{"id":8099,"date":"2023-05-29T13:43:44","date_gmt":"2023-05-29T13:43:44","guid":{"rendered":"https:\/\/teeviit.ee\/youth-info\/dealing-with-cryptocurrency-requires-thinking-about-your-responsibilities\/"},"modified":"2023-05-29T13:54:06","modified_gmt":"2023-05-29T13:54:06","slug":"dealing-with-cryptocurrency-requires-thinking-about-your-responsibilities","status":"publish","type":"post","link":"https:\/\/www.teeviit.ee\/youth-info\/en\/dealing-with-cryptocurrency-requires-thinking-about-your-responsibilities\/","title":{"rendered":"Dealing with cryptocurrency requires thinking about your responsibilities"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"8099\" class=\"elementor elementor-8099 elementor-8068\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-1abb04a elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"1abb04a\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-874ac2d\" data-id=\"874ac2d\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-f585aea elementor-widget elementor-widget-text-editor\" data-id=\"f585aea\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><b>Did you know that private persons have to declare and pay income tax on the income earned from the sale of cryptocurrency or an NFT (a non-fungible token)?<\/b><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-079a0ea elementor-widget elementor-widget-text-editor\" data-id=\"079a0ea\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Cryptocurrency trading, where income is generated through changes in the price of the cryptocurrency, is a common way of making money. Under the Income Tax Act, cryptocurrency is an asset, which means that a cryptocurrency transaction from which a private person makes a profit, must be declared in the income tax return. Profit is calculated as the difference between the purchase and sale price or, in the case of an exchange, the difference between the price of the asset received and the purchase price of the exchanged cryptocurrency. The profit is taxed with an income tax at a rate of 20%.\u00a0<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">For example: Mary bought one Bitcoin for \u20ac35,000 and sold it for \u20ac37,000. Mary made a profit of \u20ac2,000 (37,000 \u2013 35,000), on which income tax is \u20ac400 (2,000 \u00d7 20%).<\/span><\/i><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-4400182 elementor-widget elementor-widget-text-editor\" data-id=\"4400182\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">It is important to keep in mind that profitable transactions where a cryptocurrency is exchanged for another cryptocurrency, i.e. profit is made without regular currency being deposited into a bank account, must also be declared.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Since cryptocurrency is not a security under the Income Tax Act, losses from transactions are not considered and declared. Also, an investment account cannot be used to defer the income tax liability.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Income belonging to a minor must also be declared. The income tax return of a minor is submitted by their parent or guardian. The child\u2019s basic exemption taken into account in the parent\u2019s income tax return is reduced by the child\u2019s annual income.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You are also liable to pay tax when you pay for goods and services in cryptocurrency and generate profit.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">For example: Jacob has one Ether, which he bought for \u20ac500. Two years later, Jacob uses the Ether to buy a miner. Since the price of one Ether at the time of purchasing the miner was \u20ac3,400, the transaction made Jacob a profit of \u20ac2,900 (3,400 \u2013 500).<\/span><\/i><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-bb12cfa elementor-widget elementor-widget-text-editor\" data-id=\"bb12cfa\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Another activity related to cryptocurrency is cryptocurrency mining. Note that cryptocurrency mining is treated as a business in Estonia. Income received through business is business income. Business income is generated in cryptocurrency mining when the cryptocurrency received for mining is exchanged for regular currency or another cryptocurrency, as well as when the mined cryptocurrency is used to pay for goods and services. The received income must be declared on the business income tax return form E. If a private person is not registered as an entrepreneur, they cannot deduct mining expenses from the business income. In addition to income tax, business income is taxed with social tax. If you are permanently involved in mining, you have to register in the Business Register as a sole proprietor or operate through a company.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">For example: Peter is not a registered entrepreneur and decides to mine cryptocurrency. To do this, he buys the necessary equipment and rents premises. Peter has mined for more than six months and has received 10 Bitcoin in that time. Peter decides to purchase a new graphics card for 0.1 Bitcoin. Since the graphics card costs 0.1 Bitcoin, ie \u20ac2,000, this is business income, which Peter must declare on line 1.1.1 of the income tax return form E. Since Peter is not a sole proprietor and does not operate through a company, he cannot deduct mining expenses (computer equipment, rent, etc) from the taxable amount.<\/span><\/i><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1ed8ebe elementor-widget elementor-widget-text-editor\" data-id=\"1ed8ebe\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">It is also possible to earn passive income by staking, for which the lender receives staking rewards. The income received is interest income, which a private person also has to declare in the income tax return and pay income tax on.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">For example: Anna stakes 15 Solanas and earns one Solana as a result of staking. At the time of receiving the staking reward, one Solana costs \u20ac28. This means that Anna must declare the received \u20ac28 on line 5.6 of the income tax return as interest income. The interest received is taxed with income tax.<\/span><\/i><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-cf652d9 elementor-widget elementor-widget-text-editor\" data-id=\"cf652d9\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">While 2018 stood out with ICO (initial coin offering), 2021 and 2022 are all about NFTs. NFTs express uniqueness: often ownership of digital art, a virtual piece of land, horse, video or music. When purchasing an NFT, you should make sure what you are buying, what rights are included, etc. Tax issues related to NFTs require a case-by-case approach.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If an NFT creator sells their art as an NFT, the income they receive is a royalty, which must be declared on the income tax return as a licence fee. The fee received from every following transaction with the NFT must also be declared by the creator as a licence fee. If a natural person buys and sells NFTs to earn income from their price increases, the profit must be declared and taxed.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">NFTs and cryptocurrency are also associated with several games that operate on the play-to-earn principle. Above all, you should be careful and monitor the generation of income in games where the received NFTs or cryptocurrency can be used outside of the game, including exchanging them for regular currency or another cryptocurrency.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the case of high transaction volumes, accounting can be quite extensive and time-consuming for a private person. There are various software programs on the market that do the tax calculation for you. Many software programs allow you to select what the calculation should include. Therefore, you should always go over the settings so that the calculation process corresponds to Estonian tax laws. In order to prepare a tax calculation, it is important to keep transaction data. Transaction data can be retrieved from centralised platforms. You must also keep public keys and transaction documents. Keeping documents is important because the acquisition cost must be documented in order to calculate it. Also, you may be required to submit them to the Estonian Tax and Customs Board.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As with anything, dealing with cryptocurrency requires thinking through your activities and the obligations and opportunities they entail, as well as choosing the most suitable way and form of activity.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">A longer guide on the taxation of cryptocurrency is available on the <\/span><\/i><a href=\"https:\/\/www.emta.ee\/eraklient\/maksud-ja-tasumine\/maksustatavad-tulud\/kruptoraha\"><i><span style=\"font-weight: 400;\">website<\/span><\/i><\/a><i><span style=\"font-weight: 400;\"> of the Estonian Tax and Customs Board. If you have any questions, contact us by email at eraklient@emta.ee.<\/span><\/i><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-4b19cda3 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"4b19cda3\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-3ce7a5cf\" data-id=\"3ce7a5cf\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-4e8c727c elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"4e8c727c\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-inner-column elementor-element elementor-element-67beb3d2\" data-id=\"67beb3d2\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-614557f elementor-widget-divider--view-line elementor-widget elementor-widget-divider\" data-id=\"614557f\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span class=\"elementor-divider-separator\">\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d3dac2f elementor-widget elementor-widget-spacer\" data-id=\"d3dac2f\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"spacer.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-spacer\">\n\t\t\t<div class=\"elementor-spacer-inner\"><\/div>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-2560461f elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2560461f\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-a4edb53\" data-id=\"a4edb53\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-7b91304c elementor-widget elementor-widget-image\" data-id=\"7b91304c\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" src=\"https:\/\/www.teeviit.ee\/youth-info\/wp-content\/\/uploads\/elementor\/thumbs\/maksu-ja-tolliamet-1-rlpe09khdad35h817qeqmjz985i5l6af8dgw9j8tts.jpg\" title=\"maksu-ja-tolliamet-1\" alt=\"maksu-ja-tolliamet-1\" loading=\"lazy\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t<div class=\"elementor-column elementor-col-50 elementor-inner-column elementor-element elementor-element-4da34a3a\" data-id=\"4da34a3a\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-44510d05 elementor-widget__width-initial elementor-widget elementor-widget-text-editor\" data-id=\"44510d05\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><i><span style=\"font-weight: 400;\">Written by the Estonian Tax and Customs Board.<\/span><\/i><\/p>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Did you know that private persons have to declare and pay income tax on the income earned from the sale of cryptocurrency or an NFT (a non-fungible token)? Cryptocurrency trading, where income is generated through changes in the price of the cryptocurrency, is a common way of making money. Under the Income Tax Act, cryptocurrency [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":8073,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[513],"tags":[],"class_list":["post-8099","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-rahatarkus"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Dealing with cryptocurrency requires thinking about your responsibilities - Teeviit<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.teeviit.ee\/youth-info\/en\/dealing-with-cryptocurrency-requires-thinking-about-your-responsibilities\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dealing with cryptocurrency requires thinking about your responsibilities - Teeviit\" \/>\n<meta property=\"og:description\" content=\"Did you know that private persons have to declare and pay income tax on the income earned from the sale of cryptocurrency or an NFT (a non-fungible token)? Cryptocurrency trading, where income is generated through changes in the price of the cryptocurrency, is a common way of making money. Under the Income Tax Act, cryptocurrency [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.teeviit.ee\/youth-info\/en\/dealing-with-cryptocurrency-requires-thinking-about-your-responsibilities\/\" \/>\n<meta property=\"og:site_name\" content=\"Teeviit\" \/>\n<meta property=\"article:published_time\" content=\"2023-05-29T13:43:44+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-05-29T13:54:06+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.teeviit.ee\/youth-info\/wp-content\/\/uploads\/2023\/05\/pildid-veebi-29-1-1024x577-1.png\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"577\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Kaie Pranno\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Kaie Pranno\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.teeviit.ee\\\/youth-info\\\/en\\\/dealing-with-cryptocurrency-requires-thinking-about-your-responsibilities\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.teeviit.ee\\\/youth-info\\\/en\\\/dealing-with-cryptocurrency-requires-thinking-about-your-responsibilities\\\/\"},\"author\":{\"name\":\"Kaie Pranno\",\"@id\":\"https:\\\/\\\/www.teeviit.ee\\\/youth-info\\\/ru\\\/#\\\/schema\\\/person\\\/7820a965b0d2017f5d8946a90788adb5\"},\"headline\":\"Dealing with cryptocurrency requires thinking about your responsibilities\",\"datePublished\":\"2023-05-29T13:43:44+00:00\",\"dateModified\":\"2023-05-29T13:54:06+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.teeviit.ee\\\/youth-info\\\/en\\\/dealing-with-cryptocurrency-requires-thinking-about-your-responsibilities\\\/\"},\"wordCount\":1031,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\\\/\\\/www.teeviit.ee\\\/youth-info\\\/ru\\\/#organization\"},\"image\":{\"@id\":\"https:\\\/\\\/www.teeviit.ee\\\/youth-info\\\/en\\\/dealing-with-cryptocurrency-requires-thinking-about-your-responsibilities\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.teeviit.ee\\\/youth-info\\\/wp-content\\\/\\\/uploads\\\/2023\\\/05\\\/pildid-veebi-29-1-1024x577-1.png\",\"articleSection\":[\"Rahatarkus\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.teeviit.ee\\\/youth-info\\\/en\\\/dealing-with-cryptocurrency-requires-thinking-about-your-responsibilities\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.teeviit.ee\\\/youth-info\\\/en\\\/dealing-with-cryptocurrency-requires-thinking-about-your-responsibilities\\\/\",\"url\":\"https:\\\/\\\/www.teeviit.ee\\\/youth-info\\\/en\\\/dealing-with-cryptocurrency-requires-thinking-about-your-responsibilities\\\/\",\"name\":\"Dealing with cryptocurrency requires thinking about your responsibilities - 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