The short answer to whether you have to pay taxes when buying or selling Bitcoin is: yes.

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• In almost all countries, you have to pay taxes on the trade of most commodities
• The regulatory framework for taxation of cryptocurrencies differs from country to country

In this lesson, you will learn the basics of taxation for cryptocurrencies.

In most countries, you pay tax on the trade of most commodities but the situation is different in every country. As it gets quite complicated and every country has its own legislation, we strongly advise you to contact your personal tax advisor for further information about your individual situation.

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We strongly advise you to contact your personal tax advisor for further information about your individual situation.

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Buying a cryptocurrency like Bitcoin on with firm like Newera with fiat currency is a very easy process. But things get more complicated once you transfer your cryptocurrency to an exchange in order to exchange it into another cryptocurrency.

In most countries, this act is considered a “taxable event” by law like any transaction involving a commodity, meaning that you will have to pay taxes because the event produces capital gains (or losses).

Spending cryptocurrencies is also a potentially taxable event, which again depends on the country you live in and respective regulations.

In USA, cryptocurrencies are considered private assets. Thus profits from the sale of cryptocurrencies are tax-relevant. Such profits become taxable if you buy and sell cryptocurrencies within a one-year period. It may therefore be a good strategy to buy and hold cryptocurrencies for at least one year.

The following events are considered a “sale of cryptocurrency” under USA law: if you exchange a cryptocurrency into a fiat currency such as EUR, USD and others, if you pay in a cryptocurrency when buying a product or service, and if you exchange one cryptocurrency for another cryptocurrency or for another crypto-asset.

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In The Caribbean, profits from the sale of cryptocurrencies, which are considered private assets, are none tax-relevant.

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Keeping track of your portfolio

Keeping track of your portfolio with Blockpit

You should keep track of the cryptocurrencies you have bought for a number of reasons, such as making sure that you record your transactions for your taxes correctly. One option is to create a spreadsheet and add all the details you need for taxes right once you buy, trade or sell. You can either keep track of your transactions manually or download your trade history as a .csv file on your personal Newera profile to import all relevant information into your spreadsheet.