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Finnish Tax Administration: Instructions on Bitcoin income tax
- deleted 13y ago[deleted]
- davedx 13y agoSomeone should put together a Wiki containing links to all current tax regulations for Bitcoin in each country. I'm very interested in what the Netherlands is going to do / has done with Bitcoin tax declarations, for example...
- icebraining 13y agoThere's https://en.bitcoin.it/wiki/Tax_compliance#Jurisdictions https://en.bitcoin.it/wiki/Tax_compliance#Jurisdictions - it's just a matter of filling in the details.
- andrewgjohnson 13y agoIs there a one sentence TLDR in English to summarize?
- vilqqu 13y agoI'm not an expert, but here's my summary: Profits from bitcoins are taxed as capital gain, except for profits gained from mining or games, which are taxed as earned income.
- deleted 13y ago[deleted]
- dagw 13y agoIf you're taxed on your mined bitcoins as earned income, I wonder if you can write off your mining costs as business expenses.
- hannibal5 13y agoBTC is not currency or security. BTC is treated as any other asset outside currencies and securities. Person must pay taxes for capital gains but they can't do tax deductions from losses. Taxes hit every time BTC is used to buy something. Mined bitcoins are taxed as earned income.
- MacsHeadroom 13y agoMined bitcoins come with plausible deniability. Connecting them to a specific person is impossible. So good luck with that, tax man.
- PeterisP 13y agoStep 1: Mine bitcoins with plausible deniability. Step 2: Buy stuff with bitcoins, possibly laundering them. Step 3: Go to jail for intentional tax fraud. Good luck. You need to spend those bitcoins to get some use of them - if you do it on a small scale, noone cares about losing 20 cents in tax; if you do it on a large scale, it becomes linked to you. For example - seller reports (for tax purposes) who/where they delivered goods; any bitcoin-money converter links your identity to this income; any bitcoin-vs-stuff barter can be a police sting operation, etc. Denying and laundering income is an old, traditional crime - and the same policing approaches that work with cash laundering will tend to work with bitcoin laundering as well. Paying taxes costs some amount of money - but saying "good luck with that, tax man" can easily go over to crime/jail category; think twice if you want to go over to that road.
- deleted 13y ago[deleted]
- MacsHeadroom 13y agoI'm too honest to go down that road. And as I understand it, Finnish people tend to pay their taxes proudly. (Might have something to do with the majority of their workforce being employed in the public sector.) So I don't think this will really be an issue anyway.
- 13y ago
- Sami_Lehtinen 13y agoHere's short translation in Bitcointalk forum. https://bitcointalk.org/index.php?topic=303406.new https://bitcointalk.org/index.php?topic=303406.new
- aszantu 13y agohow does some gov determine the bitcoin income? isn't the mining and trading anonymous?
- polymatter 13y agobut all transactions are public [1] Thus once you inform gov which are your bitcoin wallets, they can look through the block chain. Ironically, this means they will have much much more info on you than if they just had your bank account number. [1] https://en.bitcoin.it/wiki/Transactions https://en.bitcoin.it/wiki/Transactions
- jerguismi 13y agoPrivacy/security-conscious bitcoin user can have thousands of bitcoin addresses (one for each transaction, the recommended way of using by the official client.) Also off-the-chain transactions are possible on several wallet services.
- PeterisP 13y agoThe same as cash income - primary way is that you report it yourself; secondary way is auditing suspected violators, possibly involving policework.
- betterunix 13y ago"Anonymous" in the sense of "broadcast to the entire network."
- hanley 13y agoIt's anonymous until you exchange your Bitcoins for Euros/Other currency.
- zokier 13y agoThe example 2 in section 2.1.2 is curious. It essentially says that the value of goods purchased with bitcoins is determined by the eur-btc exchange rate at the time of purchase. I find that idea problematic because there afaik is no official exchange rates for bitcoin.
- PeterisP 13y agoIt's simple, you do it just as for any other freely traded currency pair, like EUR-USD - assign some body (central bank or some dept in ministry of finance) a duty to publish 'official accounting rates' and make a procedure on how to calculate such rates such as average rates of multiple large trading bodies. It doesn't mean an offer to buy/sell at those exact rates (e.g., EUR/USD spot rates at every second will definitely be different from the 'official' accounting rates), but it's a guideline to evaluate value of things nominated in that currency.
- benajnim 13y agoSounds like another LIBOR scandal waiting to happen.
- hosay123 13y agoAFAIK there is no official exchange rate for EURUSD or any other currency pair.
- jpalomaki 13y agoECB is publishing reference rates: http://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html http://www.ecb.europa.eu/stats/exchange/eurofxref/html/index... I don't know if they quality as "official", but probably good enough for taxation purposes.
- jsnell 13y agoIt doesn't need to be an official exchange rate, it's what I guess would be best translated as a "fair market value". If there appears to be no fair market value for the virtual currency, one would need to be agreed upon by the parties. (I base this on the accounting rules listed for the receiver of the virtual currency). What I find curious is the asymmetric handling of realized exchange rate profits vs. losses. Profits are taxed as capital gains, but unlike with e.g. shares, you can't use realized losses to offset the profits.
- parennoob 13y agoOfftopic; possibly interesting -- is the average word in Finnish far longer than the average word in English? I ran `style` over that piece of text, and it told me that the average word had a length 6.74 characters. That seems pretty long to me.