Posted On 27.07.1979
These days the Finnish bittiraha bitcoin scene mostly remains in the shadows, with only occasional news and a few startups being known to community. However, thanks to favourable bitcoin regulation and early bitcoin adoption, the homeland of Nokia can be also a great starting point for cryptobusinesses. We tried to figure out what’s happening in this nordic country with the help of Martin Albert from Bitalo and Henry Brade from Prasos. Back in 2013, Finnish tax authorities released a special instruction for cryptocurrency taxation.
The gains were to be taxed as capital gains or income gains. The capital gains approach, according to the instruction, is usually applied to trading and investment activities. BTC spent is calculated at the time of spending, and the cost of acquiring them is determined by when they were bought’ and losses were not tax-deductible. When someone obtained coins via mining, the authorities planned to use regular income tax approach. The value of coins had to be counted at the current exchange rate.
However, in November 2014, almost one year before the European High Court’s ruling, Finnish regulators classified bitcoin as a VAT-exempt financial service. Thus, it is much easier to do bitcoin business in the country now. Finland and all Nordic Countries are well known for big government, high state quotas, and high taxes. People here love the state and people even love to pay taxes, also because corruption is a bit lower than in other parts of the world. There is no real cash economy, even smallest purchases are paid with credit card. Bitcoin is more approached from the technological side or intellectual side and not so much used to solve actual day to day problems. However, surprisingly the state here is very relaxed about bitcoin and as far as regulation is concerned, there do not apply any special rules for handling bitcoin.
There is no special banking license required and there are no special KYC rules. There are still some concerns about EU-wide regulation rules, though. In terms of regulation we are concerned about the upcoming changes in EU cryptocurrency regulation. That may harm our business in some areas. In Finland, the regulation is currently very low which is a big benefit. In terms of taxation, there have been problems, the tax administration is very eager to tax all Bitcoin-related activity as much as possible. What Is The State of Finnish Bitcoin Industry and Community?
The Bitcoin Industry is actually quite healthy here thanks to many interesting factors. Finland is a cold and dark country in the North of Europe and the country has been isolated for a very long time: In the east was the iron curtain, in the north was only ice and snow, the west had more or less similar kind of welfare states and in the south is the Baltic sea. The other major places to buy and sell cryptocurrency in the country are bitcoin portal Bittiraha and Coinmotion exchange. We could not find any evidence of full-fledged cryptocurrency mining in Finland, probably because the electric power is too expensive there. Currently, I’m not aware of any large miners.