As with the taxation of Bitcoin? Everything you need to know to the current situation around the topic of crypto-currencies & taxes. A guest post by Oliver Christian Schroen, Dipl. Betriebswirt (FH), tax consultant at Peter & Partner loyalty balance Steuerberatut?gsgesellschaft, Berlin.
Oliver Schroen
14. July 2019BTC$10.641,00 -7.06%part Facebook Twitter LinkedIn xing mail
check If a private person Bitcoin & co., so Coins or tokens that are to be assessed as a crypto-currency, buys, and within 12 months re-sold, must the tax consequences.
It is first of all to brighten up the real facts of the matter and to examine, then, whether a tax is constitutional, or possibly a “structural enforcement deficit” is present.
the facts in the case of the Bitcoin tax
If the elements of the offence, namely the acquisition and profitable following the end of sale of other assets within 12 months, then therefrom – in case of Exceeding the free limit in the amount of 599,99 € – in principle, the tax liability (§ 22 and 23 of the income tax act). This should also be considered as a sale, if the Coins/tokens to be exchanged for other Coins/tokens, or Goods or services to be purchased. Currently, the tax authorities assume that it is in the above-mentioned Coins/tokens to economic goods. (Real estate other) is something.
In all cases where a criterion is not met, so the sale only after the expiry of 12 months takes place or the goods are not sold Coins/Token to this other economy, not the tax liability. Someone has to get the Bitcoins or other Token gift, and not self-acquired, the time of the acquisition date and the purchase price of the donor applies for the calculation of the 12-month.
it is Crucial when the tax assessment is that you must assign this event to a event category, because you can not create for each individual a private tax law. Thus, tax has to be applied for the assessment of the same facts, the same tax law. What applies to Bitcoin, should apply to all the other cryptocurrency Coins/tokens. Differences in taxation should be used, one must justify a different categorisation, this also event jointly well-founded.
Technical Background of Bitcoin tax
If you read the previous paragraph, one gets easily the impression that it was in the case of Coins/tokens to the very real – perhaps even intangible things. Here the Problem lies.
Therefore, a brief study is, first, the end of the technical presentation. According to the Bitcoin White Paper, a Coin is nothing more than a signature chain that starts at some point. The so-called “sale” of Bitcoin, the “seller’s signed” with his Private Key, a transaction request and sends it to the Miner to the Blockchain.
can be One or more of the Miner/can include this transaction request in your Block. A Miner adds his Block at the end of the Blockchain, if he has solved a particular arithmetic task (Proof of Work) as the first. This Miner had also included the above-mentioned transaction request, in its Block, the transaction is considered as successful. You will be permanently successful if the correctness of this block has been confirmed by the Blockchain Involved. It is assumed, when at least six more blocks were added to the end of the Blockchain.
What is sold at the “sale of Bitcoin”?
It is neither a Coin (=signature chain, s. o.), nor is it a physical object or a right to anyone else, sold. The “seller” has provided with his signature, only that now the “buyer” has the opportunity to sign a transaction request, and to send to the Miner. the Unquestionably is paid for this opportunity money , at least in the Bitcoin Blockchain. Whether this is a possibility for the “buyer” will be profitable, is uncertain, because he needs to find someone who is willing to pay him for this possibility, in turn, something. This is not just for the unknown of Coins/tokens at all, of course.
This option can be described, under certain circumstances, even as an asset . Some of the companies pay for the placement of workers to Headhunter five – to six-digit Euro amounts. Here is also paid only for a possibility that the future employees to make a profitable contribution to the company. Nevertheless, no one would judge the Headhunter’s Commission as a commodity. the everything for which money is paid, But is not an asset for tax purposes. And that’s all that comes here!
communication
It is extremely important that the real facts to work out, if people have to do with Cryptocurrency Coins/tokens (crypto people) talk to people, to examine the tax consequences (tax people).
The crypto people are trying to explain to the tax people and the Virtual, using expressions and pictures from the so-called real world, i.e. the world of experience, which is based mainly on the evidence of sensory experience. They describe the virtual processes with a Golden Bitcoin illustrations (as a figure of signature chains?) and purses (Wallets), so what can be seen and touched.
A signature chain (Coin) can’t be mapped in this way, and a purse it is not needed for the understanding, because the simplest Wallet is a Brain Wallet. And that, in the respective Brain (brain) of a cryptographic people is to find a Coin, it should also be quite obvious. Only the Private Key (string) for the signature of the TRANS-action of desire must in the so-called Wallet. for example, Brain Wallet can be saved. If you do not want to overexert his listeners, you can, of course, the patterns of explanation and examples from the vorvirtuellen world, but must live with, if necessary, submit misunderstandings follow.
the Tax consequences of the Bitcoin sale
If the crypto-man, but would like that only the applicable tax consequences occur, he should not stop then, to explain the facts of the case, if he has won the first impression that the tax man seems to have understood him, he should better check in the appropriate way. So it can, for example, be decisive, whether in a concrete case, really the only crypto-currency Coins/tokens or Utility Token, Security Token, or Equity Token “in the game” are. The same applies if it is in the crypto-currency Coins/tokens to which, in which one acquires at the same time, the right to return of exchange – for example, coupled to a fixed redemption price, if applicable, to Fiat with.
you Can fight back against the taxation of Bitcoin?
After the Taxpayer has submitted his tax Declaration at the tax office, manufactures of the Executive, the tax office, a tax assessment. Against this defence of the citizens, using, for example, by lawyers or tax consultants. Thus, the control of the citizen, contrary to the opinion of the Executive, if necessary.
The Executive expresses to Write their opinion, often in so-called BMF, which, however, is only for you self-binding and the purpose that the financial offices act as a single entity. It must adjust the Taxpayer. Neither Taxpayers nor the judiciary, the tax courts, must accept the opinion of the Executive. No agreement between the tax made the citizens and the Executive, is firstly the decision of the Executive to obey (authoritarian). Nevertheless, the taxpayers may bring an action against the tax assessment before the tax court against the decision of the tax office.
intends to depart the taxpayers in his tax Declaration of the opinion of the Executive, he needs to make this in his statement and to explain (free text box, in line 98, on page 4 of the income tax main form 2018ESt1A014NET). He must then assume the resistance of the Executive.
understand the problem and the possibility of Communication
decide on Both the Executive as well as judiciary control people. A tax Advisor who does not want to deal with the processes in the virtual world, one can not reject the corresponding mandates, the Executive and the judiciary can.
it is Therefore for the correct taxation is vital that the affected crypto people to explain to the tax people, in particular in the Executive and the judiciary, the virtual facts of the case sufficiently complete and understandable. It doesn’t have to be every technical detail is explained.
Some fuzziness in the understanding may not be negligible, other. This understanding means for the crypto people – at least today – a significant effort. But the accountants don’t always have it easy to explain the crypto people, which is why the Executive or the judiciary holds a tax to be justified, and that, ultimately, only the judiciary decides on the basis of the given laws and BMF have no legal status.
As for the communicative understanding, i. d. R. at least two Parties, and the Executive and the judiciary must determine the facts of the case, the act requires that the tax liability, it would be desirable that on all pages as something of an “intellectual empathy” would be practiced. This, by Günter Abel as “constructing Forbearance” described,
there would be, firstly, the symbol of character and Expressions of the other Person at all affect, to any other Person, and (be it formal, be it in open materials), content and something to say or show. Then, would be for you, significant that [sic] the Foreign and individually Other to the other of Expression and Person, and consequently a different Interpretation than others may acknowledge, without wanting you under their own Interpretations-horizon force. This is also the possibility of a castles, that [sic] could be associated with the Expression and character using the other Person something that is True, although you do not or can not see that is, under application of its own Standards, on time and with the best will this. (Abel, Günter, Interpretation Of Worlds. Contemporary philosophy beyond Essentialism and relativism, Frankfurt am Main: Suhrkamp 1993, p. 415)
in the deepening of a purely tax-related line of reasoning see also: Schroen, DStR, issue 29 from the 29.06.2019, pages 1369 – 1375, “Are “Bitcoin” economy of goods pursuant to art. the well-established BFH case law?“
Structural implementation deficit in the Bitcoin tax?
Even if, ultimately, a Consensus would arise that crypto currency Coins/tokens such as Bitcoin tax were assessed as a/like economic goods, you could fail a taxation on a “structural enforcement deficit”. In simplified terms, this would be the case if the state has provided no regulations to provide for the basic law-compliant taxation.
only the Honest would be handy, because he gains explained his crypto, the other would have to reckon with no or only a very low risk of Detection and would be quasi-taxpayer untaxed thereof.
Whether such a “structural enforcement deficit” in crypto Win currently exists, is not yet decided by the highest court. The judiciary, here the fiscal court of Baden-Württemberg, Germany, has published on its Homepage, however, already at the 16.6.2018 a judgment of 2.3.2018 (5 K 2508/17), wherein it expresses that the taxation of crypto Win could be unconstitutional. The Revision is under the reference number IX-R 10/2018 to the Bundesfinanzhof, the next and last instance in the Financial, legal action pending.
It will be exciting. Students also unconstitutional: Schroen, NCAS no. 28 from the 05.07.2019, pages 2084 – 2090, “the taxation of “Bitcoin & co.”?”
obligations in the taxation of Bitcoin
no Matter whether it is a cryptocurrency Coins/tokens to economic goods or not and/or whether the taxation, if necessary, could be unconstitutional, it is:
Who has made a profitable sale of Cryptocurrency Coins/tokens within 12 months after the acquisition, it must explain to the tax office to complete. The outside of the 12-month period past Disposals do not have to be declared. In any case, but should be done in a timely manner to ensure that the subsequently adopted tax bills are final, so changeable at any time.
in Particular with this article, nobody is encouraged to sell his Cryptocurrency Coins/tokens within the 12-month period, in trust that the profits will not be taxed from this!
Because the law is still unclear, and only a tax court vaguely expressed, need to be held all of the tax article (unfortunately) in the subjunctive.
this is the case even after the announced Federal MINISTRY of Finance will be published writing, as we will learn from it also, in turn, only the current opinion of the Executive.
opportunities
those Who want to accept an authority-compliant taxation of its fully-declared crypto-transactions, accepted his tax bill and has to rest.
Want to keep someone, however, if this possibility not to pay taxes is wrong, must take a rougher path. He can discuss with his tax Advisor. This can then consider whether he should appeal to the fact that crypto-currency Coins/tokens and Bitcoin are not economic goods, and/or that a structural enforcement deficit exists (o. g. judgment of the Finance court of Baden-Württemberg). Perhaps there are more grounds for Opposition.
conclusion for Bitcoin tax
Who could make use of German tax law to understand, the it will also be possible and reasonable to do so, the virtual world of crypto currencies and the Blockchain technology; to the extent that it is to the clarification of the tax situation is required.
The taxation of this new virtual operations required of a controversial discussion, want a what invite I with my two articles (see above). Because, as so often, it might also not be the case here, that the first solution is the last one. All sides could come together to try to work out, what are the criteria and aspects for the other are both relevant and why you are this.
What is lacking currently, yet sometimes, experience is the willingness to practice “intellectual empathy”, the new virtual world as a challenge, in addition to the old of sense, experience-driven world, and to accept it as something New, and, if necessary, new ways to.
From a constructive discussion can learn all Interested, of course I do.
All in this article in the masculine Form, the terms used are, as far as conceivable to understand as gender-neutral.
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