Topic: Bitcoin taxation (Read 227 times)

Aren't you gonna pay some fee for making transaction?
As you may know bitcoin is designed in a way that you will pay some percentage of it as the miner's fee but not basically subjected to the government or to our country laws that one must pay some fees, it may be enacted but yet to know how legitimately is that information rather some form of restrictions where placed to us not to directly associates our commercial bank account to its transaction.

Bitcoin must not be a legal tender before government go tax am. The only thing bitcoin go need be na to dey legal for that particular country and government go tax am.

When I read the thread title, I been think say e relate very well with Nigeria. For Nigeria government don propose tax but I no know wether e don dey happen already. Anybody don dey tax bitcoin or other cryptocurrency for Nigeria. If yes, in which ways because me I go like to know it very well.

Bitcoin no need be a legal tender before taxation or regulation fit enter inside. The US taxation dey come as dem dey consider Bitcoin to be an investment assets wey be say when you make profits you suppose to be taxed. Bitcoin taxation never too popular and our country no go fit enforce am unless them dey ready to give Bitcoin a positive light for the country because anything wey the government dey tax go tell people say e dey legit but the government no go want that kind thing but still people can easily avoid the taxation as Bitcoin is a decentralized currency wey mean say people fit still use Bitcoin anyhow wey dem like without the government knowing about it to tax you.

Where problem go dey na when the government catch you and you no get record of paying your tax on your Bitcoin profits na when dem go come charge you to count and you go need pay the fine wey court go give you. Taxation of Bitcoin no be yet a big topic sha but if you're using a centralized exchanges and government want to enforce the taxation of a thing, e go easy for them as the exchange go dey commot the taxation for you and they remit to the government account.

Na true say Bitcoin no be legal tender in all this countries wey you mentioned, but for the fact say a country like Nigeria and USA dem no ban Bitcoin, dem allow am for transactions for dem countries, dat means say dem de entitled to collect tax. You fit to liken dis matter with imported goods inside a country , di importer go pay customs duties for di clearing of di goods, so far say di country allow di goods to enter dem country. Di advantage of a country wey make Bitcoin dem legal tender, be say e go create massive adoption for dem citizens.

It's pretty simple that the government of those countries are sadist and corrupt who want their entire population to stay poor except few elite hence they are penalizing on any earning opportunity and I think you should check what Indian government has done they have imposed 30% tax on profit and 1% TDS on every trade thus making it virtually impossible for trading and they have banned foreign exchanges as well who don't want to implement these rules as exchange will lose business and they already killed Indian crypto exchanges.

Here whose take the advantage that when convert to fiat they do it as a person through p2p transaction. Where they accept their transaction fee and pay us fiat which is very easy. The financial institution through which the fiat is being issued is collecting all their charges from its customers and paying the tax owed to the government.
In this case, those who are doing transactions are covered by tax. So legally there is no opportunity to evade or avoid tax here. Legal tender does not matter here.

this is just the whole truth. I was even finding it deficult to comprehend the part that the OP tend to be suggesting that the federal government of Nigeria tasks 10% as tax from Bitcoin HODLers. If they don't accept it as legal tender, it makes no sense that it would be taxed in a any form. And Bitcoin isn't even any kind of asset that's centralized and has the potential of being taxed even when it's not accepted generally by a group of people. It's possible and easy to understand taxing bitcoin Holders in el Salvador since it's clearly a legal tender and users can get paid in BTC and have thier worth measured in terms of Bitcoin which makes it a bit reasonable but talking about Bitcoin taxation in Nigeria isn't realistic at the moment considering the level of adoption and fights the federal government is currently putting on Bitcoin and crypto users at the moment.

It's even deficult to publicly identify yourself as a crypto person or even tag your transaction a crypto related transaction due to the high level of sanction we've seen at the moment and it's clearly means that regardless of the amount of Bitcoin you have in your portfolio, the government wouldn't even want to talk about taking it cause the moment they task any Bitcoin related transaction, it directly means that they've made Bitcoin 100% legal in the country and I doubt they would want to go that open at the moment.

Thanks for the wonderful piece of information. I have been long in Bitcoin but I have not noticed this aspect of taxation for buying and selling cryptocurrency between users. I know of taxation in some altcoins during trading in DEX, maybe I have not been paying too much attention to BTC transactions or the tax might be too insignificant that I never noticed. A link to broader explanation on this subject would have helped a lot.

I'm still wondering how and why they want to earn tax from Bitcoin in a country that Bitcoin users are treated with disdain. The ongoing crackdown on crypto users in Nigeria should be a clear indication that our government does not have any justification for taxing proceeds from crypto and even if they do, I wonder how they will achieve that when most of the trades are done via p2p.

It is being taxed because people are using it for economic purposes. Even though bitcoin has not be proclaimed a legal tenders in these countries, doe not make it illegal in those countries, hence the reason why they are taxed. I don't know if during your research you saw a place where it said that those countries mentioned above ever said bitcoin is illegal. That they haven't been declared as a legal tender, does not mean that the authorities in those countries haven't been made aware of it's existence (bitcoin) and it is believed that whatever that's use to carry out a lawful business within a country should be taxed, that's why bitcoin is taxes in those countries.

is that really so?  For a country whose government has placed order on all Fintech banks and physical banks to shutdown/freeze accounts of it users suspected to be into cryptocurrency trading, yet the financial act bill of 2023 makes a demand for a 10% tax from profits made by cryptocurrency traders. Isn't the government contradicting themselves? because how do you demand a profit tax from what you are vehemently fighting against and blocking all channels through which  all of it's users can have a flexible and efficient access to it use.
No where in the world will any person in his right senses agree to pay even a 000.1% tax fee to such a government.

Cryptocurrencies not only Bitcoin has been a major player in the economic growth of many countries willing to accept it or not and since it has been a growing choice of investment for many users from different regions, the way to calculate your tax is simply to know if there was a capital loss made on sale or capital gain made after sales and knowing this, determines the amount of capital gains tax to be paid.


Brazil is among the countries in the world that make money or has learnt to better improve her economy by charging a flat tax of 15% on all investments regardless of the size or portfolio.
The strategy of taxation not only helps to regulate cryptocurrency, but it helps to take advantage of and capitalize on the fact that the cryptocurrency market is growing and there's need to join in now, while there's also the addressing of concerns about tax evasion and financial management.

The Nigerian government also taxes cryptocurrency or better put, digital assets and Non-fungible Tokens.
They are known and currently included as assets liable to Capital Gains Tax in Nigeria.

I agree with you to an extent, but I also disagree with you on somethings, firstly When I say Bitcoin is not a legal tender, it doesn't imply that Bitcoin is illegal, Bitcoin is not the legal tender of the USA, that doesn't mean Bitcoin is illegal in the USA,  same thing goes to Nigeria, Bitcoin is not naira which means the government doesn't have a control over it, taxes are only paid when the government of that country is in full control,  taxes are paid in naira I wonder what it would look like when a country like Nigeria accept taxes in Bitcoin, and my question was centred around why taxation on Bitcoin, if Bitcoin is not the official currency of that country  but with some explanations made I  have gotten an answer to my question.

Wrong, bitcoin is not generally banned to illegality in all the countries,  let's also understand that between banned and illegality which is to say banned can be restrictions that the government financial sectors wouldn't be able to associate in facilitating on bitcoin transactions but every private or corporative associations are eligible basically depends on the choices of the individuals.
So as you can see it happened in our country Nigeria which the government proposed and banned crypto transactions at the government levels but yet we as individuals are still operating transactions with bitcoin on p2p transactions which we can also exchange for fiat of our naira.
So if it was pronounced an illegal everyone caught on the act of associating with the bitcoins would be charged for law violation and would be penalized for it depending on the law of perpetrators.
That wouldn't really matter If you manipulated to exchange for the or anonymously p2p. The law would specially state that whoever that's caught associating with the bitcoin While in the country has violated the law.

So Op, you just have to get it right that there are countries that the governments doesn't support unlimited ness of bitcoin but yet it doesn't mean that it's an illegal operation.
These basically means that it's not a legal tender because the banks won't accept it for deposit, withdrawal, buying and selling.
It all lyes between a person to persons transaction then optionally you can digitally exchange for fiat through an exchange platform

While I would leave to with an amazement, it's fortunate to let you know that El Salvador is a country that generously accepts bitcoin as a legal tender which has served a world record to such great height of national adoptions of the bitcoin digital technology.
https://insights.som.yale.edu/insights/el-salvador-adopted-bitcoin-as-an-official-currency-salvadorans-mostly-shrugged#:~:text=El%20Salvador%20took%20a%20different,Bitcoin%20as%20a%20legal%20tender

After much, it's believed that only countries that it's federal accepts transactions unlimitedly are deemed to require taxes because they pays their taxes through bitcoin too so sensibly no country that would pronounce bitcoin an illegal currency would demand for taxes for taxes of illegal operations and illegal inventories.
So I hope that you Op isn't misunderstanding Taxes and Charges for penalties.
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This is one of the major thing or reason they are fighting all the private bitcoin companies like mixers and others so that they can control bitcoin fully and collect tax from any transaction each person will do. And once they one come to pass then the purpose of creating bitcoin has been defeated. Even now the too the top reason of creating bitcoin has been defeated and it was to pay things online if I am not mistaken. But nobody remember that part of the project again and everyone is going to the part of investment.

They don't want bitcoin to be legally tender but fighting to make sure that bitcoin should not take over the local currency. And to make sure that those who are using bitcoin pay dearly. And tht is why the taxation is coming heavily.

Not legally tender does not mean Bitcoin is banned in those countries you just mentioned. The US Govemment are the are among the top highest hodler of Bitcoin.

Portugal and Germany also have capital gains tax on Bitcoin too. ( Gave full details on the other thread)

When you make a transaction with Bitcoin for the sole aim of profit making there is a taxable fee between your purchase price and proceed of the sale, it is not only limited to selling of Bitcoin but also when Bitcoin are being directly exchanged to another coin and maybe used in purchasing a goods or paying for a service.

According to the research I made online how long you Hodl a Bitcoin before selling it plays a major role in the tax rate the Bitcoin will have, additionally if you earned the Bitcoin through other means different from buying it, then there is a need for you to report it,

In India which is one of the lead countries when it come to Bitcoin there is taxation on Bitcoin transactions, staking, gifts and airdrops,
While In the USA Bitcoin is only subject to taxation on capital gains, in our country Nigeria there is a 10% tax on profits made on digital assets Which includes Bitcoin according to the financial act bill as amended in 2023.

In all this countries Bitcoin is not a legal tender,

My question is why Bitcoin taxation in countries in which it is not a legal tender?.