Quote from: darkangel11 on December 13, 2016, 02:41:38 AM

Quote from: pawel7777 on November 28, 2016, 01:20:30 PM

Quote from: rocketloki on November 28, 2016, 12:55:35 PM

As long as we keep Bicoins as btc in our account and don't exchange them to either EUR or USD will we be liable for tax at this point?

I was just wondering if somone know about it since my CPA say no.

Could depend on your jurisdiction and/or the type of activity, but in most cases (in my unqualified opinion) the answer is Yes. Doesn't really matter if it's bitcoins, foreign currency, or even other goods/services (received as a payment), you're still expected to pay tax on it (providing it's a taxable income), at the exchange rate/value at the time of receiving payment.

Let us know what kind of earnings are you talking about and what country do you live in and maybe someone will offer you a sound advice.

And here lies the problem. Income in bitcoin is not a taxable one and you are not supposed to pay the tax based on the exchange rate at the time because you are not exchanging anything.
First of all the value of coins is not recognized globally and does not have a global market. Furthermore the price differs around the world, so what exchange rate should we consider? What if the country you live in has no working exchange?
You are supposed to pay taxes only when you exchange your coins for fiat or a real estate. Until then you still don't own anything besides ones and zeros on your hard drive and nobody but you knows about it.

Where did you get that idea from? Are you implying that if you're running a business and only accept bitcoin payments you're magically tax-exempt until you 'exchange' (which may never happen ie when your landlord/local store/suppliers also accept BTC)?

That's simply wrong. It's not even limited to bitcoin, if you conduct business activity, you need to pay tax even if you only perform barter transactions, otherwise it would create easy to abuse loophole.

I don't know whether there's any official guidance on how to determine market value of bitcoin/other goods or services, but I'm guessing you'd probably be safe to use rate of the major exchange in your country or the average rate of few major exchanges. And if you were to massively understate the value of your income (i.e. by using the rate from some obscure website which offers to buy 1 btc at £1) then you'd be setting yourself up for a tax evasion charges.