Legislation will prevent Bitcoin from being used as an everyday currency?

NotATether

legendary

Activity: 1568

Merit: 6660

bitcoincleanup.com / bitmixlist.org

Quote from: Poker Player on September 28, 2021, 10:26:14 PM

Another thing is countries like El Salvador, which recognize it as a currency, and I imagine that citizens do not have to account to the IRS for every transaction they make.

And why would foreign country residents have to report their earnings to the IRS (a USA institution) in the first place? Those procedures don't apply to them at all. But this argument is just a minor formality as the apropriate tax institution for X country could be substituted instead.

Ultimately, the only way a country can go about preventing the use of cryptocurrencies as payment methods is if the respective government explicitly goes out of their way to see to that e.g. Turkey. It is not going to happen just by some increased oversight laws.

Don Pedro Dinero

legendary

Activity: 1358

Merit: 1565

The first decentralized crypto betting platform

Quote from: Wakate on May 04, 2022, 06:35:56 PM

I don't really know much about how countries that accepted Bitcoin as currency runs taxations but I think it is not gonna be easy as we think. Since bitcoin is volatile and the price can fall and raise any time, running taxation can be somehow complex to me.

Well, someone correct me if I'm wrong, but if a currency, bitcoin or otherwise, is considered legal tender there is no taxation on capital gains, no matter how much it has appreciated against the USD or other currencies as long as you haven't exchanged them.

I am not an expert but I would say this is the case.

Wakate

hero member

Activity: 1176

Merit: 543

fillippone - Winner contest Pizza 2022

Paying tax from Bitcoin is not the best for me, maybe the government can make up a simple task system so citizens will not have to be paying tax everytime they makes transactions. This is a big problem that is before us and need to be looked into.
I don't really know much about how countries that accepted Bitcoin as currency runs taxations but I think it is not gonna be easy as we think. Since bitcoin is volatile and the price can fall and raise any time, running taxation can be somehow complex to me.

fara_buduk

full member

Activity: 616

Merit: 100

gik nyareh proyek seteppak pas sepak

Quote from: With Gusto on February 01, 2022, 09:04:52 PM

Quote from: Poker Player on September 28, 2021, 10:26:14 PM

... I can't imagine people filing their tax returns with thousands and thousands of payments. Unless an app is created that does it automatically, but that would mean giving the data of all your transactions to a third-party....

What do you think about it?

The app is a great idea and does not have to give data to a third party. It could be, for example, open source software with a free/community version that handles 2 or 3 thousand transactions per year, and a premium/commercial version with unlimited transactions, plus a few more features, etc. There is a huge need for this! Thank you, for the exciting business idea. Does anyone know if this already exists - in any country - especially for the USA?

when it is legal, the tax will be applied, it's just that the application of taxes for transactions of goods and services is very difficult to apply except using an application that is as mentioned but behind that there is a weakness and how it works considering the way that is put forward is opposite to the cryptocurrency system .

With Gusto

newbie

Activity: 16

Merit: 0

Quote from: Poker Player on September 28, 2021, 10:26:14 PM

... I can't imagine people filing their tax returns with thousands and thousands of payments. Unless an app is created that does it automatically, but that would mean giving the data of all your transactions to a third-party....

What do you think about it?

The app is a great idea and does not have to give data to a third party. It could be, for example, open source software with a free/community version that handles 2 or 3 thousand transactions per year, and a premium/commercial version with unlimited transactions, plus a few more features, etc. There is a huge need for this! Thank you, for the exciting business idea. Does anyone know if this already exists - in any country - especially for the USA?

Ozero

full member

Activity: 2142

Merit: 183

Quote from: Findingnemo on October 01, 2021, 11:43:15 AM

As of now, yes its almost impossible to use it as a payment because we are going to pay more taxes for the same thing we do with cryptos but in future the things may change when the society force them to make such changes in the government monetary policies. Even now its hard for someone to spend cryptocurrency and also when it comes to tax reporting.

This is indeed a big problem for cryptocurrency users. I think that the problem should be solved in other ways than filing cryptocurrency holders with the tax authorities in all cases when they made transactions using it. Indeed, for many, these will be very large lists.
Most likely, this will be the deduction of certain sums immediately when calculating with a cryptocurrency, and they will be paid by the other side of such settlements at the expense of the holder of the cryptocurrency.

Poker Player

legendary

Activity: 1372

Merit: 2017

Quote from: dansus021 on November 20, 2021, 06:48:27 AM

hey to be honest the reason why some government dont like crypto is they cant controlled like fiat do, and the second was, there no tax mean no piggy bank for the gov

if bitcoin/crypto taxed maybe gov will think about it

I have not reported your message for low value simply because I doubt if in the country where you live it may not be regulated.

For your information Bitcoin is taxed in most countries in the world where it is not prohibited. Most commonly it is taxed with a capital gains tax, which makes it difficult to use it for small day-to-day payments, as I was explaining in the OP.

dansus021

copper member

Activity: 2156

Merit: 983

Part of AOBT - English Translator to Indonesia

hey to be honest the reason why some government dont like crypto is they cant controlled like fiat do, and the second was, there no tax mean no piggy bank for the gov

if bitcoin/crypto taxed maybe gov will think about it

With Gusto

newbie

Activity: 16

Merit: 0

Legislation will prevent Bitcoin from being used as an everyday currency?

With a tiny bit of effort on your part it is too late to stop BTC as an everyday currency. For example (USA in this case), buy working/usable Grubhub/Doordash codes for a ~20% discount on an established, safe exchange site and you have people bringing you food.

Gozie51

hero member

Activity: 2660

Merit: 630

Vave.com - Crypto Casino

Quote from: Ozero on October 28, 2021, 11:06:03 AM

In my country, a bill was passed in the first reading according to which cryptocurrency will be used as a means of payment. True, indeed, while I cannot say how taxes will be paid. The bill states that the amount of taxation is determined as the difference between the amount of the sold cryptocurrency and the cost of purchasing it, and it is assumed that the tax amount will be five percent.
But what will need to be done in the case of buying goods or services directly for cryptocurrency, I do not even know. Perhaps it will depend on the value of the product or service.

By your first line of sentence, if a bill was passed for the use of cryptocreency as means of payment, it means is now legal to us crypto to make purchase so what is the problem about using crypto for payment of goods and services directly ?
By a bill being passed by parliament, this means the process of deliberation and agreement has made it into law in your country and what country are you from meanwhile ?

zeuner

member

Activity: 189

Merit: 16

Quote from: Poker Player on September 28, 2021, 10:26:14 PM

I know that the legislation is very varied around the world, but as far as I know in most countries, it is regulated as a financial asset and not as a currency, therefore, every time you spend you create a taxable event.

Legislation might explicitly exclude assets held for daily use from taxation as in some countries. Still, the tax authority might have a different opinion than the Bitcoin user.

Quote from: Poker Player on September 28, 2021, 10:26:14 PM

I believe that in countries where bitcoin is regulated as a financial asset, it will be difficult to use it for day-to-day payments, even with LN. I can't imagine people filing their tax returns with thousands and thousands of payments. Unless an app is created that does it automatically, but that would mean giving the data of all your transactions to a third-party.

Yes, as long as there is the possibility of creating taxable events, it might be useful to have a way to export transaction data from the wallet software in order to avoid the taxable gains being estimated.

Poker Player

legendary

Activity: 1372

Merit: 2017

Quote from: hello_good_sir on October 15, 2021, 05:13:01 AM

I think that this is a situation that is special to the U.S..

In my country, you are exempt on paying any capital gains tax on crypto transactions up to a certain amount.

I think it's the other way around. Without having made an exhaustive study, in most countries what has been imposed is a capital gains tax. What is an exception is what happens in your country.

Quote from: Ozero on October 28, 2021, 11:06:03 AM

In my country, a bill was passed in the first reading according to which cryptocurrency will be used as a means of payment. True, indeed, while I cannot say how taxes will be paid. The bill states that the amount of taxation is determined as the difference between the amount of the sold cryptocurrency and the cost of purchasing it, and it is assumed that the tax amount will be five percent.
But what will need to be done in the case of buying goods or services directly for cryptocurrency, I do not even know. Perhaps it will depend on the value of the product or service.

I don't quite understand. If Bitcoin is used in your country as a means of payment, you shouldn't have to pay taxes for buying a coffee with it. I imagine that if you exchange Bitcoin for local currency will be when you apply the 5%, and we will have to see what happens when you buy a coffee. Ideally in the latter case there would be a minimum exemption, for example $100 or equivalent, below which you would not have to pay anything to buy directly.

Ozero

full member

Activity: 2142

Merit: 183

In my country, a bill was passed in the first reading according to which cryptocurrency will be used as a means of payment. True, indeed, while I cannot say how taxes will be paid. The bill states that the amount of taxation is determined as the difference between the amount of the sold cryptocurrency and the cost of purchasing it, and it is assumed that the tax amount will be five percent.
But what will need to be done in the case of buying goods or services directly for cryptocurrency, I do not even know. Perhaps it will depend on the value of the product or service.

hello_good_sir

hero member

Activity: 1008

Merit: 531

Quote from: Poker Player on September 28, 2021, 10:26:14 PM

I know that the legislation is very varied around the world, but as far as I know in most countries, it is regulated as a financial asset and not as a currency, therefore, every time you spend you create a taxable event.

Someone who buys $1k today and goes out a couple of hours later to buy a coffee for $3 when the price of bitcoin has gone up 3% owes taxes on the profit of the proportional part of that $3. If tomorrow he buys something else but the price has gone down below when he bought bitcoin, he can deduct losses on that proportional part.

I believe that in countries where bitcoin is regulated as a financial asset, it will be difficult to use it for day-to-day payments, even with LN. I can't imagine people filing their tax returns with thousands and thousands of payments. Unless an app is created that does it automatically, but that would mean giving the data of all your transactions to a third-party.

Another thing is countries like El Salvador, which recognize it as a currency, and I imagine that citizens do not have to account to the IRS for every transaction they make.

What do you think about it?

I think that this is a situation that is special to the U.S..

In my country, you are exempt on paying any capital gains tax on crypto transactions up to a certain amount. If that's not the case then it'll be a major hassle for anyone who is actually looking to spend their coins for sure.

Tax codes around the world are quite archaic still, and unfortunately only time will tell if governments will choose to reform them.

buwaytress

legendary

Activity: 2968

Merit: 3684

Join the world-leading crypto sportsbook NOW!

Quote from: Poker Player on October 08, 2021, 10:42:01 PM

Quote from: yhiaali3 on October 08, 2021, 07:51:33 PM

Perhaps this legislation is intended by the government because they do not want to adopt bitcoin and therefore want to make people annoyed with paying taxes on every small transaction they make, also if tracking software is imposed for small bitcoin transactions there will be a huge breach of privacy and of course this is something governments are very happy.

I don't think that's the reason. Of course governments would prefer that no one used Bitcoin, but it's one thing that I think they've realized they can't stop. They have to accept that Bitcoin is here and it's here to stay. Now what they are doing is using their legislative power to regulate it in the way they think is in their best interests.

For governments to prefer that, that would require them to actually understand Bitcoin. And with the understanding, acceptance that there's no way they can start a fight against it and not lose.

Legislation appears to be the compromise, but at least in the case of China, and Southeast Asia, if I can speak for that part of the world, it's also the stop-gap solution to try and stop people from losing money to things they don't understand until proper awareness fits into place. I'm saying this from a perspective of practicality, knowing that back home, consumer and banking complaints department are under a deluge of public complaints and reports from "Bitcoin" scams. Most aren't even remotely connected to Bitcoin of course.

stomachgrowls

hero member

Activity: 3010

Merit: 794

Quote from: yhiaali3 on October 08, 2021, 07:51:33 PM

Perhaps this legislation is intended by the government because they do not want to adopt bitcoin and therefore want to make people annoyed with paying taxes on every small transaction they make, also if tracking software is imposed for small bitcoin transactions there will be a huge breach of privacy and of course this is something governments are very happy.

It cant be possible if we do talk literally but they could really trace out possible tax evaders specially to those who had been using up centralized platforms.There's no such thing about
tracking software or something like that because if it do exist in the first place then it is really a serious issue with Bitcoin itself.

How good to see if Bitcoin would be used as everyday currency but we know that there are certain things which could really be a reason on why we cant do such thing
and thats volatility and of course with regulation issues.

Lets just deal on what we are currently treating it for now.Adoption is on the move but dont anticipate much.

Poker Player

legendary

Activity: 1372

Merit: 2017

Quote from: yhiaali3 on October 08, 2021, 07:51:33 PM

Perhaps this legislation is intended by the government because they do not want to adopt bitcoin and therefore want to make people annoyed with paying taxes on every small transaction they make, also if tracking software is imposed for small bitcoin transactions there will be a huge breach of privacy and of course this is something governments are very happy.

I don't think that's the reason. Of course governments would prefer that no one used Bitcoin, but it's one thing that I think they've realized they can't stop. They have to accept that Bitcoin is here and it's here to stay. Now what they are doing is using their legislative power to regulate it in the way they think is in their best interests.

yhiaali3

legendary

Activity: 1848

Merit: 1982

Fully Regulated Crypto Casino

Perhaps this legislation is intended by the government because they do not want to adopt bitcoin and therefore want to make people annoyed with paying taxes on every small transaction they make, also if tracking software is imposed for small bitcoin transactions there will be a huge breach of privacy and of course this is something governments are very happy.

dothebeats

legendary

Activity: 3542

Merit: 1352

Cashback 15%

Taxation would be grim, though it will not be impossible to impose it as they can surely find a way to implement it. One way is as you described it, though the government can eliminate the third-party aspect and just handle everything on their own. That would mean they would need to create another department in order to keep things tight and smooth, and the creation of another distinct department for tax purposes would be pretty expensive. It'll be hard but they'll surely find a way to make things work.

Gozie51

hero member

Activity: 2660

Merit: 630

Vave.com - Crypto Casino

Making bitcoin a financial asset is a limitation already. I think bitcoin was made to be both financial asset and payment platform but the government don't ascribe to the payment system that is the issue because of control over spending.

Quote

Unless an app is created that does it automatically, but that would mean giving the data of all your transactions to a third-party.

This is the aspect that of course is pure regulation. Creation of app means third party involvement and will require KYC but bitcoin being decentralised, it may be avoided, by passed making such system optional.

Findingnemo

hero member

Activity: 2366

Merit: 793

Bitcoin = Financial freedom

As of now, yes its almost impossible to use it as a payment because we are going to pay more taxes for the same thing we do with cryptos but in future the things may change when the society force them to make such changes in the government monetary policies. Even now its hard for someone to spend cryptocurrency and also when it comes to tax reporting.

hugeblack

legendary

Activity: 2688

Merit: 3983

This does not necessarily have to be done, as it is classified as an asset, but it is a temporary measure to collect taxes and impose legislation, but it is also difficult for governments to include digital currencies as securities.

The solution can be in the preparation of independent legislation about cryptocurrencies, which is something that will only happen when many people invest in cryptocurrencies, then you will get independent laws and this may happen within 10 years.

Until then, most countries don't invest much in tracking tools, so as long as you care about privacy, you don't need to pay taxes (I don't encourage you not to pay taxes or try to do that)

malevolent

legendary

Activity: 3472

Merit: 1722

Quote from: Poker Player on September 29, 2021, 03:03:35 AM

Quote from: dansus021 on September 29, 2021, 02:49:57 AM

but i think there software that can tracking your portofolio, balances and make tax information for you so loss profit and other will be calculated by sytem and we only print and give it to gov

Yes, I suppose a lot of people will be fine using such software, just as they buy Bitcoin on centralized exchanges and leave it there, or buy through Paypal or similar services. But I think that privacy-conscious forum users would not be happy to have everything they buy tracked by a third party and the government. At least I think it departs from the original idea of Bitcoin being a P2P electronic cash system.

If someone's using a card connected to a CEX they'd be more inclined to report and pay tax on every transaction, no matter how small, a privacy conscious person who sells BTC for fiat via other means probably won't bother unless they're making a bigger purchase where it's harder to avoid paying, i.e. when buying real estate.

Kyraishi

hero member

Activity: 952

Merit: 513

Quote from: Poker Player on September 28, 2021, 10:26:14 PM

I know that the legislation is very varied around the world, but as far as I know in most countries, it is regulated as a financial asset and not as a currency, therefore, every time you spend you create a taxable event.

Someone who buys $1k today and goes out a couple of hours later to buy a coffee for $3 when the price of bitcoin has gone up 3% owes taxes on the profit of the proportional part of that $3. If tomorrow he buys something else but the price has gone down below when he bought bitcoin, he can deduct losses on that proportional part.

I believe that in countries where bitcoin is regulated as a financial asset, it will be difficult to use it for day-to-day payments, even with LN. I can't imagine people filing their tax returns with thousands and thousands of payments. Unless an app is created that does it automatically, but that would mean giving the data of all your transactions to a third-party.

Another thing is countries like El Salvador, which recognize it as a currency, and I imagine that citizens do not have to account to the IRS for every transaction they make.

What do you think about it?

It is difficult but not impossible.

Of course, restrictive/draconian regulations will always be unwelcoming to crypto users and holders but at the end of the day they can only do so much to shut the network down.

Especially when it comes to BTC as a store of value. Regulators could possibly legislate to restrict fiat-crypto exchanges/transactions, but there is no way that they can restrict the holding of decentralized assets or just cross-crypto exchanges.

avikz

legendary

Activity: 3080

Merit: 1500

The situation you have described, is true! In countries where bitcoin js classified as a financial asset, it creates a problem for using bitcoin as a currency for regular purchases. But that's what most of the governments want! Since they have understood that they can't control bitcoin, they are trying curb its usage in a different way! Declaring bitcoin as a financial asset is one of such ways.

But we can't really expect a lot of friendlyness from the government itself. Because most governments truly sees bitcoin as a challenge rather than an opportunity. We can't expect another country to follow the same path as El-Salvador.

Poker Player

legendary

Activity: 1372

Merit: 2017

Quote from: dansus021 on September 29, 2021, 02:49:57 AM

but i think there software that can tracking your portofolio, balances and make tax information for you so loss profit and other will be calculated by sytem and we only print and give it to gov

Yes, I suppose a lot of people will be fine using such software, just as they buy Bitcoin on centralized exchanges and leave it there, or buy through Paypal or similar services. But I think that privacy-conscious forum users would not be happy to have everything they buy tracked by a third party and the government. At least I think it departs from the original idea of Bitcoin being a P2P electronic cash system.

dansus021

copper member

Activity: 2156

Merit: 983

Part of AOBT - English Translator to Indonesia

yes it is tax maybe becoming one problem tho

but i think there software that can tracking your portofolio, balances and make tax information for you so loss profit and other will be calculated by sytem and we only print and give it to gov

Poker Player

legendary

Activity: 1372

Merit: 2017

I know that the legislation is very varied around the world, but as far as I know in most countries, it is regulated as a financial asset and not as a currency, therefore, every time you spend you create a taxable event.

Someone who buys $1k today and goes out a couple of hours later to buy a coffee for $3 when the price of bitcoin has gone up 3% owes taxes on the profit of the proportional part of that $3. If tomorrow he buys something else but the price has gone down below when he bought bitcoin, he can deduct losses on that proportional part.

I believe that in countries where bitcoin is regulated as a financial asset, it will be difficult to use it for day-to-day payments, even with LN. I can't imagine people filing their tax returns with thousands and thousands of payments. Unless an app is created that does it automatically, but that would mean giving the data of all your transactions to a third-party.

Another thing is countries like El Salvador, which recognize it as a currency, and I imagine that citizens do not have to account to the IRS for every transaction they make.

What do you think about it?

Topic: Legislation will prevent Bitcoin from being used as an everyday currency? (Read 538 times)