First of all, let me start by saying FUCK XRP. Ripple goes against everything that crypto was supposed to be about. Not to mention the token is completely worthless. If you are a Ripple supporter, stop reading and go kys. Another thing that goes against crypto is selling all for fiat. However, taking profit or hedging is understandable.
I see increasingly many tax threads on biz and for the most part they are all filled with clueless people spreading false information. >user just open a bank account in asia and cash out there >user just go to country x they don't even know what crypto is >fuck the IRS I will not report anything
Since taxation is theft and I understand international taxation pretty well I'll write this guide for you, so you can take profit without losing it all to taxes. Hope it is appreciated.
There are basically two ways people would minimize taxes on crypto. One of these is called tax avoidance and is completely legal, the other one would most likely be tax evasion and illegal. My personal opinion is that the legal way is better since it would suck to have to look over your shoulder all the time and possibly be caught someday having to pay the tax owed + fines + possibly prison. If you have a significant amount of money you will want some kind of paper trail on this so that you can actually use the money for lambo, house, whatever. What good is having 10M in a corporate bank account in a tax haven, or 1 million in cash if you can't use it easily for anything.
The tax jew has gotten more greedy and controlling recently and basically the big western countries (US, OECD) have forced almost all other countries including tax havens to sign tax agreements (AEOI and FATCA) that force them to report all bank accounts of foreigners back to their country of residence. Either the countries sign up, or they get put on the "blacklist". This is why it is pointless to open any offshore account and cash out in another country since the tax authority in your country of residence would know about this anyway. There are some countries that don't report but they mostly suck for banking and you never know if they will sign up for reporting in the future.
That said, let's start with option A, the legal option:
A) Moving your tax residence:
Countries will tax you either based on residence, or citizenship (US, Eritrea)
For US citizens - your only option is to either renounce your citizenship, or move to Puerto Rico.
For everyone else - you can move your tax residence to a more favorable country. This means (in most cases) that you have to actually move to a new country. This process involves two steps: 1) make sure you become tax resident in the new country. For most countries this means you are present there for over 183 days/tax year, sometimes less, sometimes more. Some countries also have other requirements like you have to have some economic tie, make investment etc. 2) Make sure you become tax non-resident in your home country. This also depends on the country but usually it is required that you "cut all your significant ties". Significant ties could be e.g. family, real estate, social security, insurance, bank accounts, phone number etc.
Where should you move? This depends on many factors, like how rich you are, where you are from.
Asher Price
Im listening... Keep going friend.
Ryder Sanchez
The ideal country fulfills these criteria: No or low taxes, easy to get residence permit (note residence is not the same as tax residence), cheap, good internet, supported on the big crypto exchanges. Of course, the perfect country doesn't exist and you will have to compromise on some of these.
Some have said >just move to country X, they don't understand crypto Keep in mind, just because a coutnry doesn't understand crypto doesn't mean you are not liable for tax on it some way or another. You should also expect that many countries will be implementing new or changing the tax treatment of crypto after the explosion in value this year.
The other thing you need to understand is that some countries have stupid and complicated tax laws that differ depending on how you use crypto. For example long term investing could be tax free but then if you trade it could be taxed under income tax. IIRC Belgium (or maybe it was some other country) would otherwise have tax free capital gains but not with crypto because they have some rule about "being a responsible head of the household" when investing so crypto would certainly be subject to this speculation tax.
This is why it would be best if the country in question either have clear rules about crypto or have low tax on everything so you don't think you will be taxed at 0% CGT only to find out they will tax it as 40% income tax.
In europe crypto is exempt from VAT, but this is not necessarily the case in the rest of the world. So be sure to check this as well as it could add another 10%+ taxes
Below I will list a few countries:
Jacob Lewis
No-tax countries - These are the most expensive choice, both in cost of living and residence permit >The Bahamas >Cayman Islands >BVI >Monaco >UAE >Belarus this one is only tax free for crypto, 150k € investment for residence visa
Low-tax countries (possibly tax free on CGT): >Paraguay >Belize >Hungary >Montenegro >Bulgaria 10% flat tax on all type of income, including crypto. >Switzerland >Russia >Singapore tax free if holding, taxed if trading >HK >Georgia can stay 1 year without visa >Andorra >Estonia >Malaysia
Justin Thomas
Special cases, possible 0 or low tax on CG but high taxes on income(trading) >Denmark Tax free only if your purpose was to buy something with the crypto when you bought it or if you invested only based on interest in the tech instead of trying to make a profit. Obviously this is not the case if you have been chasing PnDs on Binance all year >Portugal Tax free if held as investment, not if trading >Netherlands same as above >NZ same as above >Slovenia same >Germany Tax free if held for 1 year
Special Case 2, territorial taxation - these countries don't tax foreign sourced income. For the most part crypto trading would be probably considered local income however if you are physically in the country trading there. Which is why I would not pick any of them personally >Malta >Panama >Philippines >Costa Rica >Malaysia
You will have to double check the country rates, the above is from memory only. There are also many more countries you could consider, you will have to DYOR
Mason Nguyen
B) Tax evasion by starting an offshore company
Starting an offshore company and taking profits there without paying tax would in most cases be illegal tax evasion, and the risk of getting caught quite high nowadays if you don't know exactly what you are doing. As I don't know enough about this I will not be giving any detailed advice. The important part however is staying anonymous so the company can not be linked back to you. The corporate bank account must also not be linked to you or else it will be reported just like a personal account under the information sharing agreements. So you want a company that you control, while you stay completely off the radar.
In theory you would need - nominee directors - nominee shareholders - bank signatory
These structures with companies, foundations, trusts etc. can get pretty complex and expensive. But as said, this I would not recommend unless it is legal in your country.
C) combination of A & B
if you live in a country that does not have CFC rules, and you start a company in a tax haven, you might also be able to legally pay no tax on the profits. This is also outside my expertise but you can read more about it here for example tax-free.today/blog/cfc-rules/
None of the above is legal advice and I would suggest you contact a real tax lawyer familiar with local and international law before you do anything at all. I also advice you to not do anything illegal. Don't give the governments any more reason to fight against crypto. Or better yet, don't cash out at all. Fuck fiat.
If anyone has anything to add, or think I made a mistake in my post, please comment
Luis Rogers
guess you were the only one...
Dominic Morgan
Some real advice!
Kevin Hill
I'm here too bro, please keep going. This info is solid gold. Have a bump on me
Kevin Jones
now this is a worthwhile thread! nice work man
Landon Green
>on't give the governments any more reason to fight against crypto.
I say bring it on. Its inevitable that they are going to fight crypto and try to bring their own currency into the mix. Not gonna happen. The community is ready and privacy/user coins + decentralized exchanges will be the death of the taxman, the USD, and eventually the downright evil government/banking establishment
Hunter Ortiz
totally agree OP
fuck ripple
Kevin Wilson
>user coins >decentralized exchanges this is largely a meme and won't matter for shit if they impose strict laws that make it damn near impossible to use crypto in the real world and cashing out, which they easily can
Hunter Peterson
1. Fuck you, it's not about your principles, it's about acquire capital. Thus, XRP. +800% in a month, thank you very much.
2a. I have bank accounts in 4 countries from living there. I recently left Canada for Europe for Christmas. Nobody looked at my passport before I left, no government recorded me on arrival. Nobody knows what fucking country I'm in at a given time, let alone who is resident where.
2b. If you are an individual of a few countries, you undoubtedly have a few bank accounts set up. This means tax free savings accounts in each country. Maximise.
Evan Nguyen
thanks! I dont have much more to add but I know some others have tricks for cashing out smaller sums like bitflur or whatever it was called. Let's see if we get some knowledgeable posters who can share more info
maybe you are right, but let's hope all the DEXes and infrastructure will be ready by that time
Jeremiah Gutierrez
They cant. Crypto and tech adoption is too fast for them to keep up. They cant prevent real world use either considering everyone has a computer and a smartphone which is all that people will need to use crypto.
And crypto devs are already prepared for work arounds if laws are passed that require manufacturers to make stopgaps in their devices. There will be backdoors that crypto devs will hack. It's over bro.
People underestimated crypto in 2009, 2010 etc.YOU ARE STILL UNDERESTIMATING Crypto now. You dont get it. Nothing lasts forever including the banking establishment.
It's over. They are gonna lose. The tech nerds got this in the bag.
Ian Nguyen
You are fucking stupid and you don't seem to understand I word I just wrote there. Whatever, enjoy your fines/prison. Not my problem. You contribute nothing to this thread kys
Dylan Wright
thanks
Dylan Watson
Thanks OP and FUCK JEWRIPPLE CRIPPLE
Brody Moore
Important corrections from my end:
>Portugal Apparently crypto is 100% tax free as of a few weeks ago for both investment and trading, this was confirmed by the minister of economy as well as their local tax authority. Note that this is largely due to a legal vacuum that can be filled at any moment.
>Netherlands The NL has what's known as box 3. This means you do not pay CGT or income tax on trading (unless you're a certified professional which rarely happens), but you do have to pay roughly 1.2% wealth tax on your holdings as of Jan 1st each year. i.e take the total EUR value of all of your bags as stated on CMC on Jan 1st, apply a ~1.2% on those and that's your wealth tax for that year.
Elijah Bennett
So I am a dual canada / European citizen
Can I become a non tax resident of both? Let's say I move every 3 months, how does that work? Do I pay tax to nobody? I have no permanent residence and just travel around?
Ryder Thompson
Thanks user good info, much appreciated.
Luke Ward
Thanks for the additions, I researched these as well.
>Netherlands Referring to this article grantthornton.nl/en/insights-en/articles/bitcoin-hits-10000-dollar-what-about-cryptocurrency-and-taxes/ >An interesting question would be how cryptocurrencies would be taxed in the personal income tax in case someone actively trades in cryptocurrencies. The tax-authorities could say that this goes beyond passive management of funds, meaning your profits would be taxed in box 1 instead of box 3. The facts and circumstances of a situation would be of great importance in such cases. I had to make the conclusion that it seems a bit risky if you trade with large sums/don't have a day job etc
>Portugal Do you have any definitive source on this that comes from a tax authority/tax advisory firm?
>But the situation turns out to be unclear and the investor reveals some concerns. "How does one conclude whether it is an investment or a professional activity?"
It seems pretty unclear/risky at this point for traders too
Michael Gray
Hey, neither Canada or Europe taxes based on citizenship, so you would only be liable for taxes based on where you currently live/have the center of your "vital interests"
what you need to do is just get tax non-residency from your current country of residence (where you live and pay taxes right now)
Luis Bell
OP - Im living in the USA. I don't have more than 15k in crypto...if I don't ever cash out, how or why would I pay taxes on something that I never converted back to Fiat? It seems the IRS JUST came up with some basic guidelines for this but still is very new. Also, this is some scary shit too.. fortune.com/2017/11/29/irs-coinbase/
Brayden Baker
we need this in a screenshot.
Thank you op.
post address for tips?
Joshua Thompson
This is tricky, but I think you would be perfectly safe trading on a foreign exchange like binance. Paying taxes on every crypto-crypto trade must be the stupidest law ever made.
In any case, 15k is too little for them to waste resources on (I think at least)
David Bennett
If you want to give tips, here is a eth address
0x231068eb72a4C0da0349A0fDB2568fb48c97C693
thanks
Benjamin Butler
So can I open a Swiss bank account, or Portuguese or nl, cash out x million to it, and then live in Asia and pay 0 tax(because Asian country isn't going to claim I am a tax resident)? Is that correct?
Brayden Bailey
found the thread talking more about bitflur and other ways to cash small sums out Nope, because more than likely some country (the one you are living in now) will claim you are tax resident there unless you are tax resident somewhere else.
If you move to Asia, most countries there you will become tax resident by staying there for 180+days in a tax year
There is something called the Perpetual Traveller theory, meaning you never settle in a country for long enough to be tax resident there, but it is questionable whether this would work in real life. You need to contact a tax advisor because this very much depends on the law in your country.
Samuel Harris
Thanks for this just what I needed.
Jeremiah Watson
bump
Mason Walker
can't let this thread die already
Kevin Martin
This time next year everyone will be trading on komodo barterdex.
Ethan Russell
Some more info on citizenship by investment programs for US citizens who want to renounce citizenship --> you need a new citizenship first before you can do that
Seriously, good thread OP. Extremely valuable information, it's nice seeing actual quality posts in the sea of shit.
Nathaniel Martin
Solid information OP, appreciated.
Any information for UK citizens? Does it just come under CGT?
Ryan Robinson
cryptotax.uk/guide/ really useful guide. unfortunately if you've made more than a few trades, its the same stupid bullshit of figuring out each price every trade as the americans have to go through. basically impossible and I'm not even a day trader. taxation truly is theft. looks like belarus is the place to go.
