Finland tax authorities matching Bitcoin transactions and bank transfers • Hacker News Board

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#101

Post by whataretensors » Fri, Apr 20, 2018, 4:14 PM UTC

bitreality wrote: post #67

anc84 wrote: post #43

Earlier quoted context omitted.

> investing in crypto LOL

Crypto 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…

I 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.

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#102

Post by yunesj » Fri, Apr 20, 2018, 4:15 PM UTC

onion2k wrote: post #13

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 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.

> It sucks if you've made a loss, but that's not really the government's problem.

Perhaps the government shouldn't incentivize their residents to make suboptimal investments.

"It's not really the government's problem if they impoverish their citizens and hurt their economy."

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#103

Post by yorwba » Fri, Apr 20, 2018, 4:34 PM UTC

yunesj wrote: post #97

yorwba wrote: post #56

Earlier quoted context omitted.

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.

I prefer the simpler policy, but strongly oppose the 10% net worth tax! > I'm not sure whether anyone would complain Maybe the billionaires would complain? Or is their sacrifice necessary for your greater good? I would also complain. It's unethical. And, we don't need yet another tax on the most value-bearing (and typically philanthropic) people in society, to be collected by the most violent organization in history,…

See, you're not complaining about the food stamps.

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#104

Post by annabellish » Fri, Apr 20, 2018, 4:35 PM UTC

yunesj wrote: post #97

yorwba wrote: post #56

Earlier quoted context omitted.

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.

I prefer the simpler policy, but strongly oppose the 10% net worth tax! > I'm not sure whether anyone would complain Maybe the billionaires would complain? Or is their sacrifice necessary for your greater good? I would also complain. It's unethical. And, we don't need yet another tax on the most value-bearing (and typically philanthropic) people in society, to be collected by the most violent organization in history,…

>we don't need yet another tax on the most value-bearing (and typically philanthropic) people in society

If we assume for a moment that this is true, then why would this state of affairs be okay? Society cannot run on the philanthopy of billionaires.

Further, there's not very much evidence that this is actually true. In terms of largest individual contributions, yes, many billionaires make impressive donations and pay for valuable things, but that's the all-too-common fallacy of looking at absolute figures when it's relative figures that matter.

Ignoring that a lot of charity and philantropic work wouldn't even be _necessary_ in a world with less extreme wealth inequality, the idea that non-billionaires aren't proportionally charitable doesn't really hold much water.

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#105

Post by AnssiH » Fri, Apr 20, 2018, 4:36 PM UTC

AznHisoka wrote: post #10

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…

Jesus, 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”

> 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/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/489...

Income Tax Act (Finnish): https://www.finlex.fi/fi/laki/ajantasa/1992/1992153

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#106

Post by AnssiH » Fri, Apr 20, 2018, 5:01 PM UTC

thisisit wrote: post #24

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…

So, Finland doesn't have tax loss harvesting at all or is it specific only to cryptocurrency trading?

There 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.

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#107

Post by ska » Fri, Apr 20, 2018, 5:07 PM UTC

ptaipale wrote: post #61

pjc50 wrote: post #54

Earlier quoted context omitted.

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,…

The 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.).

Lots of losses aren't deductible, there is no a-priori reason to assume bitcoin losses would be.

You can lobby to have tax treatment of cryptocurrency changed, of course, but you are still bound by the law(s) under which you are tax resident. And they all have weird corners.

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#108

Post by ebikelaw » Fri, Apr 20, 2018, 5:08 PM UTC

darawk wrote: post #96

dancek wrote: post #53

Earlier quoted context omitted.

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…

There's a big difference between complaining about the tax level , or even the tax distribution , and what's going on here, which is completely insane. Paying taxes on a net loss is an absolutely crazy structure that no sane government should be imposing. It's so insane i'm skeptical it's even true, but if it is, he's absolutely right to be upset about it.

Your ethical argument is a bit weak. If society sees Bitcoin as a bad thing then there's no reason why they shouldn't slap a huge tax on any gross transaction, be it 34% or 340%. There are many ways to view cryptocurrencies in a bad light. It is a scheme that some claim seeks to subvert the fiat money systems that are controlled by these national tax authorities, so you can see why they would be upset. It is also, to a large extent, just gambling. Finally, it is a money system mainly used by organized criminals to launder money. In short there is no ethical argument against taxing it, any more than there is against US tax code for gambling (you cannot deduct a net gambling loss against your other income in USA).

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#109

Post by JumpCrisscross » Fri, Apr 20, 2018, 5:09 PM UTC

StavrosK wrote: post #48

acdha wrote: post #39

Earlier quoted context omitted.

They can still require mandatory reporting when real money enters and leaves the system. Everyone is going to need to convert currency into Monero or vice versa and governments routinely require disclosure information at such points.

Yes, for sure. But there can be a secondary market if people accept Monero directly, so you don't have to convert.

It always surprises me how casually crypto currency enthusiasts treat wilful money laundering and tax fraud.

Re: Finland tax authorities matching Bitcoin transactions and bank transfers

#110

Post by Godel_unicode » Fri, Apr 20, 2018, 5:10 PM UTC

pfortuny wrote: post #85

dancek wrote: post #53

Earlier quoted context omitted.

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…

Well, yes but the parent is complaining about taxes on a net financial loss . This is really unjust and something difficult to support.

It 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.