--- title: Declaration of income received in virtual currency date: 2019-01-18T13:43:51Z modified: 2024-05-30T10:49:28Z permalink: "https://grow.ee/virtuaalses-valuutas-saadudud-tulu-deklareerimine/" type: post status: publish excerpt: "" wpid: 5828 featured_image: "https://grow.ee/wp-content/uploads/2019/01/Virtualses-valuutas-Bitcoin.png" timestamp: 2024-05-30T10:49:28Z tags: - Taxes --- Income received in virtual currency, including bitcoin (profit from the transfer of assets, salary income, business income), is taxed on similar principles as income received in traditional currency. When taxing income, the purchase and sale price of virtual currency or the income received must be converted into euros based on the exchange rate (market price) of the virtual currency that was in effect on the date the income was received or the expense was incurred. ## If you receive income from a change in the price of virtual currency, by buying and selling/exchanging virtual currency, according to the [Tax Board's guidelines](https://www.emta.ee/eraklient/maksud-ja-tasumine/maksutatavad-tulud/kruptoraha), you must declare it like any other asset, i.e. the profit from the purchase and sale price is taxed. All income is declared in Estonia in euros. It seems simple at first, but there are more nuances here. If you do not convert virtual currency into so-called "real money", but constantly buy and sell something, then it behaves more like "real money". In this case, it can be very difficult to identify profit and the Tax Board does not have clear instructions. Since virtual currency is considered an asset within the meaning of the Income Tax Act, losses from it are not taken into account for taxation. These losses are borne by the person themselves, but income tax must be declared and paid on the profit. ## If you receive payment for work performed in virtual currency, the Estonian employer must convert the salary paid in virtual currency into euros based on the market price and withhold and pay labor taxes from the salary paid. This is declared by the accountant and does not entail additional tax liability. According to the Tax Board's instructions, "The use of income received in virtual currency that has already been taxed as salary to purchase various goods or services no longer entails additional tax liability." What can be interpreted is that if the exchange rate of virtual currency increases and this virtual currency is used to purchase goods and services, then income tax does not have to be paid on such exchange rate gains. ## We help find the best solutions No matter what the laws currently in force are, specialists in their field can still find a solution to every problem. Accounting firm Grow is focused on using innovative solutions and **we are no strangers to thinking outside the box**. If you have any special requests that seem complicated at first, [contact us](https://grow.ee/wp-content/uploads/wp-mfa-exports/page/kontakt.md) and we will find a solution together.