Hey, has anyone actually thought about how to dodge taxes in their home country? Or maybe pay lower taxes elsewhere? I'm not trying to pull a fast one on my country. But just think about it, living in a place like mine where every crypto exchange hits you with taxes. Like, when you swap BTC for ETH, you get slapped with a 20% tax. Makes no sense, right? Why should I pay tax on all that when I only gain profit when selling crypto for cash?
This whole mess is mainly because governments don’t get how crypto works and I’m not keen on footing the bill for their ignorance.
Remember that the fees on the exchanges are different from the VAT that you are paying for in your country.
If I were your place, I will pay tax and that's not a problem because that is a small amount that you contribute to the economic growth than you abide by the law by not paying tax in your country, and might the circumstances vary.
Luckily, I'm a part of the tax-free country and our citizens here that used cryptocurrency are no obligation to pay income tax when exchanging crypto for fiat. So, our government can't force anyone not to have to pay the value-added tax (VAT).
Can you state above which country you are? And if you don't mind, I think this is not an appropriate board just mo to Legal board.
Heres what happens if you dont pay your taxes.
Such bullshit
What the VAT has to do with what @OP is talking about? He didn't mention it. We do not care about your VAT.
"If I was in your place"... But you're not.
"That's a small amount." How fo you even know if @OP is paying a small amount. Small amount+small amount+... = Big money!
Taxed by 20% and you call this a small amount? Are you here just to troll or what? I truly believe you never paid any income tax in your life.
Goin to jail for not paying taxes? Hold on... you said it's just a small amount... do you think people go to jail for small amounts?
Clearly no idea what the dude was talking about
What the hell tell them that you have Bitcoin, Do not be an idiot
you can buy Bitcoin using anonymization conversion platforms, hide them and trade with them and then pay the tax once when you want to withdraw your profits, it is much less than that you send all the file that contains all the buying and selling operations to the platform.
Your continued payment of a 20% tax on all the profits you make for each sale or purchase will make you win a little.
Exactly, in the end, it is a big amount of money and this could be one of the reasons why cryptocurrencies are not widely used. Because when you pay for example for coffee, then you have to also pay additional tax because you are actually exchanging crypto into fiat and then buying a coffee for a price with VAT (another tax) included.
Don't worry I know what you mean, in my country cryptos gains are taxed by 30% maybe (if I'm correct) That's insane. I agree to be taxed but 30%?.
To answer the question, instead to look for a tax-free country you should look for a P2P place to deal with people.
The idea is, instead to receive bank transfers from an exchange it's better to receive from random individuals: by logic when you receive a bank transfer from an exchange it's easy to guess you sold some coins for some cash. While with individuals, you can always say you sold your underwear or something else.
It's a lot easier to stay under the radar this way. Think about Paypal too, in my country under 10k per year and you're fine.
Thank you for your valuable idea. But, I have heard about specialized companies that focus on the study of blockchain transactions. They can interconnect your ID with one of your wallets, aren´t you afraid that in the future they will be even more advanced and one day they will reveal all transactions? When you send your coins for example from Binance to one of your addresses, it is obvious that it is probably yours and from this point you are trapped, or?
It depends on how you earn your cryptos and what exchange you use but like it was suggested above. Just use p2p exchanges like local cryptos. I can't imagine paying a 20% tax for every exchange i make between BTC and ETH. That's a ridiculous amount to pay and honestly i would also try as much as possible to dodge such a tax.
If I were you, I would get Fresh bitcoin or ETH addresses that have no connection to my past bank accounts, deposit cyptoassets that i want to exchange for fiat in them, if possible i would even use mixers(the fee you pay is way lower than that tax) and then use P2P exchanges. There is also a currency exchange section in this forum where you can carry out trade with other members.
I'll be damned if I ever will report gains on my coins for taxes. Screw that noise. I figure there's enough ways to dance around it. Use Bitcoin ATMs to withdraw to cash if you don't mind paying the fee. Withdraw in small amounts over time. Send it to someone else's bank account with a lame story and have them give you the cash for a small fee.
If you have a lot, pay some local dumbass to set up a bank account that only you can control, and withdraw through that and hit the road.
As recently as 2014, the IRS really didn't know how to handle coin profits, it was a free for all. Too bad I didn't have a lot more coins then.
Sell your bitcoins to a person you know that looking to buy it. If you have friend that's is also bitcoin investors that looking for it try to offer your bitcoin and sell it to them . In that case you will never need the use of exchange or use other p2p option that can use to convert your bitcoin into cash without using exchange that is the only option you can try now.
I know that many countries make you pay taxes for the profit on crypto. That's when you convert into fiat, as you said. But taxes at conversion crypto to crypto? That's insanely stupid.
But for crypto-to-crypto there are still exchanges where you don't need KYC under certain daily amounts, find some reputable ones for that (Binance can be an option).
And of course, there are the decentralized exchanges, DEXes, which are P2P, but I don't have enough experience on those to tell more.
Thank you everyone for nice tips. I am not going to sell my cryptocurrencies, I believe in Bitcoin more than in the current financial system. But it is a kind of philosophical question about the future and how to legalize my Bitcoins, respectively pay fewer taxes in the end. Because some of my Bitcoins I earned from bounty campaigns (respectively earned ICO tokens then I exchanged them into BTC - and I should pay taxes at this point, I pray that it would be enough, when one day I come to financial authority, that I sold my Bitcoins and here is your 20% tax).
There is a legal path which allows for this.
It is defined by renouncing citizenship with whatever nation demands exorbitantly high taxes.
There has been a significant uptrend in this practice as of the economic crisis of 2008. Many are abandoning citizenship of their nation of birth and taking up residence in low taxation nations with a lower overall cost of living. One segment of the demographic is known as "digital nomads". They could define part of the reason why countries like the philippine opt for 0% cryptocurrency taxes, in the hope of luring citizenship rescinders and their capital holdings into dwelling inside their borders. The same could be said of vanuatu et al.
Awesome idea, about that I haven´t heard any time before. But the question is what everything you loose when you renounce your citizenship and continue living in the country. But, wait, I have different citizenship, but I pay taxes where I work - in which country I receive salaries. So that would mean that I have to move into the Philippines?
Why do not you trade without the need to prove your identity and withdraw currencies in the form of products or devices? Suppose, that taxes on profits are about 30%. How much are taxes on the purchase of phones, PCs, and equipment? I think it's cheaper than a tax on capital.
You can sell these devices and phones at a price difference of 1% or less and thus make a profit without paying more taxes.
Buy 1 BTC --> start Binance trading (without KYC) ---> make 0.4BTC profits ---> buy devices with 1.4BTC ---> selling it with 1.39BTC
There are also some countries that do not need to pay taxes for converting cryptocurrencies. But you are living in your country, you have to accept the conditions there. I myself had to accept paying the charges I did not want. When I receive my coin then I want to exchange it for cash to spend it I have to pay. But that's the only way I have money to spend if I leave a coin I can't use in my daily life.
What? btc to eth conversion with 20% tax? OMG this is insane what country is that thats too much if you convert 10k usd worth btc to eth then you have to pay 2k usd for tax?
I'm not sure there is a way to do it, unless you know and trust someone in THAT taxless or tax-less country.
However, there might be alternatives for you;
If your country supports Revolut and if it's available for you there, you can easily sell your crypto on Coinbase and then SEPA transfer your funds to Revolut account. I believe fees are something along the range of maybe 1-2% and you can then spend your money using Revolut by either paying for stuff, or withdrawing at an ATM.
The other option, again if available where you live, might be Crypto.com card. It functions same as Revolut, but it has an advantage that you can exchange crypto to fiat directly in Crypto.com app.
EDIT: One thing i forgot, KYC is mandatory for these 2 options i listed, keep that in mind
Avoiding tax isn't illegal, you have lot of way to convert your money into fiat in your country itself and you don't have to pay 20% tax all the transfers.Peer to peer trading can help you to deal with converting fiat. Or you can buy something with cryptos and then later sell it on amazon or any e-commerce site to make it legal money with less tax.