Criminal by crypto trading? – Find out how to stay on the safe side!

If you think that the authorities have no interest or ability to see the profits of crypto traders, you are sorely mistaken. With the increasing popularity and the strong price increases they have become the target of the tax investigation. It is therefore essential to deal with your taxes early on in order not to run the risk of being punished.

The easiest way to do this is with a tax tool like Accointing.com – here you can import all transactions and the software will create a Winheller-certified tax report for you. In most cases there is no discussion about the tax situation: if there is less than one year between the purchase and the sale of the cryptocurrencies, the profit has to be taxed.

Can the tax authorities access my trades?

It does not have to be that the tax authorities becomes directly attentive to the trades of an investor. However, almost all crypto exchanges now have strict KYC conditions, which means that it is no longer anonymous where the Fiat money comes from and who receives it. So if there is a bank transaction to an exchange, it is no longer anonymous at first.

A closer look at the individual can be made by tips to the tax authority or by accidental discoveries. What must be clear to everyone: The blockchain does not forget. With it, all transactions ever made can be traced. Tracking is possible via the different cryptocurrency addresses. Of course an address cannot be assigned to a person in every case, but there are often certain transaction patterns that can point to a certain person.

What can happen in the worst case?

Even if it is not clear to many – the tax authority is increasingly focusing on the crypto sector. But what are the real consequences if profits from the trade with cryptocurrencies are not taxed?

  1. Estimation – if the tax office has found out that there are profits from the crypto trade, but they are not able to determine the exact amount of these profits, they have to estimate them. This estimate is usually very high in order to exert pressure.
  1. Punishment – possible here are a prison sentence up to 5 years or a fine. A tax evasion is present if incorrect or incomplete information is given or if the tax authorities are not informed about tax-relevant facts in violation of their duties. The attempt alone is already punishable.
  2. Administrative offense – A fine of up to 50,000 Euro can be imposed if it is a minor offense, a so-called “frivolous tax reduction”.

Can I report myself in order not to be punished?

For some years the tax authorities have been investigating cases of tax evasion in the area of cryptocurrencies. The more time elapses, the more experienced also the tax investigators become in handling Bitcoin and others. In the meantime very many traders made substantial profits with cryptocurrencies might not reduce the motivation of the involved ones in no way.

Who acts with cryptocurrencies and notices today that he did not pay taxes on all profits, can only be recommended to deal with the topic of the self announcement. The legal system keeps thereby also afterwards still the door open to impunity.

Sleep peacefully with the right tax tool

If you use a crypto-taxation tool and record your transactions early, you can look forward to the tax issue with complete peace of mind. No more endless Excel lists and hours of troubleshooting are necessary. Rely on the best tool on the market and test Accointing.com now for free. accointing

About Author

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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