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Can I trade Bitcoin and cryptocurrency in Finland?
Introduction Bitcoin and crypto trading in Finland
Finland rises as a serious crypto and blockchain advocate. Its long tradition of pursuing high-value tech innovation – think Nokia – helps it punch well above its weight. Crypto is no exception. The country rates highly its number of blockchain-based organizations and ICOs, especially those devoted to environmental causes. The country’s financial institutions take a very positive stance on crypto, providing unhindered guidance and services to potential crypto investors. All of its virtual currency service providers (VASPs) are required to register under FIN-FSA, which is the regulatory body of cryptocurrency providers. The country also rates highly for having over 20 of the all-important Bitcoin nodes situated within its borders.
The EU’s proposed Markets in Crypto-Assets Regulation (MiCA) is providing a wider regulatory framework for European Union members, covering money laundering principally and also the regulation of entities and individuals providing crypto-related services that are not covered in existing legislation. Crypto-assets are also regulated independently of the EU through the Finnish Financial Supervisory Authority which acts as the registration authority and supervisory authority for crypto-assets and related services under the Finnish Act on Virtual Currency Providers. The Finnish Virtual Currency Act regulates VASPs. These include bodies that issue virtual currency, crypto exchanges, and the providers of wallet and custodial services. Any entity involved in providing cryptocurrency services in Finland must register with the FIN-FSA – with some exceptions. Source: https://coinpanda.io/guides/crypto-taxes-finland/
Oh yes, you’ll be taxed on your Bitcoin gains, whether as a professional or casual trader, and your earnings from buying and selling will come within capital income and subject to Capital Gains Tax. The capital gains tax rate is 30% for capital income not exceeding €30,000 – and 34% on the excess above this limit.
Bitcoin and cryptocurrency trading in Finland
The crypto economy in Finland is open and progressive, with a positive outlook toward cryptocurrency and blockchain. Spending your crypto, however, is not that easy. There are few directly participating stores and outlets. Some global brands available in Finland accept Bitcoin, such as Microsoft and Gyft. Otherwise, options for spending include crypto debit cards that convert crypto to fiat.
Finland has access to all the leading exchanges. The population in general shows high volumes of trading, and many hold cryptocurrency. Finland’s Financial Supervisory Authority (FIN-FSA) regulates the cryptocurrency sector. This includes all crypto exchanges, crypto deposit providers, and cryptocurrency issuers operating in the country.
Crypto investment gains are taxed as capital income. The profits you make from trading are usually taxed in two cases: when you cash out, and when you use crypto to buy stuff. Sometimes, exchanging one type of crypto for another (eg BTC for ETH) is taxable as well.
No matter what, you need to declare your gains to the Finnish Tax Administration. Documenting all transactions is an absolute must. Any good exchange should be able to provide your transaction records to you.
In Finland, crypto is VAT exempt. Tax is only due for the gains from online trading. Crypto is taxed when it is exchanged (eg BTC to ETH), traded, or used as a form of payment.
There is good news – holding the cryptocurrency for 12 months or more may provide a discount. If you sell your crypto at a loss, you’ll make a capital loss. This can offset the capital gains made in the same year or a later year, possibly lowering your tax bill.
Finnish Bitcoin mining regulations
Thinking of mining crypto? It’s a highly technical and expensive activity at the best of times, but it is perfectly legal in Finland. Remember – mining requires lots of energy, and your hard-earned mining gains are taxable.
Finland’s financial outlook on crypto
A huge crypto research program is underway in Vietnam after Vietnam’s Ministry of Finance initiated an in-depth study of cryptocurrencies, with a view to achieving legislative reform for the industry. With much about crypto still illegal – such as buying products and services with it – it is no surprise that the financial establishment is looking for guidance. However, as yet the conclusions of the study and any proposals and recommendations are not forthcoming. We hate to say it again but….watch this space
Cryptocurrency is a big investment play among an increasing amount of the population. That said, most organizations that offer long-term financial planning consider crypto too risky. Despite positive attitudes from the government, traditional long-term investment organizations may steer clear. It is likely that any investment plan would probably carry higher fees due to the higher risks involved.
Finland’s financial outlook on Bitcoin and the crypto economy
Finland is no stranger to the cutting edge. The country has a developed IT and fintech economy. Finland is also where the Nokia headquarters are located. You can thank the Finns for all those dearly departed, neat little mobiles when people used to actually talk to each other. Gone, but not forgotten. There seems to be a positive attitude toward blockchain tech. The Finnish Tax Authority is enthusiastically issuing lots of guidance on taxation.
The Finnish customs authority once sold off nearly 2,000 Bitcoins seized in criminal investigations – that’s a lot of cell phones. The country’s central bank, however, views cryptocurrencies as high-risk assets – not real money.
The financial establishment remains conservative in advocating crypto services. Government agencies and the financial regulator are warning consumers about price volatility and risks.
Finland and Defi
Central banks around the world are all investigating digital currency, and Finland is definitely on board. Many start-ups are looking at deploying decentralized technology across a range of sectors, not all of them financial.
Defi’s future within the Finnish national economy is still debatable. It’s unlikely to play a big role any time soon.
Crypto regulation in Finland
Cryptocurrency-based firms operating in Finland are required to register with FIN-FSA. Most legislation comes within the fifth EU Directive on fighting money laundering. Crypto related services have to comply with laws related to a company’s reliability, and protection of client funds. Cryptocurrency providers that do not comply with statutory requirements cannot pursue business activities. Providers must comply with Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regulations.
On an individual level, you will have to offer up personal details. Crypto trading is no longer an anonymous activity, contrary to some misconceptions. Protecting your crypto against loss or theft requires that you check the security record of the services. Remember – personal protection against loss is not covered. Some exchanges do have insurance against fraud or hacking, but it is up to you to vet products and exchanges.
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