Topic: Crypto Taxation (Read 4531 times)

Exactly. Centralized exchanges will prove to be the easiest way for governments to collect taxes from their citizens. There's no other way around it. The hardest part will be collecting taxes from decentralized exchanges and in-person trades. That's largely because these solutions don't require ID verification of any kind. A decentralized exchange that complies with KYC/AML regulations is not decentralized at all, making it possible to collect taxes from it. This alongside privacy coins like Monero, BEAM, or Grin, will make crypto taxation quite an impossible task. That's why we've seen how recently governments (especially the US) have been interested in tracking down privacy coins in their entirety. Apparently a Blockchain analytics company called "CipherTrace" has been able to track & trace Monero transactions. If their tool is as they claim it to be, then governments will be able to successfully collect taxes from Monero users.

Nonetheless, time will tell us what lies ahead with the future of crypto. If taxation becomes widely successful, then crypto/Blockchain tech will be considered as legal in the mainstream world. Otherwise, expect a massive crackdown on the entire industry. Ban or no ban, crypto will always exist thanks to its decentralized and open source nature. Just my opinion

It will be easier for government to tax crypto when they have the full control over the exchanges. This is what they are going to do when they want to really tax the crypto, they will just hand these exchanges in the neck let it spit who uses their exchanges, track and monitor them then tax the shit out of their profits. Centralized exchanges will be likely to be the one that is going to be a weapon for this, and decentralized exchanges will be out and will be prohibited. crossed-fingers.

KYC will be implemented every where, any ICOs will implement a KYC policy, any exchange will have KYC policy and any wallets will have KYC policy. I don't really know how will they do this but this is the only way that they can control what's going inside and outside just for getting a tax.

the government is too cruel in treating unauthorized civilians. as we know, that the FIAT currency is the opposite of a decentralized currency where no one will want to be responsible for the mistakes of an individual when he uses a decentralized currency. Whereas in full it can also be said that all mistakes cannot be transferred to one user of decentralized currency who is disadvantaged, for example Ethereum, Vitalik will not reply to your report for losing your private key or having your assets stolen. He will pass all the blame on you.

Then FIAT has an agency that plays a central role in overseeing the circulation of their money. This control also plays an important role in controlling the distribution of the amount of money. In addition, with the existence of a centralized party, this causes when a complex problem occurs, the company is also involved in the problem. That is, the individual is no longer assigned all the blame to him.

The conclusion is, crypto users already feel aggrieved by the absence of assistance from the government or companies related to the government in helping to solve problems that occur as the example above. As for FIAT, there must be action from the government to help solve this problem.

Then why does the government suddenly want to ask all of us for money by imposing tax regulations?
This is clearly unfair. We are already taking huge risks alone as users of the decentralized currency and why should we still be burdened with government interference to cut our profits?

All the regulated exchanges if it is legal in their country would have the KYC done and people will have to file their incomes from the crypto while filing for the tax purpose just like income from stocks. though each country may have different laws regarding crypto or how it is calculated then may differ but overall, one must pay tax on income from it. If avoided, then it could lead to penalty.

But we can't actually use it, not in all of the countries we can use bitcoin to buy goods. Usually we convert out bitcoins and even other crypto currencies into fiat and in terms of our local exchanges, even though I am using their servcies, I can't actually see any taxes deducted from the converted amount. Let's just hope that it stays like this.

A crypto tax per person is unlikely to happen as they are finalizing the regulations for crypto. Since they don't create cryptocurrencies, they will seek to tax the brokers. They require KYC to control the cash flow. I can believe that in the future they will find a way to tax everyone involved in crypto trading.

Exactly. You only need to pay tax if you exchange crypto to Fiat. If governments decide to tax crypto transactions directly, then it'll be a nightmare. I'd imagine that the crypto/Blockchain industry's growth will stifle because of this. Governments and everyday people need to cooperate in order to make crypto land a better place. By taxing crypto transactions in a fair manner, everybody wins. It's your responsibility to pay your taxes from your crypto earnings (if you decide to cash out for Fiat) in order to avoid facing fines or even jail time. Sadly but surely, governments will collect taxes via centralized exchanges which force KYC/AML measures. If your identity is under the custody of centralized exchanges, taxing crypto becomes an easy task.

Needless to say, things would've been different if everyone started to use decentralized exchanges on top of centralized ones. In the event governments are unable to successfully tax crypto transactions, they'll simply declare cryptocurrencies as illegal. Only then, a small minority will be using crypto/Blockchain tech for transactions "under the radar". But mainstream adoption will never be the same.

Nonetheless, let's hope everything works out smoothly in the subject of crypto taxation. If all goes well, governments will give the "green light" for crypto/Blockchain tech's growth in the mainstream world. Transparent cryptocurrencies like Bitcoin and Ethereum will most likely have the government's favor, while privacy coins will see constant opposition from central banks and governments alike. People will ultimately decide whenever they'd want to cooperate with the government by paying their taxes or not. Just my thoughts

But how will they implement it?

I mean they can't just pinpoint someone using cryptocurrencies. Those investors are the only ones that know they have cryptocurrencies, and most of them are really hiding that they are earning a lot of money from it. At the end of it all, it all depends on the person if they will pay for those taxes, I am not saying that all of us are like that, I am saying that there are those kinds of people.

No matter how i disagree with this crypto taxation, still i need to follow the Government here in my country if they were to impose tax on Bitcoin/cryptocurrency. Bitcoin has a lot to offer and its the main reason why Governments wanted to benefit from it. If its already legalized in a certain country, then maybe the Government has every right and will find the most effective and easiest way on how to make profit out of decentralized currencies.
Obeying the law and paying taxes is the best way to have a peaceful and abundant life. So, it would be fine for me.

This should not be considered as a standard rule, not all countries have the same treatment .
What if you buy bitcoin and then convert it after? Why would you pay a tax for that when you don't earn income?

Is a "decentralized government" exist? I thought every government are centralized.

If crypto is converted to fiat currency then crypto will be taxed. Crypto is not under the control of a decentralized government so it is very difficult to collect taxes from here. If fiat is converted into currency the tax will usually be levied on our income. Banks will introduce cryptocurrencies and impose tariffs like Fiat. I think it is better not to have tax in the case of crypto everything can be exchanged independently and not after the bank's need.

You don't think so, but taxes are already implemented in many countries.
Crypto is considered as an investment and you are taxed based on the profits you earn.
The taxation occurs when you try to withdraw your money and send them to a bank account. If you don't want to be taxed you should better keep them in a stablecoin and in crypto space in general.

I don't think there should be any taxes to crypto profits.
However, most goods you buy in the store already has taxes in the price, so if we'll be able to buy with crypto that means we pay taxes already

We have to admit that there are countries which are friendly towards crypto, while some of them are not. Tax laws vary among different countries in the mainstream world. Some are fair in their taxation practices, while others are not. Given that most governments have started taxing crypto transactions from everyday people, we can assume that the industry is already legitimized. It would've been the contrary if governments were unable to successfully tax people's crypto holdings. But with many people using and patronizing centralized exchanges and wallet providers, crypto taxation should be easy enough to perform by said entities.

The real challenge would be taxing privacy coins. While most privacy coins are traded on centralized exchanges, anyone using a decentralized exchange to trade a privacy coin to Fiat (or vice versa) will make governments' lives impossible. Eventually, governments may end up banning or declaring privacy coins as illegal as they're unable to tax them successfully. Fear not, as crypto's decentralized and open source design will keep it going no matter what governments' regulations may be. The only issue would be getting access to crypto with Fiat currencies if they're banned from widespread use. My guess is that P2P or in-person trades will rise like never before as people use them more thoroughly for exchanging Fiat to crypto (or vice versa) without getting noticed. Taxation or not, crypto will be here to stay for many generations. Just my thoughts

In my opinion, if the income from crypto is large enough and stable per month, the government may impose taxes on our crypto income, meaning that the tax is based on fiat currency resulting from the withdrawal of exchangers.

But don't forget that you can make a lot of money with alt coins. Let's say you get really lucky in one year and make 100-200% return on your coins and covert them back into FIAT, some form of taxation would need to happen. I think taxation shouldn't happen as long as you hold crypto currencies. Taxes should only be taken into consideration when you convert cryptos into FIAT.

I asked the Indians who were in my contacts. Some have said yes, others do not and there are also others who do not know. Maybe because those who said no or do not know maybe they do not use services or even cash out bitcoin to fiat currency.

Here are some of their responses:
- As per government policy, it's high
- I don't know about the matter, Maybe
- If you withdraw huge money through a bank then a tax could be 20%. More than 50k, it will be captured in income tax, 50k in equivalent
- Before a little bit only, Nowadays many service tax deduction for the exchange apps
- I think so, I don't know
- Not that much but till now am just received a small amount of bitcoin only trying to get more
- Yes, It's just regulated, so the government going to make a law before March, BTC is illegal so it's new for Indian exchange, so they anything they want. Illiterate people in India don't know Blockchain, many scams occur in name of BTC, a Ponzi scheme, HYIP plans, and altcoins make scam so India banned in 2017 and again regulate it march 2020 after winning in courts

i dont agree since bitcoin is decentralized without interference of any gorvenment

unless you have a big minifarm or company who's make coin in a city or country. small player no needed cause we pay electricty and buy some product there's already tax on it

is it true that crypto taxation cost too much in india??

In many countries, such types of taxation of cryptocurrencies as VAT and sales tax have been excluded. But some types of taxes do exist and they also differ for individuals and legal entities. As for the authorities, it is no longer a secret for anyone that popular exchanges where buy and sell cryptocurrency are increasingly exchanging information and cooperating with the governments of countries.