Best country to cash btc out in?

[moneromadman]

Hi guys.

I've been trying to do as much research as possible covering various company options, tax possibilities etc etc but still haven't come to a good conclusion as to how I'm best going about all of this.

I've been building my crypto holdings over a few years now with some very successful trades (never using fiat, trading Alts/Btc only) and in 3-5 years I'll want to be cashing this out. I appreciate over time things may change but I'd much rather have a plan now that I adapt than working everything out in the future.

Im from the UK originally, recently moved to France. I've been looking into Maltease residency / offshore company formation in a hope to be able to cash out in a few years time and benefit from Malta's 0% taxes.

I'm quite happy to travel around the place if needed as well putting the money through a business to change its appearance if required.

Any suggestions and discussions are welcome! I know what I'm doing with crypto but unfortunatley such tax and buisness formations are very new to me.

Thanks 🙂

 

[moneromadman]

I should also add I'm quite keen to be able to put assets such as houses etc in a companies name 😉

 

[dcisg]

unfortunately crypto to crypto trades are taxable events. if you are doing this already for years you probably already owe tax money to UK and France for the respective tax year. from law perspective you can move wherever you want at any time, you still owe them tax money. sorry to bring bad news but i´m in similar position and feel you.... haven´t cashed out anything yet but only started last year.

edit: to answer your original question, in Europe Portugal seems to be the best bet for me... crypto is completely tax free there, but consider that they might report trades from years ago to other authorities in the countries you lived before...

 

[moneromadman]

How would they go about proving previous trades or dates?

 

[moneromadman]

Following France's Massive Crypto Tax Cut, We Ask: Where are the most Crypto Tax Friendly Countries? | Cryptocoin Spy

Superb thread

 

[void]

dcisg said:
unfortunately crypto to crypto trades are taxable events
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Where did you get this information from? Does it apply to your country, EU or anywhere?
I don't think it's true - just assume intraday trading - does it mean that every single trade should be subject of some tax?

 

[blizz]

dcisg said:
unfortunately crypto to crypto trades are taxable events. if you are doing this already for years you probably already owe tax money to UK and France for the respective tax year. from law perspective you can move wherever you want at any time, you still owe them tax money. sorry to bring bad news but i´m in similar position and feel you.... haven´t cashed out anything yet but only started last year.
Click to expand...

It may be true, but if you have setup anonymous accounts for your bitcoins, Etherium etc. how should anyone know they belong to you? 🙂

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[moneromadman]

blizz said:
It may be true, but if you have setup anonymous accounts for your bitcoins, Etherium etc. how should anyone know they belong to you? 🙂
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Exactly. This is the case for gdax guys definitely, far less applicable to people using unverified binance etc.

 

[dcisg]

i'm in the UK, but as far as i know crypto to crypto trades are pretty much everywhere (US, EU at least) taxable

 

[Martin Everson]

Yes crypto to crypto trade and any capital gains or profit made are typically taxable...this is common sense, and same in most western countries. At same time crypto to crypto losses can be used to offset those gains ;-)

With a bit of financial engineering you can offset those gains with artificial or purchased loses and reduce your tax bill. How that works is you buy and take over somebodies crypto account (i.e bitconnect...lol) that has been wiped out and made huge loses equal to your gains. You then sell your crypto and claim the loses you bought to offset your gains and end result is zero tax.

I do not recommend doing this however. Tax authorities are clamping down on this sort of financial engineering activity.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[void]

Martin Everson said:
Yes crypto to crypto trade and any capital gains or profit made are typically taxable.
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on what scale?
in the morning I buy XMR for LTC, two hours later sell XMR and buy BTC and in the evening BTC->ETH
is there anything taxable at the end of the day?

 

[dcisg]

void said:
on what scale?
in the morning I buy XMR for LTC, two hours later sell XMR and buy BTC and in the evening BTC->ETH
is there anything taxable at the end of the day?
Click to expand...

of course. every trade will be calculated in FIAT at the time and if you made gains in USD, EUR or whatever you're currency is, you pay tax on these gains.

 

[moneromadman]

Good job all my exchanges are either unverified or verrified in a false name 🙂

 

[Martin Everson]

dcisg said:
of course. every trade will be calculated in FIAT at the time and if you made gains in USD, EUR or whatever you're currency is, you pay tax on these gains.
Click to expand...

Exactly right.

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[void]

I'm more and more confused...
Say I'm an early BTC adopter who bought 100BTC for 100USD. Nowadays this has a slightly different value 🙂 I didn't exit the positions yet and had no real life profit from it so far. Does it mean that I owe some taxes? If so the world is full of criminals.

 

[Martin Everson]

void said:
I'm more and more confused...
Say I'm an early BTC adopter who bought 100BTC for 100USD. Nowadays this has a slightly different value 🙂 I didn't exit the positions yet and had no real life profit from it so far. Does it mean that I owe some taxes? If so the world is full of criminals.
Click to expand...

You owe nothing until you sell the bitcoin. As soon as you sell the bitcoin you will then have to pay capital gains tax if the value of the bitcoin is greater than your original purchase price.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[void]

Martin Everson said:
You owe nothing until you sell the bitcoin. As soon as you sell the bitcoin you will then have to pay capital gains tax if the value of the bitcoin is greater than your original purchase price.
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sure - this is perfectly clear

then I find this

dcisg said:
unfortunately crypto to crypto trades are taxable events
Click to expand...

little bit misleading - I can trade crypto coins one for each other until the end of the world without being taxed (and regulated) if I never sell it for real world money or have another real world profit from it

 

[moneromadman]

void said:
sure - this is perfectly clear

then I find this

little bit misleading - I can trade crypto coins one for each other until the end of the world without being taxed (and regulated) if I never sell it for real world money or have another real world profit from it
Click to expand...

Martin is correct, you just read his post that oyu must sell into fiat, any exchange for anything it seems

 

[Martin Everson]

void said:
little bit misleading - I can trade crypto coins one for each other until the end of the world without being taxed (and regulated) if I never sell it for real world money or have another real world profit from it
Click to expand...

No dcisg is correct every single crypto to crypto trade is a taxable event. It is irrelevant whether you do not convert crypto to fiat and stick to crypto to crypto - tax is still due. You need to check with your specific country to be precise. With every trade their is either a gain or loss. You need to tally this all up for every trade, using the fiat mark to market price at time of the trade. Then if you made a gain at end of year you pay tax on it. No different than if you are doing FX trading.

The below is taken from Cryptotax UK who explains it very well for people in UK. A Guide to the UK's Tax Treatment of Cryptocurrency ”“ cryptotax.uk

4. I'VE JUST SOLD SOME CRYPTOCURRENCY FOR OTHER CRYPTOCURRENCY / STARTED TRADING

Until you declare yourself as a trader to HMRC (as below), you are considered an investor and your annual gains are subject to Capital Gains Tax as above.

Remember that even if you make less profit than the CGT allowance but have sold more than four times the allowance's worth in cryptocurrency, then you have to report this to HMRC as above.

If you have made more than the CGT allowance then you will have to report and pay tax on your gains. Bear in mind that every single trade you make ”“ even crypto to crypto ”“ will most likely impact tax calculations. To calculate capital gains on a crypto to crypto trade, convert everything into GBP value at the time of the trade. (I know.. it's crazy.) So if you have made a significant number of trades, it is probably worthwhile getting a tax professional just to make sure you get things right.

Advice from HMRC was to consider the tax rules governing the sale of shares (which can be found here and in further detail here) as comparable to the sale of cryptocurrency.

What is significant with respect to CGT is the concept of share matching, roughly translated to a complex example BTC scenario as follows:

Say you have accumulated 1 BTC over 8 months, having bought 0.25 BTC every two months at different prices ( January: £1500, March: £2000, May: £2500, July: £3000). On 1 October 2017 you buy a further 0.25 BTC at £3500 before deciding to sell 0.6 BTC that same night ”“ but at what price did you buy this amount? Furthermore, after selling this, you decide to buy 0.2 more BTC at £3600 on 17 October 2017.

This is the order in which your BTC is priced and disposed of:

1. BTC that you have bought on the same day (”˜same day' rule)

So in our case, the 0.25 BTC bought at £3500 on the 1 October 2017 will be accounted for at that price, leaving a further 0.6 ”“ 0.25 = 0.35 BTC to account for. This portion will cost 0.25 * £3500 = £875.

2. BTC acquired within 30 days of the sale (”˜bed and breakfasting' rule)

In our case, the 0.2 BTC bought on 17 October 2017 will be accounted for at £3600, as it is within 30 days of the sale date of 1 October 2017, leaving a further 0.35 ”“ 0.2 = 0.15 BTC to account for. This portion will cost 0.2 * £3600 = £720.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[acetylsemax]

You might find the rightmost column of use here. Use with caution, the list includes dependencies of CRS reporting countries, uninhabited geographical features, and countries that will be joining CRS (eg Taiwan). Belarus is not even a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes, has no personal CGT, and has declared cryptocurrency transactions to be tax-free for 5 years.