It's the time of year again where the taxes will come round soon in the Netherlands.
The rules in the Netherlands regarding crypto holdings are slowly becoming clear and they are not bad.
Roughly, you pay taxes (1.3%) over whatever crypto you had on the first of January of any given year.
Of course, this raises a few problems because what is crypto worth at any given time? It depends per exchange or even per second.
I'm going for an approximation of the price and then I'm legit regarding my holdings.
But for STEEM it's different.
Some of my STEEM I bought and that's just like Bitcoin holdings (1.3%).
But some of my STEEM I earned with blogging. And that's raising some difficult questions.
I talk about it more in my vlog.
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Your tax system sounds quite different from ours in the UK.
In the UK I understand that we need to record the fiat equivalent of the income we receive in Steem (using exchange rate at the time the Steem was received), this amount is subject to income tax (at your normal rate) if you're an individual, and adds to taxable profit if it's a company.
Also, we need to account for changes to the value of any Steem and Vests that we have in our Steem accounts over the course of the tax year. Any increases in value are subject to capital gains tax as an individual, and is a chargeable gain for a company.
My tax isn't due until March so this is just my current understand and may change because as you say, it's pretty complicated/new.
I made a tool on SteemReports which might be helpful for some of this:
http://www.steemreports.com/financial-accounts-summary/
It's seems it a lot more complex in the UK. Good luck with that! Your summary tool is fantastic btw and I played around with it for a while. Very handy! A question, I can't get the info for Jan and Feb of 2017 to display. I tried for different users and it's the same. Could you help me out?
Hi man, I've updated the financial summary tool so it includes all of 2017, if you'd like to have a look: https://steemit.com/steemdev/@steemreports/improved-financial-accounts-tool
Man that is awesome, I'm going to check it out now!
Yeah, it's tricky to say the least! I'm afraid the tool doesn't currently cover those months. I started it thinking about my own tax situation and our tax year here normally starts in April. I will try and make time to collect the earlier currency data soon though, because a couple of other people have asked about that. I will let you know when it's there.
Hi Andy I'm new to all this and wanting to try it out to possible earn money in the future, I doubt I'll start earning any steem right away but this stuff just confuses the hell out of me. I've followed you for future help and thanks for putting that tool there hopefully it'll help me out when I figure it all out.
u should pay them with steem not euro , and ask them to hodl
LOL!!
@yassine04 The Taxing Authority would actually be better off, but I don't think they understand.............
yeah , its really complicated to calculate the tax percentage,,, its too volatile
😂 this is so crazy funny
Yea taxes time is coming.
It will be the same in the states.
I will check with my tax preparer.
Keep on steemin'
All of you hating taxes!!! I have solution to that!!! All we have to do is to move to my economical-system were money is printed as basic income to everyone + there is a goverments percent that is printed for goverments expences. This system could make crypto adoption so much easier, since there are no need for taxes, so all the shops and so on would not have to realy care too much about other currencies. They could just HODL!!!
I have a similar (I believe more nuanced) idea that I've begun working on. Would love to hear your thoughts: https://steemit.com/life/@halfjew22/proposal-for-extracting-value-from-positive-behaviors-and-its-imagined-societal-impact
LOL
I'm having the same problems, I guess i'll use CMC and move the mouse as close to december 31th 23:00 UTC = januari 1st 00:00 Amsterdam! Then convert it to euro's manualy!
I don't plan to put the author rewards in box 1, everything will go to box 3!
1.3%? Lol that’s a dream! We’re looking at 20%+ in the states.
I'm beginning to realise it's not bad at all compared to many other countries.
Please consider writing a post on what you know about taxes and crypto in the states.
Peace.
In our country, we have to pay 12% taxes on crypto (18% if you live in the capital city) and it fucking sucks. I would happily pay 1.3% taxes on my crypto, that is literally nothing compared to 18%.
I agree. What country do you live?
I live in Croatia.
Thanks @exyle! I had this discussion some days ago on a german thread. Here in Austria you only have to pay taxes, when you hold cryptos for less than a year. That sounds good if you plan to hodl anyway, but it´s horrible in real life, because the moment you exchange one crypto for another, you have to treat it like a sell! (And there are normal income taxes on it - so everything beyond 100k per year means paying 50%tax) Since I sometimes do several exchanges per day between cryptos, I would need to quit my job and do nothing else but documenting every buy/sell and the price at this moment - that´s more than anyone can handle! What makes things worse with Steemit is, that if done correctly, you will have to document every time you click on the "Redeem" button and the price of STEEM and SBD at the moment you click! This is simply undoable!
1.3% is pretty good, glad to see that slowly cryto space is coming under regulation which is really good for longterm growth...I guess the best option for government is to tax whenever cryto-currency is converted into fiat...
My guess is that if your country taxes cryptocurrency mining (Bitcoin Mining for example), then whatever the tax law says about that is an apt comparison for generating SP/SBD via blogging. It's an aesthetic difference, nothing more.
Proof of Work = Proof of Brain
With one you are using a pickaxe, with the other, a pen.
The real challenge is in calculating all the correct values for each small author and curation reward over the course of a year. But I imagine some intrepid young programmer could easily write a program to calculate that for people.
here(in Canada) it is considered a commodity and we pay capital gains when we sell them(50% of the amount is taxable. In the case of Steem, it's easy, it's a capital gain with a zero cost basis...so no deduction.
1.3% is legit.
Wow 50% is a serious amount. I'm beginning to realise the Netherlands is a good place to be when it comes to capital gains.
An interesting puzzle indeed; what part is investment and what part is earnings. Since I earned all my Steem the puzzle might be simple, but since it immediately changed from earnings into investment I wonder how the accountants will handle it.
P.S. What time of day on jan.1st? I don't live there anymore, but the tax code in the US spans a whopping 74,608 pages the last time I checked.
Will Steem and SBD be taxed in the Netherlands?
I believe that these laws and regulations apply only to crypto money such as Bitcoin, Ripple.
@exyle
Steem and SBD are also crypto. So yes.
I checked the rules for the "belastingaangifte" last week as well and the way I understood is that for the aangifte 2018 you need to list the profit you had in January 2017 (not 2018). I made screenshots of the profits I had 1st January 2018 which I will use in my aangifte for 2019.
You are correct of course. I made a small edit in the post.
What about daytrading? Did I read correctly this will allso be taxed as "earnings" ? Edit: coins & tokens accumulated through daytrading (how do they plan to keep track)
"Roughly, you pay taxes (1.3%) over whatever crypto you had on the first of January of 2018."
Uhm, no. You're doing taxes over 2017. So 1st of Jan 2017 is 1 value (convert that to euro's at the rate of that date) and 31st of Dec 2017 is 1 value (convert that to EUR at the rate of 31-12-2017).
There, you're done with how things are done in BOX3 (vermogensbelasting).
However, in your video you are talking about income taxes. If you are considering Steem to be income into BOX1 (income) you are talking about a whole different ballgame. It will be pretty difficult to find good advice on that subject, exactly because of the questions you are asking.
So I would suggest (but no advice, no responsability, no liability accepted, etc) just put em in BOX3.
Man if its 1.3% than might be no problem but what if the taxes raised to 30% of your earning than it might not be the good idea for the people.
You are correct. I edited the post. And yes, it's the income tax that is the biggest puzzle. That's why I also suggest putting some (worst case) money aside.
I was wondering about exactly that! In my case I am way under the minimal amount that requires telling the tax people about my crypto investments but that does leave me with the question whether rewards on Steemit are income and will therefore be taxed accordingly or if it will be considered crypto currency regardless of whether it was earned by adding value to a platform or by markets going up and down.
For now I am too small for it to become a problem for this year's taxes but who knows where I will stand next year?
Plse keep posting new developments!
And thx for the post, of course :-)
Grappig want ik wacht al twee weken op een antwoord vd accountant over Steem en tax.
Ik laat je weten wat ze antwoordde
I'm curious because my accountant did not get it. Curious what yours has to say.
Keep you posted
If a farmer plants a crop in the Netherlands and harvests it inn the fall but does not sell the grain... He has the option to store the grain and sell it next year. When does it become taxable as income? In the U.S., it is taxable when it is sold for fiat.
Although the situation is not exactly the same, it is very similar.
I like your analogy a lot. What's the tax rate when he sells it to fiat?
In the U.S the tax rates change based on type of tax and personal tax brackets. Taxes are also different in each State. Taxes here are impossible to resolve.
Yes, I agree @doctorjohn ,and pls read my comment above.The same I believe is true for earnings. If I earn 100 one day teaching and put it in a bank account, and it grows to $500, I do not pay income tax on the growth rate of $500. I pay it on the initial $100. Same should hold true for crypto. If he reinvested his steem, which he did, the growth should not be taxed as earnings, right? Just a thought. Blessings.
Thanks for the honest advice. We are pioneers. My daughter called for advice from my sister who is a US accountant. My daughter is planning to make money in 2018 on Steemit and wanted to know how it would affect her small business taxes here in US. My sister said all the same you did AND another good advice. You are taxed on income at the rate at the time earned. So if it is worth one dollar in Feb but 10 dollar in Dec, you pay tax on the one dollar, as it was the time you earned it. However, you must be able to document all... so continually snapshot your steemit earnings, as you earn it, then at end of year, base your tax on the earning at date, not at its earnings through growth. You will save and it is legal, I think that is how she described it. I don't give financial advice, I teach so my taxes are a joke they are so little, but You are an honest man, so I wanted to pass that on. I would seek the advice of a second accountant, if I were you. Honesty is commendable. The Lord smiled today over this video. Blessings.
Hey Exyle,
thanks for this video. I also live in the Netherlands and I had the same question about Steem. My take on it is as follows.
Steem is created out of 'thin air' - essentially, just like BTC - even though the technicalities are different. But still it's something out of nothing that is created. With that said, as far as tax ruling goes, I apply to it the same logic as they apply to BTC - at least at the time of writing this, when we have no other rules than the ones you mentioned.
We have to wait for the tax legislators to figure it out how to deal with this situation. Trying to figure it out by ourselves is basically being in their business - and that's none of our business so to say. So I just let them do their work and I follow the existing rules for the time being.
Even when they come up with a new rule, how far back can they make it retroactive? Perhaps it's good to look at some historical cases in the Netherlands as to how far back retrocativity of new rules typically applied.
Netherlands is a tax heaven when it comes to paying taxes on capital gains :) So, I'll gladly put aside 1.3% of my ROI from all cryptos - so far it's not an issue for me though :)))
Question - do you include your Steem earnings in quarterly taxes, too? Because I'm about to do them for Q4 2017
And last but not least, because cryptocurrencies are so puzzling for the current taxation system, I think the whole system will need to change and enter a new paradigm. This may take some time but until then, let's just pay our taxes on capital gains and invest wisely into something that can create a nice cashfow - in or outside of crypto :)
I have the same puzzle right now. In our country even though we don't have any laws about crypto, we have to become individual entrepreneurs to be able to legally withdraw the crypto and pay 13% taxes for each cashout (or something like that).
Wat is belastingaangifte toch een akelig woord. Ik denk ieder jaar, dat kan ik zelf wel. Maar dan komt er weer iets nieuws bij, nu weer de crypto. Zal wel met box 3 te maken hebben, maar is mooi uitzoekwerk voor de accountant. Ben trouwens op 30-12-2017 begonnen dus deze aangifte is nog niet spannend voor mij ;-)
Tax time is really a nightmare for me. I am a citizen of one country, live another and make my living in a third. Everyone wants a piece of the pie. Some more than others. The percentage of tax varies too. Anything between 15% to a whoping 38%! Let the fun and games begin!
There are a lot of nice software applications out there. In addition to all the Crypto stuff you need to know, you almost need to have a background in accounting to manage this stuff properly. This actually could be the holding some people back from investing big money.
This is not a very large percentage of tax.
@exyle Just do what you feel is right and don't Stress over it to much. There will be so many changes over the next year who knows what it will be like even next year.
Well it’s an important topic of discussion among crypto investors in USA also.
Yes you pay capital tax over everything that has value. Cryptocurrencies are specificly mentioned on the belastingsdiensts website. But if you have any kind of loan like a mortgage you can use this to reduce your capital tax.
Hmm if you live in Turkey, there is not any internet taxes or any taxes for cryptocurrency for now.
nice!
This is what governments do. They will not give us a free ride. If this is all, we are going to the moon. Speculators might lose, since the prices could go down even further, but long term this is a good thing, since regulation will bring mass adoption. No one like to pay taxes, but this is a reality that we have to face.
so basically you should always to divide your crypto worth by 2.
then you should be always on the safe side.
better to calculate lower and then be positive surprised than vice versa
I personally do the following to track my Steemit gains (or at least will be in the coming year)...
But overall taxes do complex the living hell out of cryptos, and are by far the thing I hate most about the space at the current time (not only the complete rape the taxman lays down on me, but also the complexities of tracking it all...)
@exyle,
Yeah it might be a big "?" Coz price of crypto do high fluctuation! Therefore, they must ask taxes in the coins you hold at the moment!
Cheers~
But what "moment" though? If I fill in my forms now, it will take months to process (at least2)
What if ot takes a huge drop in between?
This will be very very hard to regulate & tax
Im glad you touched this topic briefly, because nobody seems to know the rules exactly. 1.3% is not bad at all compared to different countries, but the real mystery is... where was it all then, at that moment. And with how much value..I just dont remember, and not even from THIS Jan 1st.
Cryptowallets arent giving a 'jaaroverzicht'.
I only started ended 2017 so this seems like a issue for next year for me (except for the fact that I didnt check anything on Jan 1st this year)
wYea this really raises some difficult question like you said because i wonder if i would be taxed for blogging. Steem is really different because its not all the steem that one has that are bought. well i feel some policies need to be properly reviewed before being implemented to void ambiguity.
Oh yeah, all the same it's becoming reality and you're right, the fact that the state starts to take taxes from cryptography has nothing to do with this terrible, on the one hand it's even better, because the state already in fact recognizes the existence of crypto currency, thereby legitimizing them. Another question is what taxation mechanism will be and what criteria will be used to collect taxes, it is interesting to know in the future! Thank you Mark and keep us informed of what's happening!
I agree with what you said @exyle. I don't think it will be easy for this tax system to work or at least be favorable to all. Since bitcoin and cryptocurrency price changes as fast as per second and varies on different exchanges, how confident are we that what we pay in terms of percentage is what we really need to pay? It's just so complicated for me.
Pay them with bitcoin or steem, so it will be better :p
If you were to remain anonymous wouldn't it have been better just to not declare your crypto holdings?
yes i hope this is very good information for us
Really different from the tax system I know....
Was thinking about it myself. Though i am far from the threshold for being taxed, i definitely will give an accountant a visit. Better safe than sorry. Great video as always.
thanks for information on bitcoin n steemit puzzle 😊
If you somehow managed to stay unknown wouldn't it have been exceptional just to not pronounce your crypto possessions
I trust in future we will likewise face such laws identified with charge paying on bitcoin...
I really like your posts and I enjoy very much with all your posts.👍
@ exyle it is really good the way you are giving a good message to the world. I love this your update steemit post. upvoted
i alwyes follow your post sir that is valuable to me
carry on sir
O it’s a hard case for all the steemians