Is that considered money laundering by Bitcoin in Germany?

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I 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?

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If you are resident in Germany It is up to you to declare all of your worldwide income for tax purposes.  The tax man does not care what you do with your money, as long as you pay any and all tax due on it.  

This means declaring it when you receive a benefit (not when you bring the money into Germany!).  So, if you get 8% interest every year, then you need to declare tax on this each year when you are paid the interest (even if the money never enters Germany!)

 

Of course your strategy might seem simple, but you have to be aware of other impacts such as;

Fees for transferring money (can be expensive outside the EU)

Rules/laws in your home country and Germany for transferring large sums of money to/from foreign accounts

Fees for currency exchange

That a sudden rise/drop in currency value could have a big impact. 

That a sudden change in bitcoin value could have a big impact

Taxes that may be payable in each country in some cases.  In some cases you might be taxed twice, or have to pay different rates.

 

 

To do your tax return in Germany would then be much more complex, as you would have to show how much money you have made from your investment and then be taxed on it.  Depending on how your invested the money might depend on if you have to pay capital gains tax, income tax, or something else.

 

And don't forget, if you make a mistake with your tax declaration then you are responsible for it.  And governments have a habit of changing the tax rules every year, which might have an impact on you (from both Germany and your home country).

 

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4 hours ago, xxria said:
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).

 

Life is not so simple.   You have to consider as well the inflation in your home country and the stability of the exchange rate.  And this is forgetting costs of moving the money here and there.

 

I assume you are from Vietnam, so the inflation in the past couple of years has being low, in the 4%-6%, so your 8% does not look so promising anymore.  And then not long ago there were years with inflation over 20%.   And your local currency while a bit stable is as well a bit volatile.

 

Check how good the property market in your country is, maybe a better investment is to buy a property.

 

But answering your question, yes, you are required to report all earnings to the tax authorities.

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5 hours ago, xxria said:
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?

Yes, it's possible the bank will suspect money laundering, ask you about the money and later or immediately block/cancel the account and report the incident to the authorities if they aren't satisfied with your explanation/proof. Even if you haven't done anything illegal, that is. Maybe it's best to withdraw cash from home country or use a separate bank for "bitcoin money" so your main account which you use to pay rent, receive wage etc. isn't in danger.

 

Of course the main question would be why you want to go through bitcoin in the first place? Kinda sounds like you do want to evade taxes.

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The article reminded me of this thread somehow. ;)

 

Quote

Software Engineer Loses Life Savings in Quadriga Imbroglio

Tong Zou wasn’t a stereotypical crypto bro bent on accumulating flashy trophies such as Lamborghinis when he deposited his life savings into Quadriga CX’s digital exchange.

[..]

"I wasn’t using it for trading -- I just wanted to move my money over to my Canadian bank account," Zou said in the interview. “What I didn’t know was that my withdrawal would be pending or incomplete and it never got deposited in my bank account. I’ve been waiting four months so far."

https://www.bloomberg.com/news/articles/2019-02-09/software-engineer-loses-life-savings-in-quadriga-imbroglio

 

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