Finland Has Identifies Traders Who Have Not Paid Crypto Taxes
Cryptocurrency Income Tax
Finland government has said that it treats Cryptocurrency like any other investment and therefore it expects all its citizens to pay taxes arising from the sale of cryptocurrencies. It was noted that most Finns have not been reporting income to the country’s tax department which arise from digital currencies. Reports indicated that the profits made from crypto investing this year was more than ten times than made last year.
Timo Puiro, a senior advisor at the Tax Administrations Corporate Unit, indicated that:
“Many citizens have not been reporting their bitcoin-related income. This is according to our report after comparing information that we collect from the tax information. Finland Tax Administration has authority to access information like payment details, and there are different ways of combining information and identifying the people who have paid and those who have not.”
In order to collect all the information, the tax agency has been given access to bank transfers in order to be able to scrutinize all transactions and identify people. It was noted that after matching the transfers, there are many people who did not make any profits from the digital currencies.
Finland has attracted a lot of Bitcoin mining firms including Bitfury and Kncminer because of its cold weather and nuclear-based power. There are also very many small-scale miners in the country. More to mining there are other crypto businesses in the country and also some well-known exchanges.
Puiro has talked about identifying undeclared crypto income even in the past. In fact last year he noted that they had been scrutinizing Bitcoin wallets for the same purpose to identify tax evaders. During his December speech, he emphasized that: “We have been analyzing Bitcoin wallets and over the last few years we have analyzed more than 10,000 of them. We have identifies more than 500 cases of undeclared income tax where profits were made.”
In another case, Puiro claimed that they had understood the crypto sector well after consulting with authorities from other countries.
The number of people identified this time is said to have increased from 500 to 3,300. Puiro added that:
“The estimated cumulative capital gain from the 3,300 people could be about 100 million euros meaning that the tax agency could receive more than 30 million euros if taxes were paid. It’s important to note that Bitcoin income is taxed as capital income here. This means that they are treated similarly to rent and dividends where the percentage of tax income is 30 percent.”
Puiro, in conclusion, urged those who have made profits on cryptocurrency to voluntarily declare their income to the tax authority. He noted that if people fail to report their income on cryptocurrencies, then the procedure of criminal tax evasion will be followed.