What do you think about the taxation of cryptocurrency?

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voyager093
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Joined: Wed Apr 21, 2021 3:55 pm

Re: What do you think about the taxation of cryptocurrency?

Post by voyager093 » Sun Apr 25, 2021 11:54 am

FinnGuyHelsinki wrote:
Sun Apr 25, 2021 9:39 am
Vero.fi states (https://www.vero.fi/henkiloasiakkaat/om ... ivaluutat/) that during April it's possible to provide an attachment detailing the transactions, without the need to individually enter each. I'd suggest to contact Vero and/or a tax lawyer to figure out the details. Vero wants the information for all transactions, and that's what you'll have to provide them. Surely there are others, at least businesses, in a similar situation, and in some way they are able to handle it.
Thanks! Very interesting. But I don't quite understand. Does it mean that it will be possible to attach report (csv of xls)? Or it can be even aggregated report?



Re: What do you think about the taxation of cryptocurrency?

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voyager093
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Re: What do you think about the taxation of cryptocurrency?

Post by voyager093 » Sun Apr 25, 2021 12:34 pm

Maaria wrote:
Sun Apr 25, 2021 1:20 am
By day trading, I mean you buy and sell within a very short time frame, mostly within the same day. Swing trading is when you hold it longer but not very long, maybe few days, weeks or months. Hodl is when you hold for a long term.
Ah, i see. Usually it is something like day trading. But sometimes some part of a currency is not used for a few days. So it is some mix of day and swing trading.

betelgeuse
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Re: What do you think about the taxation of cryptocurrency?

Post by betelgeuse » Sun Apr 25, 2021 1:03 pm

FinnGuyHelsinki wrote:
Sun Apr 25, 2021 9:39 am
Vero.fi states (https://www.vero.fi/henkiloasiakkaat/om ... ivaluutat/) that during April it's possible to provide an attachment detailing the transactions, without the need to individually enter each. I'd suggest to contact Vero and/or a tax lawyer to figure out the details. Vero wants the information for all transactions, and that's what you'll have to provide them. Surely there are others, at least businesses, in a similar situation, and in some way they are able to handle it.
Businesses have their own separate forms.

FinnGuyHelsinki
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Re: What do you think about the taxation of cryptocurrency?

Post by FinnGuyHelsinki » Sun Apr 25, 2021 2:14 pm

betelgeuse wrote:
Sun Apr 25, 2021 1:03 pm
FinnGuyHelsinki wrote:
Sun Apr 25, 2021 9:39 am
Vero.fi states (https://www.vero.fi/henkiloasiakkaat/om ... ivaluutat/) that during April it's possible to provide an attachment detailing the transactions, without the need to individually enter each. I'd suggest to contact Vero and/or a tax lawyer to figure out the details. Vero wants the information for all transactions, and that's what you'll have to provide them. Surely there are others, at least businesses, in a similar situation, and in some way they are able to handle it.
Businesses have their own separate forms.
Sure, the comment was generally about handling taxation for such a high transaction count (i.e. there's must be a way to do that).

FinnGuyHelsinki
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Re: What do you think about the taxation of cryptocurrency?

Post by FinnGuyHelsinki » Sun Apr 25, 2021 2:17 pm

voyager093 wrote:
Sun Apr 25, 2021 11:54 am
FinnGuyHelsinki wrote:
Sun Apr 25, 2021 9:39 am
Vero.fi states (https://www.vero.fi/henkiloasiakkaat/om ... ivaluutat/) that during April it's possible to provide an attachment detailing the transactions, without the need to individually enter each. I'd suggest to contact Vero and/or a tax lawyer to figure out the details. Vero wants the information for all transactions, and that's what you'll have to provide them. Surely there are others, at least businesses, in a similar situation, and in some way they are able to handle it.
Thanks! Very interesting. But I don't quite understand. Does it mean that it will be possible to attach report (csv of xls)? Or it can be even aggregated report?
It's said on the page that there will be more information there once it's available (not too many days of April left), which is why I suggested asking from Vero.

ImatraN
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Joined: Tue Apr 27, 2021 6:45 pm

Re: What do you think about the taxation of cryptocurrency?

Post by ImatraN » Tue Apr 27, 2021 6:45 pm

voyager093 wrote:
Wed Apr 21, 2021 4:05 pm
I am interested in cryptocurrency trading and recently I tried to find information about taxation. There is a topic about taxation of cryptocurrency, and article 2.4 upset me very much. Does anyone have any experience with paying taxes?
This is quite a difficult question.

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agroot
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Re: What do you think about the taxation of cryptocurrency?

Post by agroot » Tue Apr 27, 2021 11:40 pm

FinnGuyHelsinki wrote:
Fri Apr 23, 2021 7:19 am
It's in line with taxation of other forms of capital gain, be it other currencies or whatever else.
Aren't those rules specific to virtual currencies only?

For example, I can't find how capital gain is calculated or collected from normal currency exchange. When it's calculated from shares, only the contemporary euro value matters, not the conversions.

Also all game currencies could be seen as virtual currencies since they could be potentially exchanged as cash, which makes the "Spending virtual currency on purchases of goods and services" rather hilarious - what if you buy a virtual painting in game which cost a million of some virtual currency whose real world value has increased ten fold? :lol:

FinnGuyHelsinki
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Re: What do you think about the taxation of cryptocurrency?

Post by FinnGuyHelsinki » Wed Apr 28, 2021 7:41 am

agroot wrote:
Tue Apr 27, 2021 11:40 pm
FinnGuyHelsinki wrote:
Fri Apr 23, 2021 7:19 am
It's in line with taxation of other forms of capital gain, be it other currencies or whatever else.
Aren't those rules specific to virtual currencies only?

For example, I can't find how capital gain is calculated or collected from normal currency exchange. When it's calculated from shares, only the contemporary euro value matters, not the conversions.
You buy something valued at X euros, and sell/trade it for something else valued at Y euros. If Y > X, there's capital gain. It doesn't matter what "something" is, the princinple remains the same.
agroot wrote:
Tue Apr 27, 2021 11:40 pm
Also all game currencies could be seen as virtual currencies since they could be potentially exchanged as cash, which makes the "Spending virtual currency on purchases of goods and services" rather hilarious - what if you buy a virtual painting in game which cost a million of some virtual currency whose real world value has increased ten fold? :lol:
It's taxable income if/when it's sold or traded.

betelgeuse
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Re: What do you think about the taxation of cryptocurrency?

Post by betelgeuse » Wed Apr 28, 2021 8:48 am

FinnGuyHelsinki wrote:
Wed Apr 28, 2021 7:41 am
agroot wrote:
Tue Apr 27, 2021 11:40 pm
Also all game currencies could be seen as virtual currencies since they could be potentially exchanged as cash, which makes the "Spending virtual currency on purchases of goods and services" rather hilarious - what if you buy a virtual painting in game which cost a million of some virtual currency whose real world value has increased ten fold? :lol:
It's taxable income if/when it's sold or traded.
” From this, it follows that any income from the games is only considered to have been earned, in reference to § 110 of the act on income tax, when the player cashes out from the game. ”

FinnGuyHelsinki
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Re: What do you think about the taxation of cryptocurrency?

Post by FinnGuyHelsinki » Wed Apr 28, 2021 9:02 am

betelgeuse wrote:
Wed Apr 28, 2021 8:48 am
FinnGuyHelsinki wrote:
Wed Apr 28, 2021 7:41 am
agroot wrote:
Tue Apr 27, 2021 11:40 pm
Also all game currencies could be seen as virtual currencies since they could be potentially exchanged as cash, which makes the "Spending virtual currency on purchases of goods and services" rather hilarious - what if you buy a virtual painting in game which cost a million of some virtual currency whose real world value has increased ten fold? :lol:
It's taxable income if/when it's sold or traded.
” From this, it follows that any income from the games is only considered to have been earned, in reference to § 110 of the act on income tax, when the player cashes out from the game. ”
And... ?

betelgeuse
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Re: What do you think about the taxation of cryptocurrency?

Post by betelgeuse » Wed Apr 28, 2021 9:08 am

FinnGuyHelsinki wrote:
Wed Apr 28, 2021 9:02 am
betelgeuse wrote:
Wed Apr 28, 2021 8:48 am
FinnGuyHelsinki wrote:
Wed Apr 28, 2021 7:41 am
It's taxable income if/when it's sold or traded.
” From this, it follows that any income from the games is only considered to have been earned, in reference to § 110 of the act on income tax, when the player cashes out from the game. ”
And... ?
Your answer for ”virtual painting in game” was wrong. It can be sold in the game without tax liability.

FinnGuyHelsinki
Posts: 1172
Joined: Sun Nov 08, 2009 8:52 pm

Re: What do you think about the taxation of cryptocurrency?

Post by FinnGuyHelsinki » Wed Apr 28, 2021 9:54 am

betelgeuse wrote:
Wed Apr 28, 2021 9:08 am
FinnGuyHelsinki wrote:
Wed Apr 28, 2021 9:02 am
betelgeuse wrote:
Wed Apr 28, 2021 8:48 am


” From this, it follows that any income from the games is only considered to have been earned, in reference to § 110 of the act on income tax, when the player cashes out from the game. ”
And... ?
Your answer for ”virtual painting in game” was wrong. It can be sold in the game without tax liability.
agroot wrote: Also all game currencies could be seen as virtual currencies since they could be potentially exchanged as cash, which makes the "Spending virtual currency on purchases of goods and services" rather hilarious - what if you buy a virtual painting in game which cost a million of some virtual currency whose real world value has increased ten fold? :lol:
"Real world value has increased", and "if/when its sold or traded". There's real world value when it's been sold/traded for something in the real world. (Can hardly wait for the discussion to turn into what's "real"...). I used the word "traded" because a transaction, in the real world, doesn't have to be monetary (e.g. trade a car for a boat), for it to potentially incur taxable capital gain.

nimap
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Re: What do you think about the taxation of cryptocurrency?

Post by nimap » Wed Apr 28, 2021 10:11 pm

some more questions,

Mikko buys 1 BTC from his Savings for 50k Euros.
Mikko trades 1 BTC to 25 ETH. (equivalent Euro Value of BTC and ETH doesn't play a role here, as the transactions are done in cryptocurrency)
-> How is this trade different than **In-Game** trading of any MMORPG? How is this going to be taxed?

I suspect the taxable income only applies if Mikko sells his ETH/BTC to Euros or other fiat. What happens in case of trading in stablecoins like USDT, USDC? As they are still **in-Game** currency and not a fiat.

Lets say, Mikko sells his 25ETH for 90k and keeps the money in USDC stablecoin to purchase ETH again if the value drops. He hasn't cashed out the sales in fiat. How is tax calculated in this? Capital gain i.e. 20% flat or Personal Income tax that is x% based on yearly income rate? If it is based on income tax rate, who's responsible for Pensions and Insurance, Unemployment contributions, etc.

betelgeuse
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Joined: Thu Aug 29, 2013 1:24 am

Re: What do you think about the taxation of cryptocurrency?

Post by betelgeuse » Wed Apr 28, 2021 10:23 pm

nimap wrote:
Wed Apr 28, 2021 10:11 pm
Mikko buys 1 BTC from his Savings for 50k Euros.
Mikko trades 1 BTC to 25 ETH. (equivalent Euro Value of BTC and ETH doesn't play a role here, as the transactions are done in cryptocurrency)
-> How is this trade different than **In-Game** trading of any MMORPG? How is this going to be taxed?

I suspect the taxable income only applies if Mikko sells his ETH/BTC to Euros or other fiat. What happens in case of trading in stablecoins like USDT, USDC? As they are still **in-Game** currency and not a fiat.

Lets say, Mikko sells his 25ETH for 90k and keeps the money in USDC stablecoin to purchase ETH again if the value drops. He hasn't cashed out the sales in fiat. How is tax calculated in this? Capital gain i.e. 20% flat or Personal Income tax that is x% based on yearly income rate? If it is based on income tax rate, who's responsible for Pensions and Insurance, Unemployment contributions, etc.
Read the Vero guidance linked in the original post.


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