Pages:
Author

Topic: Tax Avoidance Possible legally with Bitcoin? - page 2. (Read 352 times)

legendary
Activity: 2436
Merit: 1561
Say if someone owns 10 Bitcoins which is not declared and government doesn't know about it (earned/mined etc but did not buy)  and now that someone want to avoid paying tax on cashing it out. Can he simply move to countries where there is 0 tax like (UAE) specifically dubai and setup a company there and cash out crypto over years in dubai bank account and later decide to move to his home country with all that money. Since dubai has 0 personal tax and his home country can't charge tax on it because of non-resident of home country. Is this possible?


First of all, tax avoidance is not illegal, tax evasion is.

To even have a slight chance of getting any valuable advice here, you'd have to be more specific and state what's your current tax residency and include more details on how you acquired those 10 bitcoins.

In vast majority of western countries, simply owning 10 bitcoins is not something you would have to declare at all. You would have to declare and pay tax on it when you exchange it for something (e.g. fiat, goods, and sometimes, but not always - other cryptos) and make a profit on that trade.
copper member
Activity: 2856
Merit: 3071
https://bit.ly/387FXHi lightning theory
You also have to live somewhere for long enough to be able to not be liable for the tax. For income, a lot of countries agree you pay tax on where you lived for 6 months of the year (the US and a few others don't).

If you become wealthy quickly and then plan to return, expect an investigation. They're not going to let you get a lot of money without seeing if you've made a mistake they can claim against in most cases (it's a fairly reasonable procedure though considering you were trying to avoid paying it anyway).
legendary
Activity: 1624
Merit: 2594
Top Crypto Casino
Is this possible?

Depending on the tax laws of the country you move to and the country you are leaving, you may or may not have to pay taxes in both countries. Some countries have tax agreements with each other to avoid double taxation, while others tax residents on their worldwide income. For example, if the country you are moving to has a tax agreement with the U.S., you may be exempt from paying taxes on your worldwide income. However, if you are moving to a country that does not have such an agreement with your home country, you may be required to pay taxes in both places. In some cases, this can lead to double taxation and result in higher taxes than what would have been due if you were only taxed once.

When in doubt about whether or not you have to file, consult an accountant or tax professional who is familiar with international taxes.
hero member
Activity: 1400
Merit: 623
Say if someone owns 10 Bitcoins which is not declared and government doesn't know about it (earned/mined etc but did not buy)  and now that someone want to avoid paying tax on cashing it out. Can he simply move to countries where there is 0 tax like (UAE) specifically dubai and setup a company there and cash out crypto over years in dubai bank account and later decide to move to his home country with all that money. Since dubai has 0 personal tax and his home country can't charge tax on it because of non-resident of home country. Is this possible?


It’s very important to determine when do you acquire it. Is it before the tax law implementation or after because you will be in trouble if you acquire after the law is implemented because a simple chainalysis on blockchain record will find out your laundering in the future especially if you became an instant millionaire.

Your plan is good if your Bitcoin doesn’t come for any centralized exchange. Your only problem will be explaining to IRS on how you get your capital for your company that funded by your 10BTC since everything will be documented when came back to the US. I think it’s better to live on 3rd world country and use your money there instead on returning back to US.
member
Activity: 77
Merit: 10
Say if someone owns 10 Bitcoins which is not declared and government doesn't know about it (earned/mined etc but did not buy)  and now that someone want to avoid paying tax on cashing it out. Can he simply move to countries where there is 0 tax like (UAE) specifically dubai and setup a company there and cash out crypto over years in dubai bank account and later decide to move to his home country with all that money. Since dubai has 0 personal tax and his home country can't charge tax on it because of non-resident of home country. Is this possible?
Pages:
Jump to: