tax implications for crypto in two countries

I'm based in Europe, and my wife is from Latin America. She's been living and working with me in Europe for about two years now, paying her taxes here. The thing is, she hasn’t informed her home country that she’s no longer a tax resident there. She’s not worried about it since she doesn't earn any income there, so no tax bills for her. Plus, we have a tax treaty between our countries that prevents double taxation. This means her home country can’t hit her with a tax bill for income that's already been taxed in my country. In my country, taxes on crypto profits are either 33% or 50%, depending on how much you're cashing out. But there’s a tax-free threshold for profits up to €10,000 per year, which is nice. So I’m planning to cash out a small amount of my altcoins below that limit in my name, tax-free. Her home country has a flat 15% tax on any profits over $6,000 a month. It's a bit murky what happens if she were to withdraw $10,000 in November and nothing the rest of the year. But honestly, their tax situation seems way better than what we have in Europe if you have a good amount of cash. To dodge the heavy crypto taxes here, I'm thinking of transferring half of my crypto portfolio to her. I might set her up with a Binance account and move some of my crypto into it. Then she could cash out later this year. If her Binance account is linked to her Latin American bank card, do you think only the tax agencies from her country will get notified about her crypto transactions on Binance? I just can't see how a European tax agent would track her down on Binance if it’s tied to a Latin American card.

I feel you should talk to a tax specialist. Someone who knows the know around taxes and understands how it works in your case. They will have the best advice for you. As for the people here, they can do so little. Best wishes.

From the look of things, aside from your misunderstanding of tax regimes in both countries this make you to make so much assumptions and speculations and also is hard for us to give you advice on this since whatever we are going to advice will be based on what is uptainable in our own countries. Just as the first comment suggested trey talk to a tax consultancy firm, to get a better explained tax laws as regard to cryptocurrency profits and income.

Not paying tax or trying to bypass paying of tax is a grieve offense to the both regions you mentioned you are both from. To avoid any form of penalty for not doing the right thing just by not getting the best information and guide about it, it would be better you contact someone who is a specialist in that field or knows how taxation works in both countries. This will make you be free of any doubt on whether you’ve violated a rule on taxation or not. I almost got confused while trying to grasp what you’re explaining in your post. Contact a specialist in that field for your own good.

Your wife is paying taxes in Europe already, which makes her a European tax resident, so she needs to report any taxable income to European tax agencies which is irrespective of whether she used another country's bank account for cashing out the profits. So if you are intend to sell before 2030 then it should be reported and make sure it is under the tax exception limit. But you may also need to be aware of gift tax when you transfer assets to your spouse, which differs from one to another countries even in EU, but there are also exempted limits which vary a lot. But if you transfer it as gift if you want to avoid any legal complication,s because your wife can't sell something for $10,000 if she can't provide a source of funds, and that came as a gift from you means you can't avoid the gift tax if there is any. And Binance reports to EU agencies if it used an EU identity to create an account, and if I am wrong, Binance got a separate one for EU regulations, just like Binance US? So you can't use Binance EU as a Latin American! To get the actual legal ways to avoid taxes, it's better to consult a Tax advisor who has experience with crypto gains.

This issue is very technical and not someone can easily advise you unless the person have been in your situation and was able to pull through. Your best option is to talk to a tax specialist for direction on this. This will save you lots of stress and and possible troubles. Taxation is one thing you cannot afford to have problem in, so seek the services of professionals.

I would agree with others, best to leave it up to professionals. If it's something simple, self-help resources would typically be enough, but if it becomes complex, best shot is a consultation with a professional. In this way you're errr-ing on the side of caution. I wouldn't wanna mess with my taxes especially if my country dogs could clamp down hard. I would suggest those firms/professionals with crypto focus and/or experience thouugh. Perhaps you can find your guy in this list, see: https://koinly.io/crypto-accountants/

That is right that not paying taxes or trying to avoid them is serious offense in any country and it is always best to get accurate advice to prevent penalties. Tax rules are very complicated and different everywhere so we should contact tax expert who knows about laws in both countries where OP is dealing with. This will help OP to understand responsibilities and if OP following all rules and so this give peace of mind and save from trouble and potential fines in long run.

Binance transmits tax information exclusively to those countries that participate in the CRS. If, when registering on Binance, her profile is verified as a Latin American citizen and a Latin American bank card is linked, this will be the basis for submitting tax information only to the tax authorities of that country. But it should also be understood that if Binance receives a request from the government authorities of any country, it will provide such information on demand.

Just because she didn't earn in her country, it doesn't mean she's correct to not declare to tax authority if she no longer a tax resident there. That's wrong, I don't know your wife nationally, but ask her to google about tax for people who work abroad. How do you bought your coins? if you bought using Binance or any other CEX, the tax agent would find you because you need to report gift tax.

Theoretically, the country where the bank account is located will tax it. So in her case, if it's a bank in LATAM, she will have to pay the tax once fiat lands in her bank account. Now, this is all practical theory, you should check with a tax specialist as well. But i believe this is the case in this matter

IMO you are right, but what if the crypto assets have also generated some profits while under his name in the European exchange account? would Europe not want to task the profits you got while it was sitting in his own wallet. These things are very technical and complicated and as others suggested, I would advise he seeks the opinion of an expert before proceeding so that he is not eventually double taxed.

Always with the running away from taxation lol… a 33% or 50% on profit is a little steep you know. Almost feel as though you shared everything all because of a policy! I understand why you would prefer a 15% and quite frankly, everyone would but, after having to make this withdrawal in your wife’s Latin American account and it gets taxed there, wouldn’t you have need of it in Europe? Wouldn’t it be taxed there with whatever rate that applies to income tax, or course they wouldn’t classify it to be of crypto origin then or you really want to leave it be in your wife’s account till 2030. If that be the case, then it would be a little unwise to withdraw from your Bitcoin portfolio. Altcoin, maybe but not Bitcoin as these would count towards your hodlings with a halving and possible bullrun accompanied with an ATH to come.

This is what the exchanges do, once you're signing up for opening your account with them, they subject you to KYC at first then later asked you to provide your information like mobile and contact address or a means of identification, all these are what they make use in knowing your regions after checking your ip address form their technical support team, so they already know your country of resident, however for the purpose of migration, the ip address of course will have to change and they will also detect for it, i don't think two tax confirmation would be required, though all these may be subjected to their policies on which of the countries should bill the tax.

There is your problem and your solution. Just get it over with and complete this process. Then when you return to Latin America become a tax resident again. Ignore all the posters that may say otherwise, they don't understand how deep the KYC network is. Despite how you used Binance for her, the KYC network knows who her husband is and where she is living now in most cases. Therefore, you are at risk of the other tax agency being informed. The risk is not high, but it is possible. You need to think also more generally. It is not that someone is going after you specifically, but there may be a general ask for information by the EU or a specific country to Binance and it will get you too.

Don't do what you will make you finally shoot yourself on your own feet because you want to play a smart one. Bypassing government tax is a big offensive and you should know the consequences of that especially when it involves crypto assets. Play safe by contacting a professional on tax for him to advice you on what to do just as other posters above have mentioned.

Gift taxes between partners are very low in my country. Like 1% or even exempt from taxes under a certain amount. So that is safe. With regards to tax residency.. In theory she is now a tax resident in my country (EU) because she lives here and works here. She came here 6 years ago and was a student. In all those years she was a tax resident in Brazil, even though she did not work there anymore. But in 2023 she became employed here in Europe. She automatically became a tax resident here and her taxes are automatically deducted from her monthly salary here. But in the mean time, she has not signed an official declaration of no longer being a tax resident in her homecountry. I recently read that citizens who are no longer tax residents there can either sign a permanent exit declaration, or a temporary one. We don't know which one applies, because we might move to Brazil in 5 years. We are not very worried about double taxation because there is a treaty against double taxation between our countries, and we can prove that she is already taxed here. But if she connects her Binance.com account to her Brazilian bank card, I don't see how Binance would inform European tax agencies. Because Binance only knows her nationality, not her tax residency. And technically she has also not given up tax residency in her homecountry. If Brazilian authorities demand taxes on her crypto transactions, we can prove to them that she lives in Europe and pays her taxes here. The treaty applies and therefore they can not tax her. Meanwhile we should report her crypto profits on Binance.com to European tax authorities, but I don't see how they would find out.

This is my intention. For now I don't have to do crazy things to get away with low tax or no tax. My country has a annual 10k euro tax exemption limit per person. So I just donate 10k to 4-5 close relatives, convert it to fiat tax free, reinvest etc. When the portfolio grows I will definitely need a tax lawyer. I have found a good one. He sets up foreign companies in countries with low taxes. Sadly it is the only way to legally avoid astronomical taxes on crypto earnings in my country. I don't see taxation on bitcoin profit as fair. I see it like a conversion fee of 50% when you convert a failing currency like the Argentinian peso, to USD or Euro. Because bitcoin is money, there should be absolutely no tax on converting it to other forms of money no matter how bad those currencies are failing.

1) She has a property in Brazil 2) She has an active Brazilian bank account 3) She has not given up tax residency in Brazil. 4) There are plenty of ways to hide an IP address, or put it in Brazil through VPN. I don't think that's illegal.

I did some research and find that if I put in this position then I need to pay taxes to EU no matter what I am paying to my country because no treaty restrict them from double taxing me but since you mentioned there's a treaty that avoid double taxation then if you can prove that you are paying taxes in Brazil EU can't legally demand taxes. But I am not sure because these laws can be confusing, which is why it is recommended to see a professional who may got better ideas to avoid taxes and pay as little as possible legally.