If i sell my bitcoins to a site like coinbase at the end of the year do I need to declare that sale to the vat department and pay the 20% on what i received from coinbase ?
Don't do this. Don't sell bitcoins. And don't pay taxes. Just use bitcoins as a currency. Buy and sell with bitcoins. And fuck banks and goverments.
Oh, and what do you want to eat? ASICminers or ciggarettes or drugs? You can't affor everyday food with bitcoins anywhere...YET.
You certainly can if you use services like gyft to exchange coins for gift cards. A bit of a roundabout route but it allows that to happen.