Finland Has Received Less Than € 30 Million In Taxes From 3,300 Crypto Traders
Exactly who owes what in taxes has been the subject of much division, false information, and concern in the crypto world over the past couple of years as millions of new traders and investors have flooded into the market searching for gains.
While different governments have devised methods to advise citizens and collect due taxes on cryptocurrency trades, one government has come up short after doing its sums – Finland.
So, what exactly happened and what will happen now? We’ll explore that and more in this article.
Finland’s Stance on Cryptocurrency Taxes
According to casinopånett.eu, gains from Bitcoins and other cryptocurrencies are treated as capital gains in Finland, meaning they are seen in the same way as gains from the sale of stocks or precious metals, for example.
Finns pay 30% for gains of under € 30,000 and 34% on anything over and above that. The tax is owed either when the cryptocurrencies are traded back into Euros, Dollars, or other national currencies, or spent on goods and services.
Yet, it seems that most Finns either didn’t get the memo or have simply ignored it, and the Finnish Tax Administration isn’t pleased.
How Does the Tax Administration Know What’s Owed?
Isn’t the point of cryptocurrencies that many of them are anonymous and difficult to track? You might wonder, then, how the Tax Administration even knows what’s owed and what isn’t.
It turns out that it’s using tracking technology to monitor and match bank transfers to cryptocurrency websites such as exchanges, and it looks like 3,300 traders, or thereabouts, didn’t see that coming. Yikes!
So, What Happens Now?
It seems that traders who haven’t paid their taxes will be given a chance to pay it in back taxes in the coming year. While that could sting, it’s likely preferable to a conviction for tax avoidance, and so we can probably expect a small selloff in the Finnish crypto market as traders scramble to gather the Euros needed to cover these taxes.
Miners have also been told that they aren’t exempt from the taxes. In fact, crypto mining is seen as work, so the top level of tax on income over € 127,000 is 65%. In fact, a miner who earned €33,000 in a year would pay 57%, whereas a trader who earned the same would only pay 34%.
It’s probably safe to safe that Finland won’t become a crypto mining haven anytime soon!
This story is a prime example of why it’s crucial to know about your country’s tax laws surrounding cryptocurrency. In all likelihood, you owe taxes on your crypto gains no matter where you live.
If you think you can escape it, think again. As the Finns have found out the hard way, the taxman is usually one step ahead!
Photo via Shutterstock.