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Bitcoin & Cryptocurrency Taxes in 2019



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Although cryptocurrencies are not controlled by any government or bank, the same cannot be said about crypto-related financial operations. Whether we like it or not, the number of countries introducing taxes on crypto profit is growing, so our expenses are not limited by just the transaction fees. Today we discuss the size of Bitcoin & cryptocurrency taxes, and when those have to be paid.

Legal and Tax definition of cryptocurrency

The legal status of cryptocurrency varies from country to country. While some of them ban mining and operations with cryptocurrency, equaling them to crime, others do not impose taxes and do not consider crypto to be personal financial assets at all. 

As a rule, crypto assets are generally treated as either a good or an investment asset and are subject to the relevant legislation for tax purposes. Sometimes Bitcoins are recognized as a unit of account (e.g. in Germany), in other countries (e.g. in Japan) Bitcoin is a legal tender with purchase tax. In other countries (e.g. China), Bitcoin transactions are prohibited for banks but allowed for individuals. China is the leader in mining due to it having the largest production capacity.

In Switzerland, cryptocurrencies are subject to the same rules as foreign currencies, and this country has one of the most favorable jurisdictions for Bitcoin start-ups and public blockchains. There are no restrictions on the use of Bitcoins in Russia right now, but the government does have plans to introduce some future legal regulations.

In a number of countries, such as France and India, governments have not yet made a formal decision on the regulation of cryptocurrencies. While they are still thinking about which side to take, they warn potential users about high risks of investing in crypto due to its high volatility.

Tax Software for Cryptocurrency

Figuring out crypto taxes is one of the most distressing parts of being a crypto trader. It takes boatloads of time to provide details for your crypto taxes, as you need to report the number of coins you have, the number of exchanges you’ve done, and the trading platforms you use. Every one of your exchanges should be recorded, making it a very tedious procedure. 

Luckily, you can simplify the process with the help of crypto task software. The most popular solutions include the following.


TokenTax is probably the simplest way to report your cryptographic money operations and income taxes. Rated by Forbes as the best platform for documenting digital money taxes, TokenTax is the only crypto tax platform that supports all the major exchange websites. This software has a direct connection with every one of the exchange platforms to deliver automatic reposts. If an exchange does not allow data import, you can transfer a record with your exchange information to TokenTax.

TokenTax platform.png
Token Tax dashboard

When your data is transferred, TokenTax will generate the forms: all you need is to fill them out and file. Those incorporate forms 8949, TurboTax, FBAR, FATCA, and some other documents you may require. 


BearTax imports your exchange information utilizing connections with more than 25 popular exchanges to define your gains and provides the records for you to document your expenses. 

The BearTax has various helpful features. The UI is clean and straightforward. Their matching feature coordinates your withdrawals and deposits over their exchanges.  With this tool, the tax reports become error-free. 

The platform is compatible with both decentralized and centralized platforms, but if an exchange you work with does not import data, you can simply submit it in CVS format.

BearTax interface enables digital currency traders to ascertain their gains and loss quickly. Their basic interface makes it simple to import your exchange data and ensure that you’re not overpaying on your taxes. 

Their software now supports Coinbase, Bittrex, Gemini, Binance, and Poloniex. CryptoTrader will compute your tax duties implementing a similar first-in-first-out technique that’s utilized by CPAs and tax experts. 

Also, CryptoTrader makes a so-called audit trail that records all calculations used in the tax filing. This report incorporates a salary report, short and long sales chart, closing positions report, and so on.


Aside from the above-mentioned platforms, you can try CoinTracker or ZenLedger.

Tax Rules for Crypto In Different Countries

Crypto tax regulation differs from one region to another. 

#1. Internal Revenue Service, USA

Bitcoin is considered “virtual currency” in the official World Bank and FBI reports. Bitcoin is classified as “decentralized virtual currency” by the U.S. Treasury Department’s Financial Crimes Commission.

In March 2013, FinCEN announced that the exchange of any cryptocurrencies for fiat money should be regulated in the same way as the fiat to fiat exchange (e.g., dollars for euros). In November 2013, the U.S. Senate held a hearing on Bitcoin, during which it was decided not to ban the circulation of cryptocurrencies, but to work to regulate the business.

In August 2013, a Texas Eastern District judge decided that since Bitcoins can be used as money to pay for goods or exchanged for common currencies such as the U.S. dollar, euro, yen or yuan, Bitcoin is a currency or a form of money.

On March 25, 2014, the U.S. Internal Revenue Service released a guide to the taxation of Bitcoins and other virtual currencies. For federal tax purposes, Bitcoins are considered property, i.e., those who purchase Bitcoins as an investment instrument, selling Bitcoins will generate “capital gains” rather than “foreign exchange gains”. Bitcoins are taxed. High volatility of the Bitcoin exchange rate can lead to tax liabilities for those who use Bitcoin to pay for goods and services (in particular, the obligation to pay tax on capital gains).

In the fall of 2017, the U.S. Securities and Exchange Commission (SEC) opened its first case involving the fraud with an ICO.

The Internal Revenue Service has recently published tax guidance that states that cryptocurrency should be taxed according to the same rules as any other property or capital gains. Cryptocurrency is also money, even though in a digital format only. According to the IRS, if you gain some cryptocurrency via airdrop or hard fork, you must pay tax on it (even if you did not ask for that asset transfer).

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IRS regulations & tax rules

#2. United Kingdom, Canada, Australia

HMRC (Her Majesty’s Revenue and Customs) believes that only in exceptional circumstances can cryptocurrency buying/selling activities be called financial trading. In this case, the profit tax will have priority over the capital gains tax. The UK income tax rate is floating, i.e. it varies depending on the person’s income and varies from 0% to 45% depending on the sum of gains.

Most often, individuals are allowed to hold crypto assets as personal investments. In this case, they will be required to pay capital gains tax. The rate of capital gains tax in the UK also varies depending on the taxable amount and ranges from 10% to 28%.

In Canada, cryptocurrency profit is also taxed, but citizens need to pay taxes only for 50% of their gains. Suppose you purchased some crypto coins for $1,000 and sold them later for $3,000. You would need to report a capital increase of $1,000 (half of $2,000) which would be added to your income and taxed at the marginal tax rate. 

In Australia, operations involving Bitcoins and other cryptocurrencies are equaled to barter agreements. For tax purposes, Bitcoin is treated as an asset rather than a means of payment or foreign currency.

Companies conducting transactions in Bitcoin are required to document, record and date transactions accordingly. Companies that receive Bitcoin as payment should report its value in Australian dollars and it will be treated as ordinary income.

On the other hand, transactions with Bitcoin for personal use are exempt from taxation in the following cases:

  • When Bitcoin is used as payment for goods and services for personal use;
  • When the transaction value does not exceed $10,000 AUD.

Bitcoin mining and exchanges for commercial purposes in Australia are considered to be exchange trading and are subject to appropriate taxes.

#3. China & Hong Kong

On December 5, 2013, the People’s Bank of China banned Chinese financial companies from conducting operations with Bitcoins. At the same time, individuals can freely participate in Internet transactions at their own risk. Cryptocurrencies are treated as a commodity, but not as cash.

In Hong Kong, crypto exchanges are not banned – Chinese crypto traders often use Hong Kong platforms to cash out their digital assets.

#4. European countries

On 22 October 2015, the European Court of Justice stated that Bitcoin exchange operations for fiat currencies are exempt from VAT. The court decision specifies that the VAT law applies to the supply of goods and services. Transactions in Bitcoins have been classified as payment transactions in currencies, coins, and banknotes, and therefore are not subject to VAT. The Court recommended that all EU member states exclude cryptocurrencies from the list of assets subject to taxation

#5. India

In April 2018, the Reserve Bank of India practically destroyed the country’s cryptocurrency industry by forcing all banks in the country to cease doing business with the cryptocurrency exchanges. However, later they changed the laws and made the following proposals:

  • The purchase or sale of cryptocurrency will be considered a service.
  • The value of the cryptocurrency can be determined on the basis of the transaction value in rupees or the equivalent in any freely convertible foreign currency.
  • If buyers and sellers are in India, the transaction will be considered as software delivery.
  • Transactions outside Indian territory will be subject to integrated GST (good and services tax) and will be treated as imports or exports of goods. 
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#6. Switzerland

In Switzerland, cryptocurrency operations are not taxed, though the government plans to introduce control over the crypto operations. In the nearest future, the following regulations may be introduced:

Cryptocurrencies will be considered as valuable property, so the fact of their possession should be reflected in the tax return, and their value should be taxed;

If the virtual coins are qualified as private property (i.e. they are not used for business purposes), then, in accordance with the current tax legislation, only the profit from the growing price is taxed. 

Taxation of mining of Bitcoin and other coins is either corporate (profit tax) for legal entities, or in an income tax for individuals.

#7. Russia

On August 28, 2017, the Russian Ministry of Finance proposed that cryptocurrency should be considered a financial asset, but be regulated as “other property”. At the same time, the Ministry believes that the purchase and sale of Bitcoins should only be performed by ‘qualified traders’. 

The Bank of Russia is against legalizing of cryptocurrencies. They are against private money, no matter its form – material or virtual. Cryptocurrencies are viewed as private digital money that must be subject to taxes.

Cryptocurrency Tax Free Countries

Currently, there are 7 countries where you don’t have to pay taxes for your cryptocurrency earnings:

  • Switzerland;
  • Singapore;
  • Belarus;
  • Malta;
  • Portugal;
  • Germany;
  • Malaysia. 

Crypto Tax Calculator

You can easily figure out the cryptocurrency taxes using such online calculators as Crypto Tax Calculator, CoinTracker, Koinly, and many other similar services. 

Bottom Line

Unfortunately, the vast majority of countries are aiming to control cryptocurrencies: they realize that crypto-assets pose a threat to traditional fiat currencies and the global financial system. However, the process of legalization will take many more years, so, for now, we can enjoy relative financial freedom from taxes. In most cases, regular Bitcoin users performing transactions with minor sums are not obliged to pay any taxes at all.

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Crypto exchange BTCNEXT seeking Japan license



BTCNEXT, an Asian based cryptocurrency exchange, earlier this month announced it received notification from the Japan Financial Services Agency (FSA) that it must suspend services for Japanese residents.

As part of Noah Ark Technologies Ltd., BTCNEXT operates with a Virtual Currency Exchange license issued by the Cagayan special economic zone and Freeport Philippines.

The BTCNEXT team says that its legal department is currently working with the FSA in regards to getting a Japanese license and will take necessary steps to ensure full compliance with all FSA requests.

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NEO Price Prediction: Long-term (NEO) Value Forecast – June 2



  • The long-term outlook is in a bullish trend.
  • The 1.618 in the fibs at $19.17 is the bulls target in the long-term.

NEO/USD Long-term Trend: Bullish

Supply zone: $20.00, $30.00, $40.00
Demand zone: $2.00, $1.00, $0.50

NEO continues in the uptrend in its long-term outlook. The strong pressure on the cryptocurrency by the bulls’ comeback at the 61.8 on 18th May has kept price up with new high each week. $12.59 and $15.04 in the supply area were the highs on 20th and 30th May respectively.

The new week is started on a bullish note with today’s opening candle at $13.72 higher than last week opening price at $11.45, an indication that the bulls are more in the market.

Price is above the two EMAs that are fanned apart which suggest strength in the trend and in this case the uptrend.

The journey to 1.618 of the fib extension with price at $19.17 in the supply area is the bulls target in the long-term as the bullish momentum increase and more bullish candle open and closed above the two EMAS.

The views and opinion as expressed here do not reflect that of and do not constitute financial advice. Always do your own research.

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Why Bitcoin’s ‘Culture War’ Matters



Michael J. Casey is the chairman of CoinDesk’s advisory board and a senior advisor for blockchain research at MIT’s Digital Currency Initiative.

Let’s talk about bitcoin, toxicity and inclusiveness.

(Boy, my Twitter feed is going to have fun over the next few days.)

To start with, let me take a position: I stand with those people, especially women, who’ve lately been calling out maltreatment from members of the bitcoin community and citing rude and abusive behavior as proof of that community’s lack of inclusiveness. These are people who believe in cryptocurrency technology’s potential but feel discouraged to believe that they belong to the community’s dominant white-male subculture. If this technology is to fulfill its global potential, the community associated with it must confront this problem.

But the real point of this column is not to just defend these critics. It’s to debunk one of the more common positions adopted by those who take issue with their complaints, particularly on Twitter. In doing so, I hope to emphasize just how important the concepts of “community” and “culture” are to the healthy development of crypto technology and the ecosystem growing around it.

Hammer culture?

The line that’s most often thrown back at those calling out incivility is that bitcoin is nothing more than a technology, a tool, and that it’s meaningless to attach to it value judgments relating to human behavior. Bitcoin is amoral, apolitical and a-cultural, the argument goes, and like any technology it is used by good and bad people alike.

These pundits, warning of a political correctness-based threat to free speech, will then advise the injured party to take issue directly with the bad actors but refrain from agitating for community-wide change.

A perfect example of the genre came from outspoken lawyer Preston Byrne.

Clever, yes. But it’s extremely unhelpful, because the examples given do not share equivalent terms of reference.

Byrne’s “hammer” refers solely to the steel implement that tradesmen use. By contrast, people complaining about “bitcoin” are clearly using the word in a much wider context than in merely a reference to the code, to the ones and zeros that comprise the bitcoin protocol. They are inherently talking about the wider ecosystem and community gathered around the idea of bitcoin.

So, let’s equalize the terms, shall we? We can turn each of these nouns into a modifier of the word “community.”

While it might sound silly to talk about a “hammer community,” there may well be groups of hammer-obsessed souls who debate questions of design and ease of use at meetups and in chat rooms. If so, I’m going to guess that that community would probably also be predominantly male.

But the real issue is that such a hammer community is going to be far less important to the future design and evolution of hammer technology than bitcoin’s community is to its. I’m no expert, but I don’t see a great deal of change in hammer technology having occurred over the centuries and I’m not sure people expect much in the future. As such, we don’t see much jockeying among users to ensure that proposals for hammer upgrades are implemented and standardized to their preferred design.

By contrast, the open-source technology behind bitcoin is in a constant state of evolution. It is, by definition, under development, which is why we talk about the engineers who work on it as “developers,” not “custodians.” As such, there is a constant battle of interests over who gets to modify the code. Exhibit A: the block-size debate.

Counter-arguing that those who don’t like the process can just fork the code, as the large-blockers did, and set up their own new community, doesn’t cut it for me. Bitcoin is the brand that matters. Any newcomer will struggle to achieve the same network effects. Secession just isn’t viable for anyone who likes its current design but doesn’t like how its future is being defined.

Also, is there a “hammer ecosystem?” Maybe. But beyond producers of nails, and perhaps steel and rubber or wood suppliers, you can hardly call it a complex ecosystem.

Bitcoin, by contrast, which purports to reinvent the global system of money, has attracted an inherently vast array of different technology providers, all of whom have competing interests in how it is designed, managed and marketed to the world. I’m not just talking about businesses applications built on top of it, but also the developers of related encryption, payment channel, smart contract and other vitally important technologies, all of which are themselves in a constant state of flux.

(I’m guessing that the exhibition halls at hammer conventions don’t have quite the same spread of offerings as cryptocurrency events such as Consensus.)

Saying that bitcoin is nothing but a tool, is like saying that music is nothing but a system for ordering different audible tones.

Money = community

When Paul Vigna and I wrote The Age of Cryptocurrency, we spent a lot of time chronicling the emergence of the community that had formed around bitcoin, which we saw as fundamental to its success. It struck us that the notion of a bitcoin community was so prominent — the “c” word was always being bandied about — because bitcoin embodied a profound and sweeping social idea. It offered nothing less than a reinvention of money, a revolution in the entire system for coordinating human value exchange.

Money only works to the extent that there is widespread belief in it, that people buy into its core myth. Money, Felix Martin says, is a social technology, by which he means that its functionality and usability depend far less on the physical qualities of the token that represents it than on the collective agreement among large communities of people that their token captures, represents and communicates transferable value. This is true whether we’re talking about gold, dollar bills, entries in a bank account, or cryptocurrency.

By extension, then, for any form of money to succeed, it must sustain a vibrant, growing community.

Communities = culture

The thing about communities is that they inevitably develop cultures. In self-defining their boundaries of belonging, they develop shared ways of seeing and language — akin to a kind of social protocol – that regulate (in a very unofficial, and quite subconscious way) their members’ behavior.

As they evolve, cultures can become more or less open, more or less inclusive, more or less abrasive in their treatment of outsiders. And inevitably, these cultural features will either encourage or impede the growth of the community.

All this should hardly be a revelation. Anthropology, the study of culture, is a globally widespread and influential field (one that is now appropriately turning its attention to cryptocurrency communities.)

Studies of U.S. culture, from Alexis de Tocqueville down, have rightly pointed to the inclusiveness of the founding fathers’ ideas as a key driver of its economic expansion. In fact, American culture is arguably its most important ingredient for success, a social manifestation of Joseph Nye’s notion of the United States’ “soft power.”

So, yes, bitcoin culture really, really matters. If the compelling ideas behind permissionless, peer-to-peer exchange and censorship-resistant money that attract people of all stripes to it are to retain those people’s interest and grow in influence, the bitcoin community needs to evolve a more inclusive culture.

The only way to do that is to spur the kind of open debates that have always driven the progress of human culture — those which shifted norms and mores to the point that it became unacceptable to own slaves, to spit in public, or to jump a queue.

So, listen up, bitcoin. It’s time to confront your toxicity.

Hazard drums image via Shutterstock

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Holiday Spending up 14.6% as E-Commerce Beats Brick-and-Mortar



E-commerce sales hit record highs this year as Americans continue to move their holiday shopping online.

According to Mastercard’s SpendingPulse report, online retail grew 18.8% over last year’s holiday season. That’s enough to make online sales a record 14.6% of holiday shoppers total spend, the report says.

Online consumers this year spent 17% more on apparel, 8.8% more on jewelry, 10.7% more on electronics, and 6.9% more at department stores. 

Overall, holiday spending jumped 3.4% compared to 2018.

The strong numbers came in spite of 2019’s unusually short holiday season, commonly defined as the period between Thanksgiving and Christmas. Shoppers had six days fewer than they had in 2018.

Steve Sadove, an advisor for MasterCard, said in a press release that retailers adapted to the shortened season. 

“Due to a later than usual Thanksgiving holiday, we saw retailers offering omnichannel sales earlier in the season, meeting consumers’ demand for the best deals across all channels and devices.”

Interestingly – or ominously – retailers who accepted crypto or managed crypto payments were slow to respond when we asked them how their holiday shopping season went. eGifter, a gift card trading service, noted that it had not yet “crunched the numbers” on holiday sales but that “We saw growth in overall crypto sales,” said Bill Egan, the site’s VP of Marketing.

“We saw more gifting with crypto in 2019, compared to buy-for-self use cases in prior years,” he said.

Payment processor BitPay found the holidays quite inspiring as well.

“We saw twice our daily averages of processed volume leading up to the holiday,” said BitPay’s CMO, Bill Zielke.

It will be interesting to see what kind of statistics surface over the next few seasons as e-commerce becomes king and crypto payments come to the fore.

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Crypto Custodians Grapple With Germany’s New Rules



Crypto firms in Germany are getting ready to exist under a new regime. 

Under a law going into effect Jan. 1 requiring digital asset custodians to be licensed, each company that currently custodies crypto and targets German clients must announce to Germany’s Financial Supervisory Authority (BaFin) its intention to get a license before April 1 and submit an application before Nov. 1.  

A clause allows current crypto custodians to keep serving German customers without being penalized if they declare their intent to apply, but those same companies are waiting on BaFin to release final regulations around the law.

“As long as the legislation is not in place, BaFin is not going to think about how to cope or how to deal with the legislation,” said BaFin press officer Norbert Pieper. The regulator declined further comment and Germany’s Federal Ministry of Finance did not respond to request for comment by press time.

Pieper added: “There is no date foreseeable [yet] by which we’ll be able to communicate the results of our assessment. We will certainly communicate that on our website.” 

While the final regulations haven’t been set yet, the new license requirement may not produce the same kind of exodus of crypto firms that New York saw after the BitLicense requirement, said Miha Grčar, head of business development at Bitstamp.

London-based Bitstamp, one of Europe’s largest crypto exchanges, plans to continue operating in Germany but declined to say whether it would apply for a license, said Grčar. Crypto firms could also use a white-labeled custody service to operate in Germany. 

Because the law is an “updated version of the existing banking regulation,” banks will likely have the most to gain from it, Grčar added. Companies that get the license will be German financial institutions, but not classified as banks.

The law also means that German regulators now see crypto as a “legitimate” industry, he said. 

Ulli Spankowski, chief digital officer and managing director of the crypto custody subsidiary of German stock exchange Boerse Stuttgart, called Blocknox, sees the license as a step forward for “the professionalism of the industry.” The subsidiary has already advised BaFin that it plans to apply.  

“There are other countries that won’t go for a full-fledged license,” he said. “If you want to get traditional, established players from the banking side, you need to give them this environment to feel safe.” 

DLC group is taking advantage of the new regulatory framework by offering consulting services for firms interested in applying, and its own white-labeled crypto custody service. 

Sven Hildebrandt, head of Distributed Ledger Consulting Group, is concerned some exchanges won’t understand the nuances of the new law.

“The law is only in German and no English translation of the law is out there,” he said. “What’s going to happen to exchanges? [Operating without a licence] is actually a felony and not a misdemeanor so that’s jail time.”

Hildebrandt predicts the costs of licensing will be similar to other German financial services licenses where firms will need two managing directors, an established German entity and 125,000 euros of starting capital. He also estimates installation will cost 250,000 to 350,000 euros and recurring yearly costs will be 350,000 euros. 

Switzerland-based Crypto Storage AG, a subsidiary of Crypto Finance AG, is opening a branch in Germany to offer crypto custody to banks and then financial technology startups. 

“Large banking houses will do custody business in the future,” Stijn Vander Straeten, CEO of Crypto Storage AG, said. “They are moving slowly, though. We’ll build it up now for a premium.” 

Berlin-based solarisBank this month opened a subsidiary called solaris Digital Assets to offer crypto custody as a service. So far, the bank has a handful of customers testing the service with more than 40 companies in the pipeline, said Alexis Hamel, managing director of solaris Digital Assets.

In addition to waiting for details from BaFin, crypto firms are also waiting to see if the law can be passported to other European Union states. 

“Germany is definitely at the forefront with the clearer regulation,” Hamel said. “We still need to see how other European countries level up.”

Disclosure Read More

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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