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 ?
The VAT system only works if you buy something from a retailer or a shop, a product or a service using bitcoins. Due to bitcoin's decentralized nature, not even the government can regulate it, thus imposing tax would be impossible. Personally, there is no need for you to declare any VAT since it did not involve any transaction to a third party using bitcoins as a payment. Though it may be a case-to-case basis depending on your country, but I think it is not needed.