In New Zealand I think the authorities will classify bitcoin as a commodity eg like wheat as i can buy a bag of wheat and sell all of part of it, i can hold on to it for a while and sell it at a profit or a loss.
we have no capital gains tax here but the authorities will set a figure above which you will be called a "trader' eg if you do up less than 4 cars per year and sell them off for a profit (which mainly covers your time and some costs) you are not a trader so you just keep the "profits' and you do not need to declare for tax purposes. but buy/sell 5 or more you are a motor vehicle trader and subject to the normal business rules eg tax, vat, keeping records etc.
I do not know what that threshold might be for bitcoin. Since bitcoin is 'positive' for trade ie might increase trade worldwide and we are a heavily trade dependent nation it will be set high enough so that little guys do not need to worry about it eg buying/selling below say less than US$25,000 you might be exempt. people buying and selling goods in business that accept bitcoin as well as paypal, credit cards etc will just carry on the same ie declare income/expenses in the usual way
the front end and back end stuff remains the same eg front end - if you have got your money illegally eg drug trading they will try to find you but they are trying to do that now before bitcoin came along. As other posters have said the baddies will mainly continue to use cash - money laundering etc has been very successful before bitcoin came along so they will find ways to do it and just use bitcoin more or less depending on the extent they might get caught, the country, the jurisdiction and case law in that country.
Topic: So exactly which part is illegal...? (Read 1221 times)
tax people are the same everwhere 
All these capital gains taxes seem way too greedy. It if were up to me everyone would be paying VAT on each transaction but no-nonsense taxes such as a tax to own property or to have capital gains.
Have they suggested what value is added in such a transaction to apply the VAT?
If I give 2 fives for a ten do I have to give another five to the policeman?
All these capital gains taxes seem way too greedy. It if were up to me everyone would be paying VAT on each transaction but no-nonsense taxes such as a tax to own property or to have capital gains.
abetting a crime...
It's judgement time...
I see so much value in us doing honest work internationally...if the young people of different nations understand it's importance and because it could mean a lot more than just peace...
Why not have a coin that is easily traceable...but tracking it is useless...
either you do honest work using the coin or your coins could suddenly loose value
We may be different in many ways but our hearts tick the same
It's judgement time...
I see so much value in us doing honest work internationally...if the young people of different nations understand it's importance and because it could mean a lot more than just peace...
Why not have a coin that is easily traceable...but tracking it is useless...
either you do honest work using the coin or your coins could suddenly loose value
We may be different in many ways but our hearts tick the same
I believe it differs from country to country. In the USA and UK I believe Capital Gains Tax is the main thing to worry about. It seems some countries (ie Russia) are trying to ban use of cryptocurrencies full stop.
In the UK and USA, you're meant to declare if/when profits on a cryptocurrency are realized, so that means either when you sell your BTC for legal tender, or exchange BTC for goods/services.
In the UK there is a £10,900 threshold for CGT, any profits over that are liable for tax.
So, say I bought 100 BTC @ £10 each (total spent £1000) and later sold 100 BTC @ £1000 (total profit 100,000-1000= £99,000). I would declare £88,100 of the profit taxable. This is currently 20% in the UK I think, so I would pay £17,620 in Capital Gains. EDIT: The same amount of tax would be due if I had bought a £100k car for BTC, as this is still realizing profit.
After speaking to HMRC a couple of times, I'm pretty sure this is the current situation in the UK. I heard Germany won't charge CGT to it's citizens, that would be sweet if you're German.
You're meant to declare ALL capital gains each year, even if they fall under the threshold. (But most people don't do this, I know a few people who went on holiday, saved some of the leftover foreign currency, and used it the following year when it's value happened to have doubled. Technically you should declare this gain, but no-one does unless you're talking large amounts [probably tens of thousands GBP])
In the UK and USA, you're meant to declare if/when profits on a cryptocurrency are realized, so that means either when you sell your BTC for legal tender, or exchange BTC for goods/services.
In the UK there is a £10,900 threshold for CGT, any profits over that are liable for tax.
So, say I bought 100 BTC @ £10 each (total spent £1000) and later sold 100 BTC @ £1000 (total profit 100,000-1000= £99,000). I would declare £88,100 of the profit taxable. This is currently 20% in the UK I think, so I would pay £17,620 in Capital Gains. EDIT: The same amount of tax would be due if I had bought a £100k car for BTC, as this is still realizing profit.
After speaking to HMRC a couple of times, I'm pretty sure this is the current situation in the UK. I heard Germany won't charge CGT to it's citizens, that would be sweet if you're German.
You're meant to declare ALL capital gains each year, even if they fall under the threshold. (But most people don't do this, I know a few people who went on holiday, saved some of the leftover foreign currency, and used it the following year when it's value happened to have doubled. Technically you should declare this gain, but no-one does unless you're talking large amounts [probably tens of thousands GBP])
Is profiting from selling BTC the problem...? Most legal authority seems to be having a hard time even classifying Bitcoin, yet they are simultaneously scrutinizing existing law and testing its applicability to the Bitcoin economy. So is it illegal to buy BTC, sell BTC, make fiat off BTC, trade goods for BTC...or will it be...or could it be?
The first question that must be legally defined is...what is Bitcoin in the eyes of the law? Is it money, an investment asset or something else? Are Casascius coins money or are they essentially just fancy wallets? So many questions to be answered, and it looks like case law is going to define much of it...
http://www.coindesk.com/localbitcoins-users-criminal-charges-florida/
The first question that must be legally defined is...what is Bitcoin in the eyes of the law? Is it money, an investment asset or something else? Are Casascius coins money or are they essentially just fancy wallets? So many questions to be answered, and it looks like case law is going to define much of it...
http://www.coindesk.com/localbitcoins-users-criminal-charges-florida/
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