back to article Bitcoin blitzkreig as Germans prepare to tax virtual currency

Germany has become the first country to recognise Bitcoin as a real form of currency, which will be subject to tax like any other dosh. The country's ministry has declared that Bitcoins are “units of account” and should be regarded as “private money”. What this means is that anyone trading in the virtual currency will be liable …

COMMENTS

This topic is closed for new posts.
Silver badge

I suspect....

...Germany has become the first country to recognise Bitcoin as a real form of currency, which will be subject to tax like any other dosh....

...that ALL countries already recognise Bitcoins in practice.

In the UK the tax authorities are perfectly capable of levying tax on remuneration paid 'in kind', and do so regularly. If I decided to run a company and get paid in Bitcoins I would be required to post company accounts in the usual fashion, and I am sure that the Revenue would simply treat Bitcoins as a payment in kind with a suitable exchange rate. Exactly the same as if I had asked to be paid in butter or some other commodity.

And since commodity trade has been going on for eons, I am sure that no country would have a difficulty taxing it. All that has happened here is that the German authorities have mentioned it in a publication.

Things don't have to be 'currency' to be taxed.....

2
0
Bronze badge
Joke

Paid in kind

Next thing you know they'll be taxing charities based on how much they help people, as it is payment in kindness

Joke Alert, although I wouldn't be that shocked to see it actually happen.

0
0
Headmaster

Blitzkrieg

please. I know it's strange for the British how the Germans use 'ie' where English would put 'ei', but it enhances the effect of the language-based fun to get it right.

You are wery velcome.

Disclaimer: I am a Kraut, yes.

5
0
Silver badge

Re: Blitzkrieg

Something very ironic about this, lol...... And who says that the Germans don't have any humour...

2
0
Silver badge

Re: Blitzkrieg

Where's the "send corrections" button? Can't find it anymore.

1
0
Happy

@ Evil Auditor - Re: Blitzkrieg

Ve haff taken it avay to embarrats you.

@ Sebastian: Ich hab' mal vor einiger Zeit 'ne Korrektur ins Forum geschrieben, anstatt an den Author; ich hatte dann 'ne fiese Mail in der Inbox, daß man ja sowas nicht macht . . . Trotzdem Danke für's Anmerken, es hatte mich auch gejuckt, was zu schreiben.

1
0
Silver badge
Trollface

Blitzkrieg, aka. German-style "Shock and Awe"

" ich hatte dann 'ne fiese Mail in der Inbox, daß man ja sowas nicht macht"

Mach's einfach. Der Tommy schluckt das schon!

1
0
Coat

Re: Blitzkrieg

And who says that the Germans don't have any humour...

As a petrolhead friend of mine once said "People often say that Germans don't have a sense of humour - the Porsche Cayenne is proof that they do"

Mein Jacke, danke ...

0
0
Silver badge
Happy

Re: @andreas koch @ Evil Auditor - Blitzkrieg

Ve haff taken it avay to embarrats you.

Blimey! Those Krauts are everywhere, messing with our lives, messing with our beautiful language almost worse than the Septics.

And all those who don't do irony should stay in... Germany. SCNR

1
0
Thumb Up

@ evil auditor - Re: @andreas koch @ Evil Auditor - Blitzkrieg

Zere iz a reazon zey tolt me to leeve . . .

2
0
Silver badge
Happy

Re: @ evil auditor - @andreas koch @ Evil Auditor - Blitzkrieg

Well played andreas koch, well played...

1
0
Bronze badge

Re: Blitzkrieg

Sebastian, one traditional English spelling rule* has been taught to pupils as “I before E, except after C, or sounding like A, as neighbour† or weigh”. Even if blitzkrieg were a native English word, “ie” would have been used rather than “ei”.

* — As one might expect, though, several exceptions to the rule exist.

† — Or neighbor in places with an active U conservancy.

0
0
Bronze badge

So ?

FTFA : " one problem with taxing Bitcoin is that it's often impossible to work out how much any one person owns. The currency is broadly anonymous and there are few reliable methods for actually establishing where a transaction took place, meaning that levying national or regional sales tax could be nigh on impossible."

How is that different from cash ?

0
0
Silver badge

Re: So ?

Not much different from cash. Except there are limitation for cross-boarder transfer of cash within the EU. And more and more limitations on how much you are allowed to pay in cash.

But the question "so?" remains. There are countries (e.g. some small places in the middle of Western Europe) where the state doesn't have access to its citizens' account data, where the tax declaration mainly remains at the discretion of the tax payers. Guess what, it still works quite well.

2
0
Anonymous Coward

Re: So ?

I'm pretty sure that there aren't any limitations of how much money you can move around the EU, as there is a freedom of business arrangement. There are cash limitations, which are more along the lines of anti-money laundering rules though.

as for "There are countries (e.g. some small places in the middle of Western Europe) where the state doesn't have access to its citizens' account data, where the tax declaration mainly remains at the discretion of the tax payers. Guess what, it still works quite well."

It didn't work that well for Greece, did it?

0
0
Silver badge

Job Vacancy - Darknet Tax officer

"Apparently" there is quite a lot of bitcoin activity going on in the Darknet ......... and it doesn't appear as though there are too many Darknet Tax Officers making rounds....

1
0
Silver badge
Big Brother

"Hi, I'm the gov. Nice household you got there. Would be a shame...."

Of course, the one problem with taxing Bitcoin is that it's often impossible to work out how much any one person owns.

It's not like it's possible to figure out "how much one owns" in that stupid monopoly money infesting the Eurozone either, right?

Yeah, thanks Keynes.

1
0
Anonymous Coward

Since they are going to be trying to tax mostly drug income...

Can we just speed things up already and legalize and regulate the majority of drugs. I would hazard a guess that the vast majority of bitcoin activity is on sites such as Silk Road. Surely if government's cant try to claim their cut of tax from currently illegal activities???

0
0
Silver badge

Re: Since they are going to be trying to tax mostly drug income...

I challenge you to find a drug dealer that will accept virtual currency.

0
1
Silver badge

Re: Since they are going to be trying to tax mostly drug income...

"I challenge you to find a drug dealer that will accept virtual currency."

I can name two: The Silk Road and Atlantis, both TOR Onion sites. Both rely on Bitcoin and the related Litecoin as the medium of exchange.

0
0
Silver badge
Pint

Re: Since they are going to be trying to tax mostly drug income...

They use Tide detergent as currency too, so why not?

As has been widely reported recently [beginning of 2012], an unlikely crime wave has rapidly spread throughout the United States and has taken local law-enforcement officials by surprise. The theft of Tide liquid laundry detergent is pandemic throughout cities in the United States. One individual alone stole $25,000 worth of Tide detergent during a 15-month crime spree, and large retailers are taking special security measures to protect their inventories of Tide. For example, CVS is locking down Tide alongside commonly stolen items like flu medications. Liquid Tide retails for $10–$20 per bottle and sells on the black market for $5–$10. Individual bottles of Tide bear no serial numbers, making them impossible to track. So some enterprising thieves operate as arbitrageurs buying at the black-market price and reselling to the stores, presumably at the wholesale price. Even more puzzling is the fact that no other brand of detergent has been targeted.

What gives here? This is just another confirmation of Menger's insight that the market responds to the absence of sound money by monetizing highly salable commodities. It is clear that Tide has emerged as a subsidiary local currency for black-market, especially drug, transactions — but for legal transactions in low-income areas as well. Indeed police report that Tide is being exchanged for heroin and methamphetamine and that drug dealers possess inventories of the commodity that they are also willing to sell. But why is laundry detergent being employed as money, and why Tide in particular?

0
0
Silver badge
Coat

Re: Since they are going to be trying to tax mostly drug income...

...But why is laundry detergent being employed as money, and why Tide in particular?...

Non English-speaking drug dealers misunderstanding idiomatic English?

" No, officer, you can't pin anything on me. I'm clean..."

I'll get my coat...

1
0
Silver badge

Re: Since they are going to be trying to tax mostly drug income...

You can order hit men and mercenaries in Soldier of Fortune Magazine too...

Go ahead and order you up some drugs through one of those places and see if it's a drug dealer or government agents that show up. Report back on your findings.

0
2
Silver badge

Re: Since they are going to be trying to tax mostly drug income...

But why is laundry detergent being employed as money, and why Tide in particular?

Maybe the dealers misunderstood the concept of "money laundering" ?

1
0
Anonymous Coward

Re: Since they are going to be trying to tax mostly drug income...

Sure, keep thinking that... Silk Road works and it works well at that. Imagine cutting out all the street level shit where drugs get adulterated/cut with all kinds of shit. Instead you deal suppliers who are keen to protect their reputation and provide good service.

And yes most deal exclusively in bitcoin and its far safer than risking your health on street shit.

Source: experience and a test kit.

1
0
Silver badge
Angel

Re: Since they are going to be trying to tax mostly drug income...

Instead you deal suppliers who are keen to protect their reputation and provide good service.

My free-market heart is ok with that!

0
0

Re: Since they are going to be trying to tax mostly drug income...

> I would hazard a guess that the vast majority of bitcoin activity is on sites such as Silk Road.

Actually, Forbes magazine's estimate of the Silk Road's revenue places it at under 1% of bitcoin transactions. There are over 7500 merchants using just one bitcoin processor, BitPay, to handle payments in bitcoin and converting it automatically to deposits in local currency. The Silk Road is notorious, because the media could not resist it as a story, but it is actually a small part of the bitcoin economy these days.

0
0
Silver badge

Achtung

If you can't get a cut of the action then legislate for it.

Strange, Germany now owns and controls more of Europe than when Adolf Hitler was in power and now they want to take ownership of a virtual currency.

Still, as they already own Greece, Portugal, Cyprus and Ireland what are a few Bitcoins in the great scope of things. If you can't get a cut of the action change the rules!

0
6
Anonymous Coward

Re: Achtung

That's a scummy comment: likening bailing out failing countries to the second world war. Scummy.

0
0
Silver badge
Headmaster

Re: Achtung

> bailing out failing countries

It's just the banking system that failed. The countries were all right. No bailouts were needed either. Iceland got back on its feet by itself. The southern state-handout-and-devaluation-addicted guys just moaned and bitched while rolling on the ground though. A pox on them.

0
0
Anonymous Coward

Re: Achtung

Err? Greece and Spain, their countries are failing, because they arsed up their economies, a couple of banks may have helped, but wholesale black market and tax avoidance can't be pinned on anyone other than the people who are carrying it out.

2
0
This topic is closed for new posts.

Forums