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German Tax Authorities to tighten Crypto Taxation

Fred

Fred

DLS Dubai
Advance Member
Sep 8, 2019
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#1
Federal Ministry of Finance wants to tighten taxation of crypto currencies

"Politicians are currently taking constant fire on the crypto market. The Federal Ministry of Finance (BMF) wants a uniform framework for the taxation of crypto currencies and has presented a draft that will tighten the thumbscrews for investors in the future."

Increase in the holding period

"The holding period will be increased from one to ten years. Sales transactions with cryptocurrencies that take place before this period expires are therefore taxable. This applies to both staking and, for example, lending. The draft therefore initially assumes that cryptocurrencies were used as a source of income, since they were used to generate other cryptocurrencies. Stakers should therefore make advance payments and subsequently notify the tax office of the information that they have used cryptocurrencies for staking. In a second step, legal action could be taken against taxation."

Original German Article

https://www.btc-echo.de/news/bundes...ung-von-kryptowaehrungen-verschaerfen-120730/
BMF document in english attached.
 

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#2
Fred said:
Increase in the holding period

"The holding period will be increased from one to ten years. Sales transactions with cryptocurrencies that take place before this period expires are therefore taxable. This applies to both staking and, for example, lending. The draft therefore initially assumes that cryptocurrencies were used as a source of income, since they were used to generate other cryptocurrencies. Stakers should therefore make advance payments and subsequently notify the tax office of the information that they have used cryptocurrencies for staking. In a second step, legal action could be taken against taxation."
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Nice - was obvious that they will broke some kind "heaven".
So if someone made before transaction crypto-crypto (since they were used to generate other cryptocurrencies.) if takes 10 years to clear their status.
I just wander how it goes with upcoming exit tax changes there.
If someone went there to cash out this year just 50% holdings he could be very surprised at end of 2021 looks like people should cashout/rebuy all this year to clean their trace.
(sell/buy works only if they can make crypto accounting in all sums income= all profits - all costs, some countries have LIFO FIFO etc)

I am so pissed that every-changes almost always goes in EU to kick taxpayer a*s.
 
#4
Vor said:
this is just laughable. I love the rules they invent because it's clear they can enforce none of it. EU is gonna get really desperate on crypto and in the end will kick and scream like a child.
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Like a wounded animal in the corner... Rather stay away a few steps as its actions are hard to predict.
 
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#5
JackAlabama said:
Like a wounded animal in the corner... Rather stay away a few steps as its actions are hard to predict.
Click to expand...
EU I think is gonna get particularly desperate about crypto since their such socialist babies who just the thought of knowing that some guy didnt pay his crypto taxes is gonna drive them mad. USA will get harsher to it also but the IRS has been use to getting screwed for quite some time now with their budget cuts and lack of funding. Reality is short of criminal enforcement there is 0 chance of them really improving cryptocurrency compliance in any meaningful way.

Staking is income? Lovely... what tax form is generated to show this? none. They will spend so much money attempting to track down some guys $100K in staked crypto that they will never be able to practically enforce these measures. It's just not gonna be resource effective to attempt enforcement via blockchain analysis. The IRS is known to reserve blockchain analysis for mainly IRS Criminal Division cases. Civil Audits will seldom if ever see blockchain analysis go into a tax investigation even if it is crypto related.

They will simply rely on data they can gather from KYC exchanges that didn't issue forms like a 1099-B however, so if say a Coinbase account was left undeclared. USA, Germany, and any other country with increasingly high taxes is just gonna target the idiots who cash out to their bank accounts but dont report the income. It's an easy slam dunk and the only current cost effective way to do crypto tax enforcement. competent auditors dealing in crypto who understand it actually and then the resources to do blockchain analysis will have to remain reserved to criminal investigations into money laundering and terrorist financing they will not be able to chase down every joe who they suspect of tax evasion.

With a little knowledge on how to anonymize your crypto holdings, the tax havens of old are going to become available to everyone from the peon to the guy in the porsche. While I am not always the biggest fan of crypto I do think if things continue to develop rapidly it's great because the tax officials cannot keep up and their will be something better than a 80s swiss bank in your pocket. A crypto wallet that no whistleblower or regulatory change can de-anonymize.
 
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#6
Vor said:
Penso che l'UE diventerà particolarmente disperata per le criptovalute dal momento che i loro bambini così socialisti che solo il pensiero di sapere che un tizio non ha pagato le tasse sulle criptovalute li farà impazzire. Anche gli Stati Uniti diventeranno più severi, ma l'IRS è abituato a farsi fregare da un po' di tempo ormai con i tagli al budget e la mancanza di fondi. La realtà è a corto di applicazione penale, non ci sono possibilità che migliorino davvero la conformità alla criptovaluta in modo significativo.

Lo staking è reddito? Bello... quale modulo fiscale viene generato per mostrarlo? nessuno. Spenderanno così tanti soldi nel tentativo di rintracciare alcuni ragazzi $ 100.000 in criptovalute puntate che non saranno mai in grado di applicare praticamente queste misure. Non sarà efficace in termini di risorse tentare l'applicazione tramite l'analisi blockchain. L'IRS è noto per riservare l'analisi blockchain principalmente ai casi della divisione criminale dell'IRS. Le udienze civili raramente, se non mai, vedranno l'analisi blockchain entrare in un'indagine fiscale anche se è correlata alle criptovalute.

Faranno semplicemente affidamento sui dati che possono raccogliere dagli scambi KYC che non hanno emesso moduli come un 1099-B, quindi se diciamo che un account Coinbase è stato lasciato non dichiarato. Gli Stati Uniti, la Germania e qualsiasi altro paese con tasse sempre più alte prenderanno di mira gli idioti che incassano sui loro conti bancari ma non dichiarano il reddito. È un facile slam dunk e l'unico modo attualmente conveniente per applicare l'applicazione delle tasse sulle criptovalute. revisori competenti che si occupano di criptovalute che lo capiscono effettivamente e quindi le risorse per fare analisi blockchain dovranno rimanere riservate alle indagini penali sul riciclaggio di denaro e sul finanziamento del terrorismo non saranno in grado di inseguire ogni ragazzo che sospettano di evasione fiscale.

Con un po' di conoscenza su come rendere anonime le tue criptovalute, i vecchi paradisi fiscali diventeranno disponibili per tutti, dal peone al tizio della porsche. Anche se non sono sempre il più grande fan delle criptovalute, penso che se le cose continuano a svilupparsi rapidamente è fantastico perché i funzionari delle tasse non possono tenere il passo e il loro sarà qualcosa di meglio di una banca svizzera degli anni '80 in tasca. Un portafoglio crittografico che nessun informatore o cambiamento normativo può rendere anonimo.
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I totally agree with you!
 
#7
Vor said:
EU I think is gonna get particularly desperate about crypto since their such socialist babies who just the thought of knowing that some guy didnt pay his crypto taxes is gonna drive them mad. USA will get harsher to it also but the IRS has been use to getting screwed for quite some time now with their budget cuts and lack of funding. Reality is short of criminal enforcement there is 0 chance of them really improving cryptocurrency compliance in any meaningful way.

Staking is income? Lovely... what tax form is generated to show this? none. They will spend so much money attempting to track down some guys $100K in staked crypto that they will never be able to practically enforce these measures. It's just not gonna be resource effective to attempt enforcement via blockchain analysis. The IRS is known to reserve blockchain analysis for mainly IRS Criminal Division cases. Civil Audits will seldom if ever see blockchain analysis go into a tax investigation even if it is crypto related.

They will simply rely on data they can gather from KYC exchanges that didn't issue forms like a 1099-B however, so if say a Coinbase account was left undeclared. USA, Germany, and any other country with increasingly high taxes is just gonna target the idiots who cash out to their bank accounts but dont report the income. It's an easy slam dunk and the only current cost effective way to do crypto tax enforcement. competent auditors dealing in crypto who understand it actually and then the resources to do blockchain analysis will have to remain reserved to criminal investigations into money laundering and terrorist financing they will not be able to chase down every joe who they suspect of tax evasion.

With a little knowledge on how to anonymize your crypto holdings, the tax havens of old are going to become available to everyone from the peon to the guy in the porsche. While I am not always the biggest fan of crypto I do think if things continue to develop rapidly it's great because the tax officials cannot keep up and their will be something better than a 80s swiss bank in your pocket. A crypto wallet that no whistleblower or regulatory change can de-anonymize.
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nicely written and pretty accurate about the state of affairs inherent to gov agencies.
 
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