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Why? You eventually have to pay it when you cash out (or buy service, goods with crypto). If you wait you loose tax returns for the amount you invested in cryp
by krzyk 4y ago
Why?
You eventually have to pay it when you cash out (or buy service, goods with crypto).
If you wait you loose tax returns for the amount you invested in crypto (with each year you have it halved). Basically this is the same as in case of stock market.
You don't pay taxes until you sell stock. And here stock is whole crypto market.
- lottin 4y agoI buy 100 USDC. I use these to buy some crypto-currency. 6 months later, I sell the crypto-currency for USDC, making a 10% profit. I sell the USDC for USD. Notice that I have made no profit from the sale of USDC, which is (supposedly) the only taxable event in this series of transactions. I bought 110 USDC worth $1 each, and sold 110 USDC worth $1 each. And I don't even have to sell the USDC for USD, I can buy stuff directly with USDC.
- maccard 4y agoThat's not how capital gains works. > I use these to buy some crypto-currency. 6 months later, I sell the crypto-currency for USDC, making a 10% profit. I In every tax jurisdiction I know of in the world, this is a taxable transaction.
- lottin 4y agoOf course, it is, but they are arguing that it's not a taxable event, in some jurisdictions.
- krzyk 4y agoNo no, you pay not the gain of transaction, you pay tax for the whole amount. And then deduct the amount of fiat you used to buy crypto. So, you buy 100 USDC for $100 - you report that in your tax information (for use in following years tax deduction). Then some time ago, you sell 110 USDC for $120, you pay tax for the amount $120 - $100 (unless the $100 was used year earlier, then you can use just $50 as a cost). If you didn't report any costs (meaning buying crypto) you pay tax for the whole $120 amount.
- maccard 4y ago> You don't pay taxes until you sell stock. And here stock is whole crypto market. No, each coin is equivalent to a stock. A transaction involving swapping one coin to another is a taxable event in every country I'm aware of.
- krzyk 4y agoSorry, but I'm aware how it works in my country and the taxable event is only when you exchange into fiat, service or a physical object. Example for Poland: http://lexplorers.pl/en/polish-taxation-rules-virtual-currency-exchange/ http://lexplorers.pl/en/polish-taxation-rules-virtual-curren... German law is even better, you don't pay any tax for selling digital currencies if you hold it for at least a year.
- maccard 4y agoMy reading of that article is not the same as yours. It clearly state dthat gains due to crypto are to be taxed at 19% - the CGT rate. > German law is even better, you don't pay any tax for selling digital currencies if you hold it for at least a year. That's absolutely not the case - gains are treated as income if held over a year, not tax free. Coinbase has a really solid article on it [0] [0] https://help.coinbase.com/en/coinbase/taxes-reports-and-financial-services/taxes/taxes-for-german-customers https://help.coinbase.com/en/coinbase/taxes-reports-and-fina...
- krzyk 4y agoThanks I wasn't aware that Germany has such taxes. As for Poland see Google translate page of official guidance from goverment: https://www-podatki-gov-pl.translate.goog/pit/rozliczenie-ze-sprzedazy-kryptowalut/?_x_tr_sl=pl&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp https://www-podatki-gov-pl.translate.goog/pit/rozliczenie-ze... I poked around on Google and it looks like it is similar to France where crypto swap is also not taxable. (but I don't pay taxes there so it might be more complicated).