By now, if you have spent any time and/or money in the cryptocurrency sphere, you'll probably have asked yourself this question: Do I have to pay taxes on my profit? Short answer, yes! Please do. I wouldn't want to see the government knock down your door for not doing so... ;)
Recently, an article about the French government reducing their crypto tax from 45% to 19% made me think about how I will be taxed once my portfolio has mooned. For those who aren't aware, investments can be taxed for short term and long term profit. Usually, the definition of what time period constitutes short term is dependent on each country, but from what I have seen it varies quite often between 6-12 months. If you are thinking of selling some of those short-term profits to pay that long awaited vacation of yours, you might want to think twice before doing so. In some countries, waiting several months might mean the difference between paying capital gains taxes and none at all.
Take Germany for instance. There, cryptocurrencies are not considered securities or assets like in some other countries, but rather as private money, which is similar to foreign currencies. If you cash out of your investment after more than a year, your profits are tax exempt! Awesome, right? Makes you think twice before taking out that vacation money. Furthermore, in many other countries, you usually pay far lower taxes after taking your investments out over the long term. In my case, this has considerably influenced my investment decision as to how long I want to keep a position open. What about you?
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