The NRW tax administration is targeting tax evaders - 4,000 users of the crypto exchange Bitcoin.de affected

The NRW tax administration is targeting tax evaders - 4,000 users of the crypto exchange Bitcoin.de affected

Since the beginning of June, the NRW financial administration has had access to an extensive data package with information about Bitcoin transactions. The data was provided by the German crypto exchange Bitcoin.de as part of a collective information request and covers the period between 2015 and 2017. According to research by Handelsblatt, the NRW financial administration is focusing on users who have spent at least 50,000 euros per year on the crypto exchange. That corresponds to around 4,000 users who are currently in the crosshairs of the authorities.

The data is currently being compared with the tax returns of the persons concerned and then forwarded to the responsible authorities in Germany. The NRW financial administration has developed new software to carry out the comparison efficiently. Tax evaders should therefore not lull themselves into a false sense of security.

The question arises as to whether private profits made with cryptocurrencies are even taxable. According to a ruling by the Federal Finance Court, trading in cryptocurrencies is a private sale transaction within the meaning of the Income Tax Act. This means that private capital gains from cryptocurrencies are generally subject to income tax and must be declared in the tax return. However, a speculation period of one year applies, so profits only have to be taxed if the purchase and sale of the cryptocurrencies take place within one year. Anyone who holds cryptocurrencies for more than a year can reap the profits completely tax-free. In addition, winnings that do not exceed 600 euros within one year are also tax-free.

A new revision of the EU Directive DAC-8, which is about to be adopted, will make it easier to check the correct taxation of crypto profits. According to this directive, all crypto service providers are obliged to report transactions from EU customers to the relevant authorities. Cross-border transactions and non-fungible tokens (NFT) are also taken into account. As a result, precise comparison of tax data will become the norm in the future in order to combat tax evasion more effectively.

If you have failed to declare crypto winnings properly, it is advisable to subsequently declare the untaxed winnings as part of a voluntary declaration in accordance with Section 371 of the Tax Code (AO). However, due to the complexity and seriousness of a tax offense, those affected should consider professional legal help. Tax evasion can result in high fines or even a prison sentence of up to five years. Therefore, it is advisable to act quickly to avoid criminal consequences. It is not advisable to hope that your tax liability will be waived, as the state makes great efforts to collect taxes. In this context, one should remember the famous quote by Benjamin Franklin, who said: “There is nothing certain on earth except death and taxes.”

Source: C.Kusche/editorial team finanzen.net