Crypto exchange forwards user data to the tax office

The grace period for crypto tax evaders is over. Since June, the North Rhine-Westphalian tax authorities have been evaluating a data package with information on crypto investors who have not correctly taxed their profits. This will soon become common practice. BTC-ECHO asked the NRW Ministry of Finance which users were affected.

The agency received the package as part of a “collective information request,” the ministry replies. It includes trading data from all over Germany, a “well-known and globally traded cryptocurrency”: Bitcoin.

The NRW tax authorities first viewed the material and have now distributed it to other tax authorities nationwide. The data is currently being evaluated using “newly developed software” in order to identify tax evaders.

Bitcoin.de: Around 4,000 crypto users affected

The ministry does not want to comment on specific individual cases, citing tax secrecy. Research by the Handelsblatt provide details. According to this, the data comes from the German crypto exchange Bitcoin.de from the period between 2015 and 2017. The financial administration of North Rhine-Westphalia is concentrating on users who have turned over at least 50,000 euros per year via the trading venue. About 4,000 users fell into the grid. A request to Bitcoin.de remained unanswered at the time of going to press.

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The North Rhine-Westphalia Ministry of Finance recommends that profits that have not been taxed or taxed incorrectly be declared retrospectively as part of a voluntary declaration. However, the process is complex and requires professional help, Werner Hoffmann told BTC-ECHO. Otherwise, investors would have to be prepared for a lot, the crypto tax expert continued. There is a risk of fines and imprisonment: “And of course the taxes have to be paid back, including interest.”

Data exchange soon common practice

However, the case is only the prelude to what may soon become common practice in Europe. The European Union is currently working on the “DAC-8” directive. This has already been negotiated, the only thing missing is the EU Council’s acceptance of ECOFIN, according to the Finance Ministry of North Rhine-Westphalia. With the directive, crypto exchanges and brokers will in future be obliged to report transactions to tax offices, which may share the data with each other.

“It is important that the people who trade in such cryptocurrencies know that they will not remain anonymous in the long run and that they are also aware of the tax consequences of their investments,” explains NRW Finance Minister Marcus Optendrenk (CDU).