PayPal integrates Bitcoin (BTC) on its platform. This is a quantum leap for the acceptance of the cryptocurrency. But tax experts are sounding the alarm: the current situation inevitably leads to chaos in the tax return.
Anyone who has sold Bitcoin at a profit should have already come into contact with the subject of taxation of cryptocurrencies. Even attentive readers of BTC-ECHO know: The tax regulations for Bitcoin Rush and Co. are not easy to grasp intuitively. Or like Werner Hoffmann, managing director of the tax experts at Pekuna towards BTC-ECHO, expresses:
Taxing Bitcoin is complicated – there are hardly any legal bases
However, there is a simple formula. According to Paragraph 23 of the Income Tax Act (EStG), the sale of economic goods falls under the so-called “private sales transactions”. And how these are treated for tax purposes is clearly defined by the legislature. Anyone who holds Bitcoin for less than a year pays income tax on the capital gains. Unless the profit falls below the exemption limit of 600 euros (EUR). What sounds like a specific regulation in theory, sometimes presents traders with major tasks in practice.
The PayPal integration of Bitcoin and its tax implications
Because, in principle, every purchase, sale and exchange must be clearly noted in order to determine the net profit. If the trader also trades between different coins during this period or even spends them on goods and services, the complexity of the resulting tax report increases again.
The latter is likely to become more and more important. As we have already reported in more detail, the payment service provider PayPal integrates the purchase, sale and payment with Bitcoin (BTC) and some Altcoins in its ecosystem. US users can now use BTC on a daily basis.
What is certainly one of the most bullish news of the year for the spread of crypto currencies is, from the point of view of tax expert Hoffmann, another building block of a solidifying wall of bureaucratic effort for all tax-loyal Bitcoin disciples.
PayPal is really positive for the crypto scene. 300 million users are on board overnight. However, the new users are not yet fully aware of taxes. Companies that accept crypto currencies as a means of payment will face massive problems as the number of transactions will increase massively. But the purchase of goods and services using Bitcoin is also a tax process.