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Finland tax authorities matching Bitcoin transactions and bank transfers

metropolitan.fi

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Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#51

Post by trinitry3 »

mvindahl wrote: post #45
hedgew wrote: post #22

Earlier quoted context omitted.

That doesn't sound right. The authorities in Finland specifically tax gains made with cryptocurrencies. You only pay tax if you make profit on any individual trade. But you can not deduct trades that made a loss. It's not exactly a wealth tax, but it's also hard to consider a capital gains tax because you can't deduct losses. Treating other investment products this way would probably have horrific results, because it…

If you buy stocks in a publicly traded Finnish company, then you're taking on a risk in the hope of making a profit. But you are also putting your money at work in the Finnish economy, stimulating job creation and growth. Everybody wins, hopefully. If, on the other hand, you put down your money in bitcoin or at the online blackjack tables then you're gambling, not investing. Win or lose, your gamble creates zero dome…

> Why should any government incentivize that?

Well maybe they shouldn't, but it's shitty to apply this kind of policy retroactively. (I don't know when they actually announced the fact that you can't deduct losses.)

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#52

Post by ryanlol »

Symbiote wrote: post #25
Jhsto wrote: post #20

Earlier quoted context omitted.

This 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…

If a student has money to gamble on Bitcoin, perhaps they don't deserve the grants.

These are not really grants.

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#53

Post by dancek »

hedgew wrote: post #7

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 peopl…

Well, 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).

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#54

Post by pjc50 »

hedgew wrote: post #7

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 peopl…

I'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... (from 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.

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#55

Post by dictum »

brownbat wrote: post #49
mcny wrote: post #32

Earlier quoted context omitted.

This 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). I…

I sympathize with the consistency of a "pure universal" approach to policy, but like many purist policy philosophies, I don't think it would survive rigorous implementation. For so many reasons. Chief among them, maybe, people are generally reluctant to support governments engaged in transfers of resources from themselves to billionaires.

An instance of "ignorance is bliss": people would rather see transfers of resources from themselves to billionaires through corporate welfare (often advocating for it in hopes of a better local economy) and special interest lobbying than direct, documented and smaller cash transfers.

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#56

Post by yorwba »

brownbat wrote: post #49
mcny wrote: post #32

Earlier quoted context omitted.

This 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). I…

I sympathize with the consistency of a "pure universal" approach to policy, but like many purist policy philosophies, I don't think it would survive rigorous implementation. For so many reasons. Chief among them, maybe, people are generally reluctant to support governments engaged in transfers of resources from themselves to billionaires.

If you provide the billionaire with food stamps, but tax them at 10% of their net worth (which would reduce them to a mere millionaire in ≈65 years), I'm not sure whether anyone would complain about the food stamps.

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#57

Post by Moru »

dancek wrote: post #53
hedgew wrote: post #7

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 peopl…

Well, 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 f…

That is the same in all countries, everyone wants to pay less taxes and get everything for free.

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#58

Post by aphextron »

hedgew wrote: post #7

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 peopl…

>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.

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#59

Post by usrusr »

hedgew wrote: post #42
mvindahl wrote: post #40

Earlier quoted context omitted.

Is 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 ga…

It 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.

> 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?

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