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The profit on bitcoins

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shane mike
The profit on bitcoins

Is the profit on bitcoins slipping through the tax net?(Bitcoin Fast Profit)

Bitcoins and other crypto coins are loved by many investors. Although there are now billions of euros worth of virtual coins in circulation, there is little Belgian or international legislation. Not even when it comes to taxation.

What does the tax law say about the tax on crypto coins?
Although there are billions of euros in virtual coins in circulation, little legislation is available. In the field of personal income tax, there was the first impetus in 2017, after an IT student had been drawn to the ruling committee - officially the Advance Decisions Service (DVB) - with the question of how his profits from the trade-in bitcoins would be taxed. As a professional income, a miscellaneous income or not at all?

The use of the word 'generally' indicates that investing in cryptos can also be considered non-speculative according to the tax authorities. This is the case if the realized added value fits in the normal management of private assets with due diligence. The 'Questionnaire crypto coins' of the Federal Public Service Finance also states that there are several tax systems under which crypto coins can fall.

Do I have to include the added value on bitcoins in my tax return and is it taxed?
The tax authorities have little or no knowledge of how many bitcoins someone owns. After all, trade is not regulated and often takes place via foreign trading platforms that the tax authorities cannot supervise. It is therefore up to the investor to declare his realized capital gain.

The line between normal management of your private assets and speculation is a matter of fact. Case law often looks at whether or not professional knowledge is used, the number of transactions and their frequency. It is up to the tax authorities to demonstrate that there is speculation.

Good family man

If - as diversification - you invest part of your private assets in bitcoins and act with due diligence, the profits are exempt from tax and you do not have to declare anything. A 'good family man' invests his money to allow it to increase in value, but prefers a safe strategy and invests in the long term.

Speculator

Speculators (also known as traders) are taking more risks and responding to the sharp price fluctuations. They want to achieve the greatest possible return in the short term and will therefore buy whenever the value is at a low point to sell at a high point. This is repeated over and over so that they can increase the value of their portfolio.

In that case, the income from crypto coins is taxed as a miscellaneous income, at a fixed rate of 33 percent (excluding municipal taxes) on the realized capital gain. Diverse income will also be more likely if you are active in the cryptocurrency community.

Professional trader or 'bitcoin miner'

Are you a professional trader? Or are you a 'bitcoin miner', which means that you approve and process transactions with certain software in exchange for bitcoins?

Once there is a clear organization and frequency in trading or professional resources are drawn on, your investment can be considered a professional income. The income is then taxed at the usual, progressive tax rates. These fluctuate between 25 and 50 percent (excluding municipal tax).

If you are considered a professional trader or 'bitcoin miner' it is also important that you fulfill the self-employed obligations. For example, you will have to join a social insurance fund and you will have to pay social security contributions.(Crypto Nation Pro)

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