OK, I have to correct and extend my first answer. It is wrong :)
As a physical person you find yourself in one of the following three situations:
- you are being paid in crypto -> the fiat value at the day of payment is added to your income report
- you sell crypto at the exchange for fiat -> this value does not go into your tax report
- you mine crypto -> the fiat value at the day of payment / capital gain is added to your income report
The question in our case is -> is income on Steem considered payment for a service, a mining operation or anything else :) I don't know.
Tax inspector might see it as an income. They tend to be biased in this way :)
About the rate of the taxes. There is a system with 5 classes and you pay progressive taxes according to the class you fall in after you add all your income and deduct all your bonuses.
I think that the second class is most common with upper income limit after deduction of bonuses being 20,400.00 €. You would pay 1,283.41 € + 27 % above 8,021.34 € of income.
Would pay because after the tax amount is established as above, your monthly tax payments are deducted and thus the final amount is reached. You might actually get some money back if you were paying too much with your monthly sallary payments :)
It is not so complicated as it looks. And the software takes care of it. Our IRS does the report for you and you only add to it if some income is missing or when you find some bonus not accounted for. Pretty straightforward process ...
I am sorry that this lengthy explanation doesn't help a bit with your original question :)
Haha, no problem. I appreciate different perspectives on the matter, as still trying to piece together the optimal accounting strategy. :-)
I talked to a lawyer last week, and we kinda came to the conclusion that anything earned on Steemit would pretty much be considered income. However, there may be some room for creativity in its accounting - because as half is paid in Steem Power, that might not technically be considered taxable - until a Power Down is initiated and you receive the actual Steem.
Of course, that could get seriously fucking complicated to fully record, especially if one weren't to do a full 100% Power Down.
I'm simplifying it in my case, documenting SBD received as income - and deferring the Steem (Power) until a Power Down is initiated next year or the year after. As the Power Down I currently have going was started last year - and I was living in Indonesia, thus no taxes filed last year - those Steem distributions could be considered capital gains - if I were to cash them out direct. Though with the conversions between different cryptos and capital gains/losses not actually realized until into fiat... headaches.
Well at least for now, I've got a simplified solution that should suffice.
I am happy with this simplification too.
I would simplify it further. I would say that you actually get your Steem / SBD income when you transfer it to your bank account and then report it in its fiat value.
The other question is, at least according to Slovenian tax laws, what happens when you don't exit Steem to fiat and go to exchange with it to buy BTC.
No, tax inspector would argue that any exit from steem is considered an income.
Eh, complicated ...
OK, enough for now. Thanks for reading my excursions into the fascinating world of crypto taxation :)
I am doing this for selfish reasons. Sooner or later I would have to do this exercise myself. For now, I am ignoring the issue...