Litecoin
$171.90 -10.76%
LTC · 2d

Crypto Assets and Taxes - a friendly reminder

Disclaimer: This is no financial advice, please research the exact regulations applicable to yourself. It seems to me that the topic of taxes for crypto assets is rarely discussed. I would even go so far to say that the majority of people trading do not know the first thing about the taxation applicable in their state of residence. This is mostly likely the case because tax law seems to be seen as excessive regulations imposed by a central government agency - therefore, by definition, standing in direct contrast to decentralized networks and trading. However, in many countries taxes are already applicable when cashing out your crypto-earnings today and with the steady increase in value stricter regulations are sure to come in the near future. Therefore, ignoring this topic can often proof to be perilous. As for now, taxation throughout the EU is still up to the individual countries (even though uniform taxation will most likely be introduced sooner or later as governments finally begin to understand the true power of cryptocurrencies and blockchain technology). Generally speaking, there are a few things that are important to remember when thinking about trading crypto assets (these seem to be applicable for most countries): * If taxed, crypto assets usually fall under capital gains tax, income tax, or VAT (upon conversion to fiat currencies). * This means that crypto assets can attract anywhere from 0-50% tax, depending on how the asset is intended to be used as well as the individual tax bracket one falls into under consideration of earnings from work or other investments. * These rates mostly apply as soon as you realize your earnings (therefore even when one is just selling coins on an exchange and not leaving them on the exchange/in their wallet for re-investing or in order to cash out at a later time). * Most importantly: when trading as an individual, there is often a possibility to reduce ones Income Tax liability by offsetting losses against future...
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