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All they're doing is looking for bank transactions to crypto exchanges in citizens' accounts. What this article doesn't tell, is that the current cryptocurrency
by hedgew 8y ago
All they're doing is looking for bank transactions to crypto exchanges in citizens' accounts. What this article doesn't tell, is that the current cryptocurrency taxation in Finland is unreasonable. You pay 30-34% tax on any profit, but you can not deduct losses.
If you had bought 1 BTC at $1000, another at $14000, and sold both at $3000 you would owe $600 in taxes even though you lost $9000.
You can imagine how people feel about paying these taxes, when they are so obviously flawed and unjust. Some people may owe hundreds of thousands in taxes even if they made no actual profit.
- AznHisoka 8y agoJesus, you can’t deduct losses? If it is only for crypto, I gotta believe its a perverse way to dissuade citizens from investing in crypto. These crypto tax articles become less and less relevant in the coming tax year as people are going to be filing losses, not gains. I expect headlines like “How to make sure you add up your crypto losses to the full amount”
- madshiva 8y agoPeople should invest in people that are close. You can't deduct gambling losses only winning (on my country) and this is right.
- anc84 8y ago> investing in crypto LOL
- bitreality 8y agoCrypto is a legitimate investment. It's an entirely new asset class. If you think it's going away anytime soon you're delusional. 5 years ago you could buy 1 BTC for $100 USD. And at that point it wasn't even new. 1 year ago you could buy 1 ETH for about $50. The average person would struggle very hard to find any investment that goes 80X in 5 years, or 12X in one year. With Bitcoin and crypto, lots of regular people have made returns they could never dream of on the stock market.
- Hamuko 8y agoMy collection of funny JPEGs is also a legitimate investment. It's an entirely new asset class, although not as overhyped as Bitcoin.
- bitreality 8y agoRight. Your collection of infinitely reproducible picture files is comparable to the first truly decentralized value transfer and storage system. It's clear you have no intention of understanding what makes Bitcoin interesting or valuable.
- Hamuko 8y agoWhat happened to gold?
- aje403 8y agoHigh returns != legitimate investment
- bitreality 8y agoFixed supply, instantly audit-able, open source, decentralized. In many ways, you know a lot more about what you're buying with Bitcoin than with equities.
- aje403 8y agoThat's very true now that you mention it, equities are not open source or decentralized. I'm liquidating my portfolio and going all in
- whataretensors 8y agoI agree with you entirely. You won't find enough allies here for some reason. The technical ability exists but there's also a refusal to look and think for themselves. We are looking at the tools that can completely redefine our society. Meanwhile a significant amount of engineers here are selling all their time for 0% royalties and investing in "2045 retirement funds". It's no wonder there's hostility to a system that says you don't have to do that.
- AnssiH 8y ago> If it is only for crypto I'm no expert, but from what I understand, you can't deduct losses from regular currency deposits, either. Here is a decision from the Supreme Administrative Court in a case where someone had converted 460 000 EUR to USD and later converted them back to EUR with a loss of 30 000 EUR and wanted to deduct the loss from their capital gains tax (Finnish): http://www.kho.fi/fi/index/paatoksia/vuosikirjapaatokset/vuosikirjapaatos/1449755608736.html http://www.kho.fi/fi/index/paatoksia/vuosikirjapaatokset/vuo... It was denied as there is no clause in the Income Tax Act allowing such a deduction. Tax Administration guidance (Finnish): https://www.vero.fi/syventavat-vero-ohjeet/ohje-hakusivu/48935/omaisuuden_luovutusvoitot_ja_tappiot_lu4/ https://www.vero.fi/syventavat-vero-ohjeet/ohje-hakusivu/489... Income Tax Act (Finnish): https://www.finlex.fi/fi/laki/ajantasa/1992/1992153 https://www.finlex.fi/fi/laki/ajantasa/1992/1992153
- onion2k 8y agoYou pay 30-34% tax on any profit, but you can not deduct losses. Whether you made a profit or not doesn't have to be a consideration as far as tax goes. You pay a percentage of the capital amount when you choose to liquidate your asset. It's effectively a wealth tax. There are lots of taxes around the world that work this way. It sucks if you've made a loss, but that's not really the government's problem.
- AznHisoka 8y agoWait... How is the inability to deduct losses OK in any government? Yes, you have to pay taxes on the gains when you liquidate but you can offset that with any losses too
- 21 8y agoIn Finland you are required by law to name your children one of the 100 approved Finnish boy or girl names (there is an exception for ethnic minorities) Imagine such a law in UK or USA. Finland is a bit more "special" than other countries.
- Hamuko 8y agoAre you a Russian bot?
- 21 8y agoI AM MASTER. YOU FOUND ME. DARN IT.
- xmodem 8y ago5 seconds of googling reveals that this is bullshit. I didn't even need to resort to google translate: https://almanakka.helsinki.fi/en/name-days/finnish-names-act.html https://almanakka.helsinki.fi/en/name-days/finnish-names-act...
- 21 8y ago
- Jhsto 8y agoThis is even worse if you are a student who receives government aids: transactions are regarded as income (whether loss or profit) by the social insurance institution. So in other words, if you buy Bitcoin for 1000 euros and sell it at 500, you have made efficiently 500 euros in "income." With the notion of the parent post, this makes trading unviable, because if you exceed 12K€ in income a year (in any form, be that employment etc.), you have to start paying back your living aids.
- Symbiote 8y agoIf a student has money to gamble on Bitcoin, perhaps they don't deserve the grants.
- sgtmas2006 8y agoGetting in early was an option as well.
- acdha 8y agoIn that case they wouldn’t be showing losses, though, would they?
- ryanlol 8y agoThese are not really grants.
- notahacker 8y agoWhilst the apparent double counting doesn't seem fair, it also doesn't seem like a good idea for students who rely on government aid for their living costs to be speculating in risky exotic financial assets...
- mcny 8y agoThis is kind of off topic but we should really get rid of all income thresholds for government services and safety nets. They divide people and make them resent one another. I think we should instead make these programs available to all otherwise qualifying applicants (New York excelsior can keep the state residency requirement but should not be allowed to say it applies only to people who make under $125k a year). If we "can't afford" to offer a program to all qualifying people regardless of income that means we don't have the political will to make the program happen and should get rid of it.
- deleted 8y ago[deleted]
- thisisit 8y agoSo, Finland doesn't have tax loss harvesting at all or is it specific only to cryptocurrency trading?
- hedgew 8y agoIt only applies to cryptocurrencies.
- doikor 8y agoWell not really. It is just that you can only deduct losses on things that the government deems to be investments which in the case of crypto currencies they don’t.
- AnssiH 8y agoThere are deductions to capital gains tax, but they do not apply here as cryptocurrencies are not considered property but instead an agreement between the users, if I understood correctly. But regular currency trading losses are not deductible either (per KHO:2015:178), so I guess crypto is not really unfairly discriminated against in this case.
- VMG 8y agoThe hodl subsidy
- mvindahl 8y agoIs this really the case? My expectation would be that you would be taxed on the net profits at the end of the year but would have no deductions on net losses at the end of the year. It's a bit skewed but I'm pretty sure that's how profits from overseas online gambling is taxed here in Denmark. Either way, it would make sense to tax cryptocurrency trading by using the same tax code as other kinds of overseas online gambling.
- hedgew 8y agoIt is. Net profits are not taxed, but the profits of any profitable trade are. Trades resulting in loss are ignored. The tax authorities interpreted cryptocurrencies not as a currency or as a financial asset, but as "trade agreements", which allowed them to take this stance. I'm not sure why they would skew the taxation so far against taxpayers' favor.
- usrusr 8y ago> but the profits of any profitable trade are. Trades resulting in loss are ignored. Kind of like lottery winnings are taxed where they are taxed. Or is there a country that not only taxes lottery wins but also makes lottery tickets a deductible expense?
- charlesdm 8y agoIt's an interpretation which might or might not be correct. If you are living in Finland and believe that this is incorrect, then you are free to go to court and make your case to a judge as to why the tax authority is wrong.
- dancek 8y agoWell, all taxation can be considered unreasonable. It's true that the system doesn't work similarly for cryptocurrencies and stock, but that's no reason not to pay your taxes. It's not like the system came as a surprise to the people who sold crypto in 2017. My personal experience is that most Finns whine about taxes, yet they also complain if healthcare and infrastructure and education isn't perfect and completely free. I feel that as a smart responsible adult it's better to be happy that I have income to pay taxes for, and be grateful of everything the taxes pay for. If I didn't like the way things are done in Finland, I'm free to move elsewhere (or take up politics, get elected and change everything the way I like it).
- Moru 8y agoThat is the same in all countries, everyone wants to pay less taxes and get everything for free.
- pfortuny 8y agoWell, yes but the parent is complaining about taxes on a net financial loss. This is really unjust and something difficult to support.
- deleted 8y ago[deleted]
- Godel_unicode 8y agoIt sounds like it's being taxed like gambling rather than investing. You don't get to write off a massive loss at the casino, and if you have a net loss you still owe on the nights you came out ahead.
- cookingrobot 8y agoIn the US gambling losses are deductible, to the limit of your winnings, according to this. https://www.google.com/amp/s/turbotax.intuit.com/tax-tips/jobs-and-career/can-you-claim-gambling-losses-on-your-taxes/amp/L4lQ3IAWt https://www.google.com/amp/s/turbotax.intuit.com/tax-tips/jo...
- pjc50 8y agoI'm skeptical of this, and went looking for primary sources. The Finnish tax authority website seems to have a different example: https://translate.google.com/translate?sl=fi&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=https%3A%2F%2Fwww.vero.fi%2Fsyventavat-vero-ohjeet%2Fohje-hakusivu%2F48411%2Fvirtuaalivaluuttojen_tuloverotu%2F&edit-text=&act=url https://translate.google.com/translate?sl=fi&tl=en&js=y&prev... (from https://www.vero.fi/syventavat-vero-ohjeet/ohje-hakusivu/48411/virtuaalivaluuttojen_tuloverotu/ https://www.vero.fi/syventavat-vero-ohjeet/ohje-hakusivu/484... ) "Example 1: One person has in the past bought 1,000 bitcoins for 500 euros, ie one Bitcoin cost EUR 0.5. He later bought more 500 bitcoins for 500 euros, which means that one euro received one bitcoin at that time. After purchasing, he holds 1 500 bitcoins. He sells 1 200 bitcoin at a time when one Bitcoin costs 1.5 euros. The sale of virtual currency realizes the taxation of the change in value, giving him a taxable income of EUR 1 800 - (EUR 500 + EUR 200) = 1,100 EUR. After the transaction, a person still has 300 bitcoins purchased for 300 euros. " "Example 2: One person has in the past bought 1000 bitcoins, with one euro receiving two bitcoins. One Bitcoin cost EUR 0.5. After acquiring, he has owned 2,000 bitcoins. He buys goods at a total of 1,000 bitcoins at a time when bitcoins cost ten euros per piece. He therefore purchases goods worth a total of EUR 10,000. The acquisition of goods realizes the taxation of the change in the value of a virtual currency, giving him taxable income in this case as a capital income of EUR 10,000 - EUR 500 = EUR 9,500. After purchasing the shop, there were still 1,000 bitcoins remaining for the purchase price of 500 euros. " etc. There's another example which shows making a loss is not a taxable event.
- ptaipale 8y agoThe third example lays out a situation where the loss is not deductable even though it is a real loss. What worries me more is that this is an "instruction", but the tax authorities are not bound by instructions. And they are known to do as they want, even flouting European law (particularly when it is to do with car taxes, although not so much related to bitcoins.).
- deleted 8y ago[deleted]
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- aphextron 8y ago>You can imagine how people feel about paying these taxes, when they are so obviously flawed and unjust. Yep, sounds like taxes. You can either pay them, or see how a judge responds when you refuse and call them flawed and unjust.
- charlesdm 8y agoJust because you think a law is unreasonable, doesn't mean it does not apply. It might be unreasonable, but you still have to pay (or relocate, or find a loophole around it)
- aje403 8y agoI think it's good because it encourages crypto speculators and miners to emigrate somewhere else where they are more welcome
- neffy 8y agoThis is a similar complaint to that which people like Goldman Sachs have with taxation on shares... Here comes the new financial system, same as the old one, with added bugs.
- mamon 8y agoWait until you hear how BTC transactions are taxed in Poland: they are subject to a 1% tax on civil law transactions (TCTL). The worst part isn't that you pay 1% on transactions where you lost money. The worst part is that you are supposed to fill and send the tax form for each individual transaction. Now imagine automated trading, making hundreds of transactions per day - I suppose the cost of paper for printing those tax forms would outweigh any potential gains.