Topic: Bitcoin and Tax - page 2. (Read 232 times)

This kind of discussion is already present on Bitcointalk.
Already in 2012, here, in Defend Taxation, taxation was described as extortion.
Furthermore, Is taxation theft? debate already has 1351 replies.

This thread topic is how is taxation possible and its relationship with the so much wanted anonymity.
So please don't derail it, there are places you can express that opinion about taxation. And keep in mind that I don't disagree with your opinion.

The rates differ per country but it's usually treated as part of Capital Gains. For some countries who don't have a specific law, I would assume that they would consider income derived from trading/investing/mining BTC as part of ordinary income subject to regular income tax.

This was kinda true when KYC on exchanges and custodial services wasn't a thing. Today, almost every centralized platforms that you deal with would ask for your information. That means it became easier to identify people who converts their BTC for fiat. Another thing is that almost everyone uses these exchanges. There are only a few people who trades in real P2P and DEX.


I'm not sure how this puzzles you. You decide to trade on an exchange that collects your email address and identification and you still expect to be anonymous?

By the way, BTC isn't an anonymous coin to begin with. It's pseudonymous. You can try to hide your identity as the owner of an address but you cannot hide your transactions unless you use mixers/coinjoin and avoid centralized exchanges/services.

It looks that way because you have to declare the sources if you want to declare all your income (including crypto).

Bitcoin has been having significant impact since it was created in 2009, but only those that hold it knew this at the time.

How? Even most people still convert Bitcoin to fiat for daily spendings, and when using p2p, people also interchange fiat and Bitcoin, I do not see how this is a problem. People that are core Bitcoin users still do not have options than to make use of fiat for so many reasons. So, how will fiat be affected when people are still making use of it for daily purposes?

Yes, but most people are using exchanges and custodial means to buy cryptocurrencies, this should not be a problem. Also there are many fiat based businesses evading taxes.

Most countries are not yet taxing Bitcoin and crypto investment in general for now, but there would be amendment in the future. I think taxing cryptocurrencies investment in US has been effective. The taxing is just like normal taxation, but the taxing can differ from one country to another.

Do not forget Binance can track your capital gain, they can comply with the law of a country, and people to report their capital gain and pay their tax.

You are right, anything custodial makes Bitcoin not to be pseudonymous. Bitcoin is not anonymous but pseudonymous.

Yes. But people do not care about the pseudonymity, that is why trading volume on decentralized exchanges are not much compared to centralized exchanges. Even most people that are using decentralized exchanges first bought cryptocurrencies from centralized services.

In my country the gains are calculated between the moment you bought Bitcoin and you sold it or purchased anything with it.


It depends. A lot. If you convert at a centralized exchange, you provide your details (KYC, card details at buying, bank details at withdraw fiat, ID when you made Binance card, ...) and it depends if the exchange sends those details to your govt or not, and it depends even more if your govt asks for those details.
If you exchange anonymously, P2P, in cash, then yes, you can elude law. In the rest of cases, you have the chance to be caught for misreporting/not reporting the gains.
I don't say that this is easy endeavor for the agencies, but it can be done.


It may worth mentioning that Bitcoin is pseudo-anonymous. This means that the funds on your address and all the transactions made with it are publicly available. If somebody (an exchange) links that address to your person, anonymity is lost.

Regarding the taxation of Bitcoin, I would like to know your views.

I think that the development trend of Bitcoin is unstoppable. It took only ten years for Bitcoin to have a significant impact on the world. Gradually, Bitcoin will gradually enter the supervision of the government. If Bitcoin is regarded as a kind of currency, it will affect the original legal currency of the country. However, if Bitcoin is used as an investment commodity, it is bound to face a problem— -tax.

I would like to ask how other countries currently tax Bitcoin. In my understanding, it is difficult to find if Bitcoin is converted into legal currency. In China, we transfer cryptocurrency to others through Binance, and at the same time receive transfers from other people's bank cards. In the view of Bank of China, it is just a simple transfer transaction. If Bitcoin's hash address is one-to-one correspondence with the person, then Bitcoin loses its anonymity. This puzzles me. Taxation and anonymity seem to be opposed.