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Additional info for people from the Netherlands:

Owning Bitcoin and trading in Bitcoin for anything (goods or other currency) are legal as far as we know. Unless you own a business dealing with Bitcoin, all you need to do to be legal is add the profits that you make to your income. That's all. I'm not sure about the tax rules when you have a business in Bitcoin, but it's still legal to do anything with it.



Is BTC just sitting around in your account, gaining in valuation relative to the euro, considered "profit?"


I don't know about the Netherlands, but in most countries, capital gains of private citizens are taxed when realized. I.e. if you hold a stock worth 100€ in 2009, 150€ in 2010 and 110€ in 2011, and then in 2012 you sell it for 120€, there is a capital gain of 20€ in 2012, but none in the other years.


This seems odd as you haven't actually gained anything, the market's relative values of different things has just changed. As opposed to like actually making money from getting dividends from the stock.


Same rules apply if you sold your stock - you'll be taxed on the capital gain.


This is what I meant. Well explained!


If so, how does that work? If I exchange USD for Euros, and the dollar weakens against the euro, am I taxed?

Is it an issue of intent? If I exchange for investment purposes, it's taxed, but for practical purposes, it's not?


Bitcoin is considered a property since it is not specifically categorized otherwise, so it works a little different than currencies.

But answering that question is very complex for business, you probably don't need to worry about small gains as a person.


If you buy a (large enough) amount of some currency; later sell it, and the difference makes you a profit - then it's taxable income.

Intent doesn't matter as such - if you do it for 'practical purposes', then you most likely don't realize the gains (don't trade USD->EUR->USD, but do USD->EUR->buy stuff in Europe) or have very small volume (lots USD->lots EUR->go on trip->convert a bit EUR back to USD).


The article mentions there is a $200 exemption for personal transactions. However this only applies to personal transactions, not investments.

This also appears to not yet apply to Bitcoin, only "recognized" currencies like the Euro.


This is super interesting to me. If you exchange your money from one currency to another (USD, Euro, etc.) and profit from doing this, do you need to pay taxes? If not, is BTC treated as a currency, or as a security (eg. FB, TSLA) where you would obviously have to pay capital gains taxes.




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