Topic: Crypto Taxation - page 17. (Read 4601 times)

Bitcoin does not need to be a currency for them to be able to tax it. If you sell a house and you make a profit of say $100 000, the government

would take their share of the gains you made in the form of "Capital Gains" taxes. (Each country has it's own guideline and tax exemptions) So what

most governments are doing is to class it as a commodity and thus having you paying "Capital Gains" on the profit when you sell it. The main reason

why they are not defining it as a currency is because they do not want it to compete with their local reserve currency.    Some countries tax

Bitcoin as a currency (VAT) and a commodity (Capital Gains) 

It quite makes sense. Since we can generate income via cryptocurrency it does makes sense to pay for tax, however paying taxes on money generated in decentralized network would absolutely ruin the meaning of it, but I have to agree that any taxes paid is for society betterment. Government warned their citizen not to deal with any cryptocurrency as it is volatile and risky, yet they run after cryptocurrency to ask for taxes claiming it is subject for tax evasion. Ironic isn't it?

But how do they know it came from illegal activity? And how will you able to pay taxes for it when in the first place they can't handle it?

I don't know if it is already applied to every country but I've read about how bitcoin is taxed, it goes like this, Once you hold long-term with bitcoin and gain from it you are required to pay for tax, and the percentage of what you need to pay from your gains will vary depending on your civil status. Does anyone know about it?

Because of the anonymous nature, Gov treats cryptocurrency as a medium of money laundering. And they are afraid that if all rich people convert their money into the cryptocurrency then there could be a possible critical situation in the economy. So they made the KYC mandatory in the exchanges. And also made the crypto taxable.

Well Governments always wants, that they get money from people by one means or another. Now the bad part about Cryptocurrencies are that the government cannot put tax on it and that is the reason they are trying really hard to make that happen.

If people started paying tax on Cryptocurrencies say by the means of exchanges (Government make their own exchanges and add tax on transaction) then there will be no worries to Government from crypto world, and they will happily allow people to use it because they will be monitoring and having tax from it.

They must find some good way to legalize it because people are still going to use it no matter what.

As many of the people saying that Government wants to secure transactions/reducing illegal transactions what I believe most is that they want to get money from crypto as well in the name of TAXATION.

I agree that the government seeks to minimize the misuse of cryptocurrency in illegal matters such as money laundering and other illegal transactions by issuing regulations.
Efforts to implement crypto taxes are still a hot topic where there are people who agree and disagree, because some of them think that applying taxes is something that the government should not do for users of bitcoin and other crypto currencies.
What must be known is, each country has its own considerations regarding the application of taxes and crypto taxes are also determined by certain activities which according to the government are feasible to apply. Thus, not all activities related to crypto will be taxed.

I do not agree if you say, the government efforts to impose taxes and prevent money laundering and other illegal transactions as an effort to prevent bitcoin and this technology from developing throughout the world.
Governments in many countries have now successfully cooperated with local exchanges in an effort to prevent money laundering and other illegal transactions by implementing KYC / AML.
If tax enforcement efforts are narrowed in scope, the government only needs to cooperate with exchanges to get their tax returns through the sale and purchase transactions of bitcoin and other altcoin users without making buyers and sellers feel uncomfortable about the obligation to pay taxes.

This my opinion, it doesnt have to be all true.

To OP, I understand what you are trying to say... I somehow agree with your thoughts because the government doesn't recognize cryptocurrency as a legal thing but there are some countries that are not very strict when it comes to crypto, they are open but need to abide by the rules. Like in operating an exchange, the company needs to pay for the license to continue the business. It's okay to pay a tax just for enough but not too much.

No, I don't agree with you.

In Utopian society, government has a right to charge taxation on any type of income earned by its citizens and spend the same for the benefit of mankind at whole within the boundary of the country.

Although we could argue that most of the governments are corrupt in present days and instead of spending government funds for the welfare of people, leaders are filling their own pockets. But that doesn't free us from the obligation of paying tax. Paying taxes should be viewed as forced donation. When we are earning money, it is our moral duty to donate part of it for the betterment of society on whole. But since not everyone is moral enough, the concept of taxation popped up and the system is not new, it is in existence for over 4000 years. Just imagine if we all stop paying tax, we all will left with more disposable income and can afford a little better standard of living. But what about roads, bridges, free education, subsidies? In the absence of taxation and governments, who gonna look after these aspects? So it's ok to sacrifice little on standard-of-living part and contribute for public good.

As far as illegality of cryptocurrencies is concerned, that doesn't mean illegal income should be left outside the purview of taxation. In my country (India), law states that all type of incomes are taxable, no matter legal or illegal. I personally think this is fair. On the contrary, illegal income should bear higher tax in my opinion.

Tax is identical to state income. I am sure that tax officials are very observant and will utilize the momentum of the popularity of bitcoin to increase state revenue. Even though Bitcoin or other cryptocurrencies are not considered as a legal payment instrument in many countries, in reality, Bitcoin transactions can still be carried out by both parties who share Bitcoin, or use intermediaries in online exchanges. This mechanism indicates the use of Bitcoin as a commodity and investment tool.

The implications of Bitcoin and other cryptos as Taxable Goods which are intangible goods. services provided by exchanger service providers cannot be classified as financial services, so if the company has passed a certain turnover limit then it must be confirmed as a Taxable Entrepreneur. In effect, every Bitcoin sale made by this exchanger is subject to VAT.

The capital gains obtained as a trader or Bitcoin contractor who treats it like a stock are taxable income. From the point of view of intermediary companies, income derived from the spread of the buying and selling exchange rates and services provided to members such as sending, storing and withdrawing deposits represent income from business activities subject to income tax.

Bitcoin ownership as an asset, whether from mining results or from purchases, is not necessarily accompanied by an understanding of the principle of taxation of income in a broad sense. Massive education needs to be done to Bitcoin users and cooperation with an exchange brokerage company to provide information about the definition of income subject to tax so that it can meet its tax obligations in accordance with the principles of self-assessment.

The very idea of a decentralized currency is something that bothers almost every country in the world, inability to control, means the possibility of non-payment of taxes. And we know that taxes are something that actually allows states to function, although many will agree that governments are taking too much from us, and in return, they give us a lot less.

Accordingly, some countries in the world want their share of the cake from crypto, and they can do that if they force crypto-exchanges to mandatory KYC for every user. After that, only the technical part remains, whether these companies will self-report users, will the tax services ask for this information, or will users make the tax reports themselves.

There is no doubt that regulations are increasingly tightening with time, and EU’s 5th Anti-Money Laundering Directive will further tighten the rules on cryptocurrency in EU.

I think that avoiding tax is something that will become increasingly difficult, but for people to pay for them, procedures must be simplified and crypto taxes must be in the same or similar percentages as for fiat.

... to be honest, that's the thing I've been trying to deny so far. I really hate to admit it, when faced with the choice between being prohibited and paying taxes, maybe I would choose to pay taxes, and in the end, I had to surrender and follow the rules made by them (the government). 

We can't deny that sooner or later government will really interfere in crypto as many see it's importance as Investment and payment option. We should be ready and not expect too much that when we're crypto we're free not to pay tax. The only way crypto will not be ban or fully have adoption without worry of objecting the law is too put taxes like Japan since the government needs to find ways to earn in any means.

Well ... and I fully agree with you.

Basically, KYC is a rule made by them called third parties (government and banks). As someone who believes that cryptocurrency must be a symbol of freedom, I think, KYC is very inappropriate in the crypto space. Likewise with Taxes, once again, as some people here say, KYC and taxes in crypto are "very contrary" to the basic principles of cryprtocurrency.

I have to disagree.

KYC might not be entirely bad but it is entirely bad, if you know what I mean. We are here in the internet, in a cryptocurrency world where everyone came from different countries that have different identities, personalities, and so many more, that fact solidifies that KYC is not a good thing when it comes to privacy itself, it is like exchanges or anything that requires it are not that trustworthy for me, because look, they could do things they could even though without any KYC, yet they requires it.

And about the taxation in cryptocurrency, I am against it, because Governments should stay away and respect that cryptocurrency doesn't need one.

It's funny how governments want to fight tax evasion by declaring strings of letters illegal. What if people decide to start sending only numbers and letters to one another without wallets or similar platforms while having copies of very simple and lightweight ledger of their transactions?

Well, I think tax is very important if you use government stuff. Otherwise you don't need to pay anything. The best way to avoid governments stuff is to use nature or go natural. The only tax we pay the CREATOR or OWNER of our world & nature is good behavior. Good behavior includes taking care of HIS creations.

KYC in itself isn't entirely a bad idea. It does prevent some fraud and adds another layer of security but still depends if the exchange is trustworthy enough. KYC could help retrieve coins sent to wrong address, on exchanges that implements KYC too could use these details to fix some issues. However, even though tax isn't also a bad thing (since it is necessary to have law enforcement and peace and order), I do also disagree on government's hot eyes on cryptocurrencies, especially now that they had seen its potential, it just looks like they just want to profit from these grounds.

Unlike any market condition governments always want to profit out of it. When it comes to cryptocurrency, governments suffer a lot to profit out of the same. Even after hard try governments were not able to make things happen perfectly. This is all because of the decentralization of the entire network and people also stay pseudonyms.

Some countries have taxed the same adding cryptocurrency along with gold, but they weren't able to make it work perfect. When governments fail in taxing each and every transaction they try to ban the usage or restrict people from using cryptocurrencies.

Ever since Bitcoin and other cryptocurrencies became a hit within the mainstream world, governments have been quite skeptical about them. Despite the promise of crypto to bring trustless payments to the world in a frictionless manner, governments have taken every effort to try to prevent its growth worldwide. As of now, centralized exchanges dominate the space where they're subject to KYC/AML laws. There's literally no way to prevent government surveillance except for P2P trading (like Local Bitcoins, etc).

Considering that centralized exchanges serve as gateways from crypto to Fiat (or vice-versa), they've been the targets of governments worldwide. The main concern of governments is tax evasion and money laundering. Sometimes I wonder why governments want to tax our cryptocurrency funds if they're not considered as money by most people worldwide? After all, crypto's nature is a highly unpredictable and volatile one. It seems to me that governments want to profit from this venture more than anything else. Any other cryptocurrency which prevents them from "taxing" people, would be considered illegal to them in the future (like Monero, and other privacy coins).

Which is why, I believe that crypto taxation is more of a problem than anything else. Do you agree with me? What are your thoughts?