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xxria posted a topic in Life in GermanyI don't speak German and my English is also mediocre, please give an advice. Let's say I have 1000 Euro (in German bank account from legal income) because the German bank's interest is 0% so it is not wise to keep money in my bank account. In my home country (3rd world country), the bank pays interest around 8%/year, so what I can do is transfer all Euro from my German bank to my home country bank account (foreign currency exchange). After 2 - 3 years, I'll withdraw all money from home country bank (local currency not Euro) and buy bitcoin via home country service market. Then, I will sell all bought bitcoin in Germany via European service market to gain Euro (at that time, 1000 Euro from the beginning should be like 1200 Euro). Do you think any problem with this strategy? Is that illegal? I knew if I hold Bitcoin for more than 1 year, I will not need to pay tax for capital gain in Germany, but will the German bank question about my income when I sell all bitcoins to get Euro?
bincemathew posted a topic in FinanceHi All, I have read another post in this website related to CryptoCurrency tax and its procedures. But my topic is slightly different, Because I already did my tax filing for cryptocurrency trades and now the finanzamt is asking for additional documents. I did short term crypto trading so I had too many transaction within the span of few months. Below are the summary of so far that happened with my tax filing. My tax consultant(who is new to crypto tax filing) agreed that he will do it. He filed my taxes under Capital Assets /gains similar to Stock trades I guess. But he forgot to attach the Excel sheet containing my Crypto transactions which I created using Cointracking website by importing all my transactions from various exchanges into Cointracking. So about 3 months later, I got a response from finanzamt which was a system generated letter asking for additional documents. So I emailed my Tax consultant, he said he will send the excel sheet to them via fax and then he told me that he had faxed it to them. After 1 month, I heard nothing from Finanzamt so I ended up going to Finanzamt to check the status, but they didn’t gave any info to me and told me to keep waiting. But then I decided to call up the Finanzamt number which was mentioned in the letter I received from Finazamt and gave them my Stuernummer and then they told that they haven’t received any additional documents via fax or email. And she suggested me to submit a new tax filing application along with the documents required and for that she extended my deadline till end of January 2019. Now I am outside Germany for vacation and I had asked my neighbor to check my mails and yesterday I got a letter again from finanzamt similar to the last one asking for additional documents. I don’t understand what additional document I can provide for crypto currencies because exchanges like Kraken and BIttrex just gives out a CSV file as proof of transactions and which is exactly what I used to import into Cointracking to generate those Excel files in the first place. My questions are the following, Did my tax consultant filed the Crypto trades under wrong category ? Is bitcoin classified as Capital Assets/gains like Stock shares or does it come under the Private Money category (“Private Veräußerungsgeschäfte”)? Do I need to file a new tax return under this category? What additional proof can I give for my CryptoCurrency transactions other than the Excel sheet which I have already submitted (containing the date of purchase , sale, buying price , selling price and Profit made). I don’t have any bank transactions or something similar to prove every Crypto trades other than the report I can export from these exchanges. My tax consultant seems to be clueless on this whole cryptocurrency tax filing. But if I miss to submit any addiontal documents before End of January which is my extended deadline , Will I get fined every month after that? If I did get fined, is my Tax consultant is also liable on this matter or am I on my own? Can I go to a separate Tax consultant now who is familier with Bitcoin tax filing and ask him/her to do a fresh tax filing on my behalf? If so, do you have any recommendations for a tax consultant in Munich? I read the following in a similar forum about crypto currencies “VAT: In Germany cryptocurrencies are not subject to taxation. This statement has been repeatedly confirmed by the German Ministry of Finance (BMF). Please don’t confuse the VAT (Umsatzsteuer, USt) with the income tax (Einkommenssteuer, EStG). Cryptocurrencies are only tax-free in the context of the VAT. Income Tax: In Germany cryptocurrencies are classified as economic assets. Cryptocurrencies are, even though the name consists it, not currencies. Furthermore, they are not financial assets. In Germany we have a special Paragraph only for financial assets (§ 20 EStG “Einkünfte aus Kapitalvermögen”). At the present moment no cryptocurrency is a subject of taxation for the capital gains tax. The profit or loss with cryptocurrencies is regulated by the § 23 EStG “Private Veräußerungsgeschäfte”. If the time span between the purchase and the sale is smaller than one year, you must pay taxes on your profit, but you can also realize your losses. If the time span is bigger than one year, the profit is tax-free. Furthermore, when the interval between purchase and sale is longer than one year, it is not allowed to offset profits and losses. If your profit is smaller than 600 €, your profits are tax-free. For calculation you must sum up all your profits within the § 23 EStG. If your profits are greater or equal to the tax exemption limit (600€), all your profits which were made within one year are liable to tax. In addition, we give you a short overview about the taxation in Germany: • No VAT for cryptocurrencies • No Capital gains tax for cryptocurrencies (§ 20 EStG) • Income tax for profits (§ 23 EStG): o If Time span between purchase and sale is smaller than one year o If The total of all profits within a year for “Private Veräußerungsgeschäfte” is greater or equal 600€. • Personal tax rate (up to 45 %)” I also read about the same in another website (https://www.vlh.de/kaufen-investieren/geldanlage/bitcoin-ethereum-co-so-versteuern-sie-kryptowaehrungen.html ) Regards, Bince