Topic: Should i pay tax if i receive bitcoins ? - page 2. (Read 1167 times)
I believe when you mine Bitcoins you pay income tax only when you exchange to money. Imagine you woud pay tax from mined Bitcoins only to find later you lost your wallet
The trick is how do you live off of bitcoins without it being a declarable income?
If we start with the assumption that you have bought bitcoins at a low price and when they hit a higher rate you wish to exchange them for goods or services - you have made a profit on you original investment and will be liable for taxation.
If you mined the coins then ( at least in Denmark ) you could theoretically register a business and deduct the cost of mining - equipment, electricity, internet connection, rent for the location of your miners and the hourly wage you pay yourself for upkeep of your activities - when calculating your tax.
The tax your are then liable for is your income ( hourly wage ) and any profit after deductions.
But then comes the grey area. The tax department in denmark do not understand ( legally ) how mining is done and how coins are generated. So the official line is that bitcoin income / profit is taxed as if it were a stock / share / commodity.
So don't sell your bitcoins and you don't pay tax...
If we start with the assumption that you have bought bitcoins at a low price and when they hit a higher rate you wish to exchange them for goods or services - you have made a profit on you original investment and will be liable for taxation.
If you mined the coins then ( at least in Denmark ) you could theoretically register a business and deduct the cost of mining - equipment, electricity, internet connection, rent for the location of your miners and the hourly wage you pay yourself for upkeep of your activities - when calculating your tax.
The tax your are then liable for is your income ( hourly wage ) and any profit after deductions.
But then comes the grey area. The tax department in denmark do not understand ( legally ) how mining is done and how coins are generated. So the official line is that bitcoin income / profit is taxed as if it were a stock / share / commodity.
So don't sell your bitcoins and you don't pay tax...
I have no idea how to pay tax in bitcoins in my country )) Or maybe i must do it according to current rate BTC\USD ?
If you figure it out, don't tell your legislators, or they'll "fix" it.
No nation accepts taxes in any form other than the official currency that they print.
To state it simple: not if you receive bitcoins, but you have to pay income tax when you convert your bitcoins to cash (above a certain amount, differs per country)
If you bought the Bitcoins yourselves then no. But if you earned the Bitcoins for providing services then definitively.
I have no idea how to pay tax in bitcoins in my country )) Or maybe i must do it according to current rate BTC\USD ?
If you bought the Bitcoins yourselves then no. But if you earned the Bitcoins for providing services then definitively.
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Taxation is rarely calculated according to what product / service you are selling but rather to the income you receive.
So if my "income" will be bitcoins only, and no any fiat money - there is no taxes - am i right?
No, you are wrong. Receiving bitcoins should be treated as any other receipt of goods. Record the current value of the bitcoins you received as part of your income. If you later sell those bitcoins for more money than they were worth today then the difference is recorded as investment income. If you sell the bitcoins for less than you recorded their worth today, then the difference is counted as investment loss. Careful recordkeeping is important.
Whether you need to pay tax depends on the laws where you are.
If you're in a jurisdiction that treats bitcoin as money, and you would owe taxes if you received money, then yes.
If you're in a jurisdiction that treats bitcoin as a commodity, and you would owe taxes if you sold a commodity at a higher price than you bought it for, and later you sell it for more money than its current value, then yes -- later.
If you're in a jurisdiction that treats *ANYTHING* of value as 'income' and taxes income, then yes. And maybe even 'yes' again later when you sell it, if you sell it for more than its current value.
If you're in a jurisdiction that doesn't really know what the hell bitcoin is yet, then maybe. And 'maybe' is really the worst possible answer. It means somebody can decide well after you do whatever you're going to do, that you were wrong and should have done something else and now owe a fine.
If you're in a jurisdiction that treats bitcoin as money, and you would owe taxes if you received money, then yes.
If you're in a jurisdiction that treats bitcoin as a commodity, and you would owe taxes if you sold a commodity at a higher price than you bought it for, and later you sell it for more money than its current value, then yes -- later.
If you're in a jurisdiction that treats *ANYTHING* of value as 'income' and taxes income, then yes. And maybe even 'yes' again later when you sell it, if you sell it for more than its current value.
If you're in a jurisdiction that doesn't really know what the hell bitcoin is yet, then maybe. And 'maybe' is really the worst possible answer. It means somebody can decide well after you do whatever you're going to do, that you were wrong and should have done something else and now owe a fine.
Taxation is rarely calculated according to what product / service you are selling but rather to the income you receive.
So if my "income" will be bitcoins only, and no any fiat money - there is no taxes - am i right?
And it also depends which country you live in...some countries are having some regulations, some not. Ask in your country's tax office.
The question is in subject, also want to clarify that it will be info product - not real goods or something near it.
Only if higher amount, it is the same as you would receive gold instead
Taxation is rarely calculated according to what product / service you are selling but rather to the income you receive.
The question is in subject, also want to clarify that it will be info product - not real goods or something near it.
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