Germany: Bitcoin Is "Private Money"

hypnosec writes "Germany has declared Bitcoin as a 'unit of account', which makes the virtual currency a kind of 'private money' and the process of Bitcoin mining has been deemed 'private money creation.' The recognition as 'unit of account' makes Bitcoin eligible for use in "multilateral clearing circles" and because of this citizens are liable to pay capital gains tax, if they profit from the crypto-currency by sale or purchase within a period of one year – the same as they would have to in case they profit by selling stock, bonds or other form of security. The question here is how the finance ministry would come to know of a person's Bitcoin holding as it is a decentralized currency with no governing body to keep count on the number of Bitcoins a person has. The German government expects that citizens declare their Bitcoin while filing their annual tax return."

Comments

Same as any other potential fraud.

[Anonymous Coward]

Honor system, but if you do anything to get on their shitlist they'll eventually find it out when you try and get it converted into salable assets.

Undocumented income may be frowned upon, but UNDECLARED income is worse if you get caught.

Remember Al Capone after all :)

Re:Same as any other potential fraud.

[felixrising]

Most taxation systems are self reporting. You can lie but if you get caught any profits from your deception rapidly evaporate.

Re:I'm out. Thank God

[AHuxley]

Re: Yeah I hate how much influence the IRS has in Germany these days.
http://www.dispatch.com/content/stories/national_world/2013/07/06/Germany-strikes-deal-to-help-U-S-catch-tax-evaders.html
It could be same hold as the IRS has over the Swiss banks?
http://finance.fortune.cnn.com/2013/05/30/swiss-bank-accounts-irs/
http://www.forbes.com/sites/robertwood/2013/07/09/swiss-banks-reveal-americans-u-k-deal-sputters-and-germany-embraces-fatca/