it once a year.
A crypto whale could do this for example withdraw 200-250 K€ once a year to comply with regulation.
I think this amount of fiat is enough to live a good life in EU within the period of 1 year of maybe event 2.

Also currently one of the country that if favorable to common people when it come to crypto is Germany.
They treat BTC as private money and the requirement is to keep it at least 1 year in your BTC account
before cashing out into FIAT that means once bought not trading should be done any more and you can withdraw after 1 year
without TAX.

This is at least what I have read on internet.
So the alternative would be to move to Germany for a year or so if you plan to withdraw a bigger amount at once.

I think that in European countries very strict tax laws, but nevertheless. If you turn your attention to the Eastern region, then there is more without limit and therefore if you apply the European laws to Russia or Ukraine, then the people will live. The fact is that the infrastructure does not pass at all under the European Tax Code.

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 

when talking about bitcoin profit taxes, which is usually paid by private people, not companies, it might be better to look for a country where there is no tax on bitcoin profits at all.

I heard Denmark has no tax on it and Netherlands only 5%.
But I can not confirm this, only rumors.

I was doing a similar research an year ago.

Cheapest EU country just for Profit Taxes is Bulgaria. There you are paying just 10% as taxes. But still the money remain company's money. If you want it clean for you, you need to pay 5%-15% dividend taxes. In Bulogaria you need to pay and monthly ~80 social taxes.  It's mandatory.

Another good options are Malta and Croatia. For example in Croatia you could have a company and you are not obligated to pay yourself a salary (taxes respectfully).

Why are you limiting yourself on Europe?
There are countless offshore Banks where you can deposit up to 200k without having to care about taxes and such.
The thing is, if you want to use your profits to invest in something else then yeah you really have to get them taxed
so you can justify their existence. If you're looking that way, a "fundraising via bitcoin" would be a nice option if you
know what I mean, from there and on I don't think you're going to get taxed for your active capital.

Looks like that is the only way....

@vsyc:
It might be the best option to ask a tax consultant.
The rule with "half year" has many exceptions, so of course it is not enough to be tourist in a land.

It's best to really even really live in countries where Bitcoin can be legally used, because there are opportunities to obtain criminal penalties for illegal financial transactions in some countries.

Got it, so lets say I sold my GNT for BTC, in country that has tax 50% on income, and went to live in country that has tax 20%, after half year I decided to sell my BTC for fiat in latter country?

My point, if I understand this right, that there is no government/institution in the world to control profit when you sell one crypto for another. But there is capital gain tax/income tax when you sell crypto for fiat and do profit from that?

Speaking of half year, in some countries I can stay for half year as a tourist lets say in US/Canada, how that works in this case?

Profits from cryptocurrency is taxed nearly in every country.
(it seems "tax" is in english sometimes used as synonym for fee? otherwise I can't explain why so many people claim "there is no tax only fee for withdrawal/trading". This does not make sense, since real tax has nothing to do with any fees)

@vsyc:
It does not depend on where you are, it does depend on where you live (usually this is where you have your home or where you are more then half a year per year). You pay the taxes to that authority were you also pay all other taxes to.

until now crypto curency without tax
because crypto curency still not yet regulated, fee only use sending fee(transfer wire) and fee withdraw from exchanger

Tor or Proxy makes it very difficult to prove, considering that EU has "no borders".

e.g. I can be on fast train From Luxembour, picking up my friend in Cologne, before going to Amsterdam, and sale happened when I just entered 1st meter of Belgium "Hypothetically"

I can sell GNT for BTC being in Spain, and week after sell it in Luxembourg for Fiat, how that should work than?

I also would be interested on different taxes on bitcoin profits.

But the thing you described should be impossible. It does not matter where you withdraw your profits to.
You have to pay taxes in that country, where you lived at the moment you sold your GNT (so made the profit)

Hi,
Sorry if it another yet topic and I should use search, but I will appreciate any help in this topic.

Lets say I put 10,000EUR EUR on Kraken, buy XBT, and for these XBT buy GNT.
Than I sell GNT for XBT, and XBT for EUR, that in total 50,000EUR.
My profit is 40,000EUR.

So question is, how can I legalise this profit? What is the best EU country to do so (less than 25% tax)? Do I need to have a Bank Account there? If so, can I open it remotely?

Example that I looking for, is:

Lets say Austrian bank can tax you 20% on income, it will open Bank Account for me, where I withdraw my profit, they will charge tax on it and provide certificate that these money clean. I will, go to Estonia, will buy land, Estonian bank will ask me prove of income, I will provide this certificate from Austrian bank, they say 'Good Man' land is yours.

Do I see it right? Or how the process of profit legalisation works? What is the best country for EU man (no matter what country resident EU man is at point of time)?

Thank you.