Does mining in another country create a permanent establishment?
It can, and the reason is uncomfortably simple. A permanent establishment is a fixed place of business, and a room of mining machines abroad is a fixed place with your business equipment sitting in it. That is close to the textbook description. What decides the question is not the hardware alone but the arrangement around it: who owns the machines, who controls what they do, whether the site is yours or a third party's, and what the contract with the host actually says. Read the hosting agreement before you read the tax rules.
Is mining income business income or a capital gain?
Treat that as a separate question from everything else, because it is. Characterisation turns on what the activity is — its scale, organisation and continuity, and whether machines were bought and run with a view to profit — not on what the coin later does. Sustained mining with dedicated equipment generally looks like a business, and the coins produced are the output of it. The gain or loss on selling those coins later is a second event with its own character. Deciding the first question wrongly usually corrupts the cost base as well.
What cost base do I have in coins I mined myself?
You did not buy them, so there is no purchase price to point at. The cost base has to be established from the value of the coin at the point it was produced and brought into account, which means your pool payout records and the timing of each credit matter more than any year-end statement. Build that record as you go. Reconstructing it later from a wallet history and an exchange export is possible but slow, and the figure you arrive at is only as good as the evidence sitting behind it.
If a hosting provider runs the machines, is it still my establishment?
Not automatically, and not never. The analysis looks at substance: whether the space is at your disposal, whether you direct what the machines do, and whether the provider is an independent business selling a service to many customers or effectively operating as your arm. A bare colocation contract with a large provider points one way; a dedicated site, your own staff attending it, and your instructions governing the work point the other. The contract is evidence rather than the answer, so what happens in practice has to match it.
Can two countries tax the same mining profit?
Both can assert a right, which is why the question of whether the host country may tax the profits has to be answered on its own terms rather than assumed away. Where a treaty applies it allocates the profits attributable to an establishment in one country and provides relief in the other, but that relief is claimed on a return and has to be supported. Where no treaty applies, the domestic rules of each country stand side by side. Either way the exposure is managed by filing a consistent position in both places, not by choosing one.
Am I taxed when I mine a coin or when I sell it?
Potentially both, at different times and on different amounts. Producing the coin can bring an amount into income for the year it was produced; disposing of it later gives rise to a further gain or loss measured against the cost base established at production. That is why the characterisation question and the cost-base question are handled together. The amount taken into income on production is usually the same figure that becomes the cost base, and a mismatch between the two either double-counts the value or loses it.
Does a remote employee create a permanent establishment?
It can. One employee working from home in another country may be enough where the arrangement gives the company a fixed place at its disposal, or where that person habitually concludes contracts. Seniority and function matter more than headcount: a salesperson closing deals is a far greater risk than a developer. The exposure is corporate tax and payroll registration in that country, which is why it is worth testing before the hire rather than after. See PE risk review.
Branch or subsidiary — which should we use to expand?
A branch keeps one taxpayer: results consolidate at home, losses are usable sooner, and the exposure is that the branch is a permanent establishment whose profit the host country taxes, sometimes with a branch tax on repatriation. A subsidiary is a separate taxpayer with limited liability and local rates, at the cost of withholding on dividends home and transfer pricing on everything between them. The deciding facts are usually expected losses, liability and exit plans. See branch against subsidiary.
