Topic: Declaring profits in the European Union (Read 333 times)

But is it secure not to declare anything as some people tend to do?

I don't declare profits. When I need to cash out, which is rare, I do it in Germany, which doesn't require me to pay any taxes.
When I reside in different countries, that do want BTC taxes, I tend not to use banks. I buy stuff for BTC directly or sell on foreign exchanges and keep the fiat currency on the exchange. So, I'm avoiding taxes as much as the law allows for it.

It would be much better. if you first introduced us to the course of what tax legislation now exists in the countries of the European Union and whether there are common rules for taxation in these countries. I read that according to the decision of the European Court of Justice, Germany does not consider the crypto currency as an object of taxation when making various transactions with the crypto currency.

The EU is not a tax union. Depends on which country you are in. We operate in a EU country in which you only declare profits and losses AFTER selling.

I'm clever so i don't cash out so i don't declare anything and wait to see what happens

of course, as long as you show that the Bitcoins you are exchanging for fiat were acquired in a licit way.

I'm wondering how it works if you got huge profits from crypto, like 1mln USD. Can you still pay the tax and be clear?

This is not true for every country. Not in every country profits from cryptocurrencies are taxed
as capital gains.

E.g. in Germany selling BTC is a "Privates Veräußerungsgeschäft" (selling of private goods) and is
taxed with your personal income rate instead of the rate for capital gains taxes.

Regarding the original question of the OP, I suggest talking to a tax advisor, who is familiar
with the situation in Slovakia. I don´t expect that anyone in this board is familiar enough
with Slovakian tax legislation.

Nearly anyone in the EU fills a tax form once a year, and it's the same document for BTC profits, which are materialized when exchanged with local fiat currency.
You just need to ask where in that form you shall add "exceptional income" or "capital gains".
An example, now.

If you bought BTC for €1,000 in 2013, you may have €50,000 now, so you will declare €49,000. If the tax rate is %30, you will have to pay €14,700. It might be less than that if you've kept your investment for more than a year, but you must look for info in your country. I believe very few people here are familiar with the Slovakian tax system.

You're supposed to report once a year the same way you report your annual income but:
For European citizens, it varies from country to country. For example, you pay zero tax in Belgium, in Germany zero tax if you were holding your coins since at least 1 year, France is planning to racket up to 60%


The problem for most European countries is that they are not sure what status to give to Bitcoin and so how to tax it (or not). They are still lost and not sure. For example, in my country, they don't want to consider Bitcoin as a currency and a payment method (surely because if they do they won't be able to steal our profits: see how vicious is it?) And when you give a call, they don't even know what is a cryptocurrency

It becomes a real problem in Europe because most countries are not clear about this, and the ones with no tax may change their mind at any time (like it happens right now for others)

And you know, since it's Europe they like to see all countries with the same laws, quotas, and so on...

Let's break this down a bit as the questions are just all over the place.

- Being a EU citizen means nothing when it comes down to taxes.
If you live in the UK (they are still in the EU) you will have to report it , if you live in Poland you will also have to do it, but looking at the latest news if you're in Romania they are too stupid to come up with a tax plan so...you're free to play around with all the money.

-Nobody is paying taxes every time it makes a profit.
You pay taxes for all the times you made a profit but this only at the end of the year (for private gains) , 4 times a year in most countries as a private entrepreneur or in worst cases monthly. But again it depends on legislation in every country.
Since you're from Slovakia (hello neighbor!!!) sadly, I don't have a clue  

-nobody is knowing at your door and probably won't
All transactions over 5000-15 000 euros are forwarded (at least in eastern Europe, Poland, Latvia,Czech Republic and Hungary....this I know for sure) to the financial authorities , this is a must.
But the bank also flag down smaller transactions and this is done by their own regulations.

Now , the worst case ...
In your country you must pay taxes, you don't ....there is going to be a lot of paperwork, citations, frozen accounts and everything but it will take a while and only in the extreme cases when they will have to put your apartment for sale for unpaid taxes you're going to hear knocks at the door.

LE:
Just checked, for private gains you fill the taxes once a year in all the countries in EU.

Slovakia.

The EU isn't one country with one tax system, it's all different countries with different taxes.

No, I don't
It would help for your question if you say which country you live in.

Found this: http://www.thisismoney.co.uk/money/experts/article-5019947/Do-pay-tax-sell-bitcoin-big-profit.html

In no moment my question was about VAT. My question is related only to the profit you can make from converting Bitcoin to Euro, after you bought it for a cheaper price. Easy example: you buy 1 BTC for 1K EUR, you sell it six months later for 10K EUR. You made a profit of 9K EUR. I suppose you need to pay a tax for that 9K EUR profit.

In EU, the relating tax treatment of bitcoin for tax purposes differ depend on each EU country. However, purchasing and selling bitcoin does not incur VAT but bitcoin transactions may be subject to other taxes, such as income tax.

I'm resident, but this is new experience for me too. I see here great misunderstanding close to the nature of the taxes. It is time to remaind about the reasons of every taxes we must pay. We need to get  more strongly definitions of the most important conceptions: "profit", "taxable trade", "VAT",  and so on... At a moment I do not know any string in the EU income declarations with strictly specific rule about mining cryptocurrency as a profitable, taxable business. There are a lot of the game online with similar actions... this is problem to sort it and create logical concept for the cryptocurrencies make taxable.
Thank you.

Thank you! I think in Germany is taxable if you convert to fiat BEFORE one year. After one year is not taxable.

Where I live apparently I don't need to declare anything if profits are not greater than 500 EUR. Any other profit needs to be declared. So OK, is just tax declaration and they take my word for it, and if they want to digg more they will contact me etc. Got it.

Thanks!

You are supposed to do it when your profit exceeds the non-taxable minimum, also called personal allowance. I'm talking here about countries where it's taxable, because in some countries like Germany and recently Belarus you don't have to pay anything.
You do it once a year and usually the transfer from an exchange to your bank account is the only proof that you'll need (in case they ask) you don't have to attach it to your annual report. You also can keep emails from the exchange with dates that show when you've deposited and withdrew your money.

There are always taxes if you have a profit, no matter if the profit comes from a an exchange of Bitcoin to Euro, gold, a tomato or a bet in Bwin. So that's the reason of my question. If you're a EU citizen or resident and have done this, it would be helpful to share your experience.

Thanks!

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It is funny to see this. We must understand what the taxes for using BTC is?
There are two cases:
1 IF it is the payment to Creator of your money THEN you have nothing to pay. Because the BTC was not created by Mr. Rothsield's bank. You already have paed to creator of your BTC.
2 IF it is the payment like for your owner ... THEN yur government is criminal "roof" because you are the free and not slave. In this case you have nothing to pay them
3 ... third not exists, nothing else, all other taxes you already pay in EUR...

and what do you attach as evidence? deposits, withdraws etc?

For me: 1) when I do my tax filing (once a year) but I guess that depends on the law in your country of residence...

Are you an European Union citizen or resident? If yes, when are you declaring your cryptocurrency profit?

1) Everytime I have a profit
2) If profit greater than e.g. 5,000 EUR
3) I don't declare profits

If 1), when do you this declaration? at the end of one year? every month?
If 3), did the tax office knocked your door to ask about the unusual deposits in your bank account?

Thanks!