Should earnings in Bitcoin converter to a traditional currency be treated as trading income or non-trading income for tax purposes (for example, in Ireland)? Reason for them being considered trading income is that the Bitcoins need to be sold at an exchange like a commodity. On the other hand, a business gains Bitcoin not necessarily through trading them for goods (say, SatoshiDice), so the other option appears viable.

Which approach should be taken into consideration when figuring out taxes?

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    I don't think you could make a universal rule about how businesses using bitcoins would be treated any more than you could make a universal rule about how businesses using the euro would be treated. – Nick ODell Feb 4 '13 at 17:11

You might not like this answer but the correct approach for figuring out taxes related to Bitcoin earnings is to ask the question to your local tax authority, in written form and get an answer that your local tax administration legally commits to.

I can speak only for France, but I assume the same kind of thing is possible anywhere. In France you can ask for a "rescrit" it is a written answer from the FISC (our tax authority). Once they gave you an answer they are legally obliged to stand by it.

There is no other correct way to account for your Bitcoin taxes than asking the people that actually can give you a definitive and legally binding answer.

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    Omg that rescrit is so a logical, honest and straightforward thing, it is really a pain not to have it... – o0'. Feb 5 '13 at 22:57
  • @Lohoris, until it can be forged – Pacerier Nov 26 '13 at 2:40
  • @Pacerier no point forging it, they know if they have written it or not. – o0'. Nov 26 '13 at 8:47

In the USA, Bitcoin earnings are treated like property. The full announcement is here:

Virtual Currency Is Treated as Property for U.S. Federal Tax Purposes; General Rules for Property Transactions Apply IR-2014-36,

March. 25, 2014 WASHINGTON —









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