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Is capital gains tax payable on those coins? If I were in your place, I would probably attempt to find a way to realise that gain (i.e. by relocating to a tax f

Is capital gains tax payable on those coins? If I were in your place, I would probably attempt to find a way to realise that gain (i.e. by relocating to a tax friendly country for a while) without having to pay capital gains tax. Make sure to not throw away your windfall.

zen_boy 10y ago
In Finland, the capital gains on cryptos are realised once you sell them for floating currencies (ie. USD or EUR). We pay 34% tax on the profit. For example, I'd pay (1M€ - 20k€) x 34% = 333k€ of taxes on capital gains. I'm not sure how the taxation works if you try to dodge it by relocating to a more tax friendly zone. I've heard some horror stories about Finnish companies moving to Estonia for tax benefits only to be taxed with fines for the gains that the company made while it located in Finland. Would the same rationale apply for personal capital gains? You can freely trade between cryptos, for example between BTC and ETH, without triggering the capital gains. The moment you leave cryptoland, I believe they use the first-in-first-out (FIFO) principle to calculate the profits.
- charlesdm 10y ago
  In Belgium (where I live), these gains are tax free. So that is one country you could potentially move to to avoid the tax. The same applies for the UK, Malta, Cyprus (non dom regime) and Monaco. If I were you, I'd consider doing the perpetual traveler thing for a while (i.e. while having a base in Malta, which is cheap) and cash out + reinvest in stocks. After a few years, move back, and then pay capital gains tax on those future gains. You can leave most countries without realising the capital gain, even if you've built it up within a country. This is why certain people move to a country without capital gains tax to sell their company. Obviously I don't know Finnish tax law, but within the EU it's generally the case (for now). Have it checked by a _GOOD_ tax lawyer, if that's what you want to do. Building up capital is important - once you have it there's a lot you can do.
  - zen_boy 10y ago
    Wow, this advice is very valuable. I'll definitely investigate. Thank you. Another interesting discussion is the ethical side of things. I do feel some obligation to pay back to my home country for things it has provided (free education, healthcare, etc.), many of which were financed with tax income. But paying the whole amount from current and future gains would be tad too much. Also, would it be possible to achieve higher and more direct impact with dodging the taxes and distributing that money via philantrophic means? Just some questions I'm thinking about in the whole picture.
    - charlesdm 10y ago
      1. If you intend to move back at some point, it doesn’t matter. Say you generate €75-100k a year from that million in the future, you’ll be paying 25k a year in taxes anyway. The more capital you have, the more you can generate, hence the more tax you can pay in the future. Pay 333k now vs 25k a year over the next 50 years. But building that first €500k-1m is hard, imo. 2. Always give back. For example, I gift €X,000 every year to local good causes. Yep, I get a 45% tax deduction for it, but I also use it as a way to give back. You’re not going to spend one euro to save 45 cents in tax, if it's not something you believe in. You can also give back by investing in Finnish companies. 3. If you’re interested in Belgium (low cost of living, high quality of life, free health insurance, relaxed society, high taxes but not on capital), I can intro you to my tax lawyer. He’s awesome.
      - zen_boy 10y ago
        Great points. Ultimately, it seems to boil down to deferring tax to the future instead of the present resulting in higher gains for everybody, and having the freedom to choose on how to give back. Both of which seem like the obvious after further consideration. I'm really curious about your story. Would you be interested in continuing this discussion over email?
        charlesdm 10y ago
        Sure! E-mail address is on my HN profile.
- deleted 10y ago
  [deleted]

zen_boy 10y ago

In Finland, the capital gains on cryptos are realised once you sell them for floating currencies (ie. USD or EUR). We pay 34% tax on the profit. For example, I'd pay (1M€ - 20k€) x 34% = 333k€ of taxes on capital gains. I'm not sure how the taxation works if you try to dodge it by relocating to a more tax friendly zone. I've heard some horror stories about Finnish companies moving to Estonia for tax benefits only to be taxed with fines for the gains that the company made while it located in Finland. Would the same rationale apply for personal capital gains? You can freely trade between cryptos, for example between BTC and ETH, without triggering the capital gains. The moment you leave cryptoland, I believe they use the first-in-first-out (FIFO) principle to calculate the profits.

charlesdm 10y ago
In Belgium (where I live), these gains are tax free. So that is one country you could potentially move to to avoid the tax. The same applies for the UK, Malta, Cyprus (non dom regime) and Monaco. If I were you, I'd consider doing the perpetual traveler thing for a while (i.e. while having a base in Malta, which is cheap) and cash out + reinvest in stocks. After a few years, move back, and then pay capital gains tax on those future gains. You can leave most countries without realising the capital gain, even if you've built it up within a country. This is why certain people move to a country without capital gains tax to sell their company. Obviously I don't know Finnish tax law, but within the EU it's generally the case (for now). Have it checked by a _GOOD_ tax lawyer, if that's what you want to do. Building up capital is important - once you have it there's a lot you can do.
- zen_boy 10y ago
  Wow, this advice is very valuable. I'll definitely investigate. Thank you. Another interesting discussion is the ethical side of things. I do feel some obligation to pay back to my home country for things it has provided (free education, healthcare, etc.), many of which were financed with tax income. But paying the whole amount from current and future gains would be tad too much. Also, would it be possible to achieve higher and more direct impact with dodging the taxes and distributing that money via philantrophic means? Just some questions I'm thinking about in the whole picture.
  - charlesdm 10y ago
    1. If you intend to move back at some point, it doesn’t matter. Say you generate €75-100k a year from that million in the future, you’ll be paying 25k a year in taxes anyway. The more capital you have, the more you can generate, hence the more tax you can pay in the future. Pay 333k now vs 25k a year over the next 50 years. But building that first €500k-1m is hard, imo. 2. Always give back. For example, I gift €X,000 every year to local good causes. Yep, I get a 45% tax deduction for it, but I also use it as a way to give back. You’re not going to spend one euro to save 45 cents in tax, if it's not something you believe in. You can also give back by investing in Finnish companies. 3. If you’re interested in Belgium (low cost of living, high quality of life, free health insurance, relaxed society, high taxes but not on capital), I can intro you to my tax lawyer. He’s awesome.
    - zen_boy 10y ago
      Great points. Ultimately, it seems to boil down to deferring tax to the future instead of the present resulting in higher gains for everybody, and having the freedom to choose on how to give back. Both of which seem like the obvious after further consideration. I'm really curious about your story. Would you be interested in continuing this discussion over email?
      - charlesdm 10y ago
        Sure! E-mail address is on my HN profile.
deleted 10y ago
[deleted]