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Bitcoin now 'unit of account' in Germany

theguardian.com

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Re: Bitcoin now 'unit of account' in Germany

#31

Post by PeterisP »

derefr wrote: post #16

I wonder how Germany expects to be able to tax this? It's very hard to audit someone's collection of BTC wallets. Will this only be to require companies to collect VAT for BTC transactions, or will it also include, say, income tax when you're being paid in BTC?

Of course you have (and already had, always) to pay income tax when being paid in BTC! The "money" definition doesn't matter for that, if you've been paid in any other nonmonatery goods or benefits, it's always been taxable.

Taxing that works - if the volume is sufficient to arise suspicion, then seize the relevant documents and computers, find evidence and charge you for tax fraud.

Re: Bitcoin now 'unit of account' in Germany

#32

Post by PeterisP »

alexro wrote: post #27
betterunix wrote: post #25

Earlier quoted context omitted.

No means to control Bitcoin? As long as the German government is able to enforce its tax code it can control Bitcoin. Governments have been collecting taxes on things that are much harder to track than Bitcoin for much longer than Bitcoin has existed.

No way for now, still not clear how they gonna assign monetary value to BTC, what exchange rate they will use?

Come on - that's not an obstacle. First, it's YOUR duty to report the income and the appropriate local currency value of that income, so picking a rate is your problem, not theirs.

And then, if they don't like your choice rate, then they pick a rate themselves, tax you on that, and fine you for misrepresenting your income.

Afterwards you (and everyone else) begs them to publish some guidelines on what rate should be used, they do so, and everyone is [mostly] happy.

Re: Bitcoin now 'unit of account' in Germany

#33

Post by PeterisP »

agilebyte wrote: post #18
derefr wrote: post #16

I wonder how Germany expects to be able to tax this? It's very hard to audit someone's collection of BTC wallets. Will this only be to require companies to collect VAT for BTC transactions, or will it also include, say, income tax when you're being paid in BTC?

A company pays for work done in BTC. They want to put that into their books as an expense to reduce their tax burden. The other party that did the work is now on record and can be taxed also.

And it is taxed even if it's off record; not declaring the income and successfully keeping it off record doesn't mean "not taxable", it means "tax fraud".

If you manage to hide that income for some time but it comes to light a few years later - BAM, you owe the back taxes in triple+interest.

Re: Bitcoin now 'unit of account' in Germany

#34

Post by walden42 »

VMG wrote: post #29
walden42 wrote: post #19

Earlier quoted context omitted.

> However, companies wanting to use it for commercial transactions would need permission from the Federal Financial Supervision Authority. That's not a good thing for bitcoin, though, or for the free market in general. One of the main ideas behind bitcoin is its ease of use compared to exisiting methods. The more regulations and limitations imposed on it, the more it becomes like everything else, in terms of ease of…

It would be a bad thing if Bitcoin could be controlled that way. Luckily, the government cannot influence bitcoin transactions.

Of course they can't, but they can regulate its use and acceptance in their country. Eg. more paperwork/licenses required to accept them, a more difficult taxation process, etc.

Re: Bitcoin now 'unit of account' in Germany

#35

Post by gioele »

justincormack wrote: post #21
gioele wrote: post #10

Bitcoin fulfils easily the definition of "electronic money" found in the European directive 2009/110/EC, art. 2 def. 1: > 2. "electronic money" means electronically, including magnetically, stored monetary value as represented by a claim on the issuer which is issued on receipt of funds for the purpose of making payment transactions as defined in point 5 of Article 4 of Directive 2007/64/EC, and which is accepted by…

I don't see that it represents a "claim on the issuer" though. Although you could claim it as issued by the entropy of the universe in a double entry system...

issuer = miner

You bitcoins are accepted because they are recognized by others to be part of a block originally mined by someone.

Really not that different from how money is "printed" by central banks these days (somebody presses the "generate €1.000.000" key and that updates a value in a DB).

Re: Bitcoin now 'unit of account' in Germany

#36

Post by aianus »

Osiris wrote: post #24
walden42 wrote: post #19

Earlier quoted context omitted.

> However, companies wanting to use it for commercial transactions would need permission from the Federal Financial Supervision Authority. That's not a good thing for bitcoin, though, or for the free market in general. One of the main ideas behind bitcoin is its ease of use compared to exisiting methods. The more regulations and limitations imposed on it, the more it becomes like everything else, in terms of ease of…

With the exception that it's supply and exchange rate cannot be (easily) manipulated by governments, which removes a significant power that they currently exercise over fiat currencies.

The exchange rate can be manipulated by governments just as easily as conventional currencies. The government (or central bank) just needs to engage in open-market transactions using its large reserves of fiat and/or bitcoin.

For example, the Bank of Japan could lower the value of the yen against the bitcoin by purchasing large amounts of bitcoin using yen on the open market.

Re: Bitcoin now 'unit of account' in Germany

#38

Post by oleganza »

kaonashi wrote: post #37

So Bitcoins aren't a get-out-of-taxes-free card. Isn't that it's primary practical draw? What volume of Bitcoin transactions involve black-market activity?

Bitcoin have different facets. For people leaving in places with a variety of banking choice, some of them may come unnoticed.

Bitcoin is great when:

1. You want to accept or make payments from a country where CC fraud is high or banking is rare/expensive.

2. You worry about high inflation rates in your home currency, and your government creates a lot of obstacles to move your money to other currencies (like today in Argentina).

3. Or you want transact in a grey market tax-free. E.g. a guy selling his IT consulting services.

Re: Bitcoin now 'unit of account' in Germany

#39

Post by justincormack »

gioele wrote: post #35
justincormack wrote: post #21

Earlier quoted context omitted.

I don't see that it represents a "claim on the issuer" though. Although you could claim it as issued by the entropy of the universe in a double entry system...

issuer = miner You bitcoins are accepted because they are recognized by others to be part of a block originally mined by someone. Really not that different from how money is "printed" by central banks these days (somebody presses the "generate €1.000.000" key and that updates a value in a DB).

Its not a liability of the miner though. I agree it is not much different from money printing, but there is still a balancing entry, so money is a liability of the central bank, although that is meaningless.
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