
Finnish Tax Administration: Instructions on Bitcoin income tax - EiZei
http://vero.fi/fi-FI/Syventavat_veroohjeet/Verohallinnon_ohjeet/Virtuaalivaluuttojen_tuloverotus(28450)
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davedx
Someone 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...

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icebraining
There'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.

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zokier
The 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.

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PeterisP
It'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.

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benajnim
Sounds like another LIBOR scandal waiting to happen.

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andrewgjohnson
Is there a one sentence TLDR in English to summarize?

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hannibal5
BTC 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.

~~~
ksherlock
"Mined bitcoins are taxed as earned income."

Depending on the specifics, that has the potential to be a massive problem.
Let's say you mine $1,000,000 in bitcoins but at tax time, the BTC market
crashes and they're now worth $100,000. Do your tax bill now exceed your
income?

This isn't a hypothetical scenario - During the .com 1.0 boom, some people
cashed in their stock options but kept the stock (to get long-term tax rates
on stock that could only go up). A year later, they owed income tax
(historical market price - strike price) on stock that was now worthless.
(capital losses are limited to $3,000/year but carry forward).

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yetanotherphd
I don't think this is a problem, an in the scenario you described the person
was taxed fairly.

All goods fluctuate in value with time. The fair value from the point of view
of taxation is the value when you earned it, whether bitcoin or stock options
(maybe with options it's timed at when you exercise, I'm not sure).

Imagine a person who earned $10,000 and chose to buy some stock with it, and
then that stock crashed. Did that person get taxed on stock that was
worthless? Of course not, they earned money (which was taxed) and chose to
invest it in something risky. The person who chooses to keep their stock is no
different. They could have chosen to sell, and avoid the risk.

Bitcoin is less liquid than stock, so it is harder for a bitcoin miner to
avoid these risks. Nonetheless, that's not the government's fault. Paying tax
is a cost of business.

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parennoob
Offtopic; 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.

~~~
mongol
No doubt.

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capisce
Epäilemättä.

~~~
sesqu
Indubitably.

More relevantly, Finnish uses compound words more than English.

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aszantu
how does some gov determine the bitcoin income? isn't the mining and trading
anonymous?

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polymatter
but 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)

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jerguismi
Privacy/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.

