As world governments push through legislation to levy taxes on capital gains from bitcoin (BTC) transactions, seeking to earn more from an asset class that frowns on regulatory oversight, there are still a few countries that remain pro-crypto, allowing investors to buy, sell or hold digital assets at zero taxes.
Circumstances vary, but the real motivation leans more toward facilitating increased investment within the respective jurisdictions cryptocurrency industries, perhaps as a base for future taxation. For now, that has not happened yet. Heres a list of eight countries in no order of importance which may be considered as bitcoin tax havens, states that dont want your BTC investment gains.
In Portugal, tax authorities waived all tax on cryptocurrency trading and transacting meaning that individuals do not have to pay capital gains tax or value added tax (VAT), when buying or selling BTC and other digital assets. The Portugal Tax Authority (PTA) said an exchange of cryptocurrency for real currency constitutes an on-demand, VAT-free exercise of services.
While citizens are under no obligation to pay income tax when exchanging crypto for fiat, the PTA, however, indicated that businesses which accept digital currencies as payment for goods and services are liable to paying taxes such as VAT and income tax. The income tax relief makes Portugals laws some of the most favourable throughout the world, given how income tax is a huge expense on the accounts of most crypto traders.
If you hold bitcoin for one year or more in Germany, you wont have to pay any taxes. Regardless of how much money you make selling your BTC, you do not pay capital gains as long as you have held your coins for a period exceeding 12 months.
Europes biggest economy regards BTC as private money, contrary to the widespread view in most developed countries, which look at crypto as currency, commodity or equity. In Germany, private sales that do not exceed 600 euros ($654) are tax-free. Businesses, however, are still obliged to pay taxes on gains emanating from bitcoin through corporate income taxes.
Both individuals and corporates who hold BTC or other digital assets as a long-term investment are not taxed in Singapore simply because capital gains tax does not exist in the city-state itself.
However, enterprises based in Singapore are liable to income tax, should they be involved in cryptocurrency trading as a core business. Those that opt for bitcoin as payment for services rendered, or revenue, are subject to normal income tax rules. Companies are taxed on the profit generated within Singapore.
As with neighboring Singapore, there are no capital gains tax in Malaysia. Cryptocurrency trades involving cash or another digital asset are not taxed in the Southeast Asian country. However, this will likely change if BTC is recognized as legal tender in Malaysia, as has been rumoured in the local press in recent months.
In the Eastern European country of Belarus, a new law that came into effect in March 2018 legalized cryptocurrency, exempting individuals and businesses from any form of taxation for dealing in or with digital financial assets in whatever way, at least until 2023.
Individual activities such as mining or buying and selling of crypto, are considered personal investments, and therefore, are not subject to tax. Similarly, registered businesses operating in the special economic zone of High Technologies Park near the capital Minsk, involved in mining, trading, initial coin offerings or other crypto-related operations are not taxed.
For Slovenia, the tax system for individuals and companies involved with BTC is rather different. While no capital gains is levied on citizens for the sale of bitcoin and other cryptocurrencies, they are still expected to pay income tax regardless of the currency being exchanged. However, companies that receive payment in BTC or from crypto mining are required to pay tax at the corporate tax rate.
The taxation of corporations depend on the circumstances of a particular case and the information provided in the declaration: income recipient status; type of income. If profits are recognized as capital gains, then the tax is 19%, say experts.
The famed blockchain island of Malta does not tax long-held digital currencies, either for capital gains or VAT. However, crypto trades executed within the day are considered similar to day trading in stocks or foreign exchange, attracting tax as business income at the rate of 35%.
Malta is perhaps one of the most crypto-friendly countries in the world, initiating legislation that has legalized a variety of crypto operations in the country. The government recognizes bitcoin as a unit of account, medium of exchange, or a store of value.
In Switzerland, one of Europes crypto havens, qualified individuals that buy, sell or hold cryptocurrencies for personal benefit are not required to pay tax on their capital gains. However, income from mining, considered self-employment income, is taxed through income tax. Profitable crypto trading by qualified professionals is subject to corporate tax while wages paid in bitcoin must be declared for income tax purposes.
What do you think about bitcoin taxation around the world? Let us know in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
- Protesters Around The World Are Putting Their Hopes Into Cryptocurrency - Forbes - June 24th, 2020
- The Benefits of Cryptocurrency Trading Crypto Benzinga - Benzinga - June 24th, 2020
- UNICEF Cryptocurrency Fund announces its largest investment of startups in developing and emerging economies - UNICEF - June 24th, 2020
- Akon City: $6 Billion Cryptocurrency City Set to Begin Construction | News - Bitcoin News - June 24th, 2020
- From Ethereum to Stellar, to Solana: Cryptocurrency Kin Confirms Blockchain Migration - CoinDesk - June 24th, 2020
- More Than 14 Million XRP Deposits Within the First Week of Listing on CoinLoan - PRNewswire - June 24th, 2020
- Market Makers Hold The Key To Success Of Early-Stage Cryptocurrency Projects - hackernoon.com - June 24th, 2020
- Jim Rogers Discusses Bitcoin as Money and Why Governments Will Stop Crypto | News - Bitcoin News - June 24th, 2020
- South Korea to Unveil Rules of Cryptocurrency Taxation in July - Finance Magnates - June 24th, 2020
- Evorese.com, a new and promising cryptocurrency exchange - PR Web - June 24th, 2020
- Accessible crypto: Will the arrival of ziglu drive new levels of cryptocurrency adoption? - FXStreet - June 24th, 2020
- Cryptocurrency: Redefining the Future of Finance - Visual Capitalist - June 14th, 2020
- A Cryptocurrency User Paid $2.6M In Transaction Fee To Send $136 Twice - Benzinga - June 14th, 2020
- CryptoMixer.bz: Bitcoin Mixer for your anonymity in the Crypto World - Yahoo Finance - June 14th, 2020
- 80% of US and European Institutional Investors Find Cryptocurrency Appealing: Survey - Bitcoin News - June 14th, 2020
- Cryptocurrency Quotes and Forecasts: Last Updates on Cryptocurrencies - FinSMEs - June 14th, 2020
- Justice Gets 15 Guilty Pleas for International Crime Ring that Laundered Money Through Cryptocurrency Exchanges - Nextgov - June 14th, 2020
- Cryptocurrency Mining Hardware Market Growth Trends, Key Players, Competitive Strategies and Forecasts to 2026 - Jewish Life News - June 14th, 2020
- Cryptocurrency Market News: Bitcoin drops to $9,100, the rest of the market follows suit - FXStreet - June 14th, 2020
- Chainalysis Partners with A&D Forensics, Expanding Access to its Cryptocurrency Investigative Tools in Africa - bitcoinke.io - June 14th, 2020
- Bitcoin: A Value Investor's Take On This Asset Bubble - Seeking Alpha - June 14th, 2020
- CashTelex Is Driving Mainstream Crypto Adoption Through Its Brand New Physical Asset-Backed Cryptocurrency CTLX - Yahoo Finance - June 14th, 2020
- Ethereum 2.0: The Choice Between Ones Own Node and a Staking Service - Cointelegraph - June 14th, 2020
- Cryptocurrency Can Become a Medicine to Treat the Challenges Caused by Covid-19 - Coin Idol - June 14th, 2020
- Binance Launches Quarterly BTC/USD Futures With Up To 125x Leverage - Benzinga - June 14th, 2020
- What Is The Future Of Cryptocurrency Going To Look Like? - About Manchester - June 6th, 2020
- Watch | What is crypto-jacking? - The Hindu - June 6th, 2020
- Regulating cryptocurrency exchanges - The Indian Express - June 6th, 2020
- HOW TO BUY BITCOIN ON THE ISLE OF WIGHT - Island Echo - June 6th, 2020
- Could Bitcoin Trading Volume Really 100X in Four Years? - Cointelegraph - June 6th, 2020
- First Mover: Bloomberg's Pie-in-the-Sky Bitcoin Call Looks Directionally Defensible - CoinDesk - June 6th, 2020
- $1.4 Billion In Cryptocurrency Stolen In The Spring of 2020 Amid Coronavirus and WoToken Scams - CryptoPotato - June 6th, 2020
- How to win cryptocurrency by playing Flappy Bird - Decrypt - June 6th, 2020
- What Is The Best Cryptocurrency Broker? - Cryptonews - June 6th, 2020
- Todays cache | Crypto-jacking, and more - The Hindu - June 6th, 2020
- Who are the distributors, traders and dealers of Cryptocurrency Market? - Fresno Observer - June 6th, 2020
- OKEx Continues Their Ongoing OKB Token Buyback - Cointelegraph - June 6th, 2020
- Cryptocurrency And Blockchain Technology Market size Reap Excessive Revenues size COVID-19 2022 - Cole of Duty - June 6th, 2020
- Will Shopifys New Cryptocurrency Partnership Widen Its Moat? - Motley Fool - June 1st, 2020
- Meet Theta Fuel, the cryptocurrency that catches world's attention - Nairametrics - June 1st, 2020
- Bitcoin founder may have just moved nearly $400,000 in untouched cryptocurrency - The Independent - June 1st, 2020
- Bitcoins $100K Probability Speculation or Economic Theory Backed? - Finance Magnates - June 1st, 2020
- Bitcoin hodl waves indicate 60% of the cryptocurrency is being hoarded analysts suggest a bull run could be - Business Insider India - June 1st, 2020
- Everything to Know about the Emergence of Prepaid Cryptocurrency Debit Cards: - PaymentsJournal - June 1st, 2020
- Africa's young population and the drive for cryptocurrency - Techpoint.ng - June 1st, 2020
- Kraken CEO: Bitcoin (BTC) Would Be Worth $1,000,000,000,000 If the Masses Knew the Power of Cryptocurrency - The Daily Hodl - June 1st, 2020
- Cryptocurrency Market Update: Bitcoin bleeding as the market gets ready for CME futures expiration - FXStreet - June 1st, 2020
- Cryptocurrency Cardano increased by 15% - The Times Hub - June 1st, 2020
- Calibras Rebrand to Novi: An Effort to Create Distance from Facebook? - Finance Magnates - June 1st, 2020
- Why Have Cryptocurrency Payments Failed to Take Off So Far? - Cointelegraph - May 25th, 2020
- What to Know About Billions' Cryptocurrency Drama If You Know Nothing About Cryptocurrency - Vulture - May 25th, 2020
- Cryptocurrency and COVID-19: Bitcoins Path to a Safe Haven - Cointelegraph - May 25th, 2020
- Bitcoin prices slip amid speculation that a block of the cryptocurrency possibly linked to creator Satoshi Nakamoto just changed hands - MarketWatch - May 25th, 2020
- Zcash's First Halving May Solve Its Inflation Problem - CoinDesk - CoinDesk - May 25th, 2020
- The Global Cryptocurrency Mining Hardware Market is expected to grow by $ 2.80 bn during 2020-2024 progressing at a CAGR of 7% during the forecast... - May 25th, 2020
- Is 2020 the year to invest in cryptocurrency? - About Manchester - May 25th, 2020
- RenBTC Quietly Goes Live in Latest Bid to Bring Bitcoin Into Ethereum - CoinDesk - CoinDesk - May 25th, 2020
- The Top 5 Cryptocurrencies to Mine  | Coin Insider - Coin Insider - May 25th, 2020
- Can Stablecoins Be the Answer to Cryptocurrency's Biggest Problem? - News Anyway - May 25th, 2020
- ZIMBOCASH Lists Cryptocurrency Token, Wants To Be Alternative To ZW$ - Technology Zimbabwe - May 25th, 2020
- Bitcoin investors are bracing for a key technical event here's what you need to know - CNBC - May 11th, 2020
- Teen Hackers Accused of Cryptocurrency Theft, Sued For $71 Mn - CISO MAG - May 11th, 2020
- Coinbase CEO Says New Cryptocurrency Bill Would Have Major Impact on Future of Finance - The Daily Hodl - May 11th, 2020
- Paul Tudor Jones calls bitcoin a 'great speculation,' says he has almost 2% of his assets in it - CNBC - May 11th, 2020
- No way around it: the irreparable damage cryptocurrency does to the environment - Green Prophet - May 11th, 2020
- Bitcoin halving explained: What is cryptocurrency event and will it boost price? - The Independent - May 11th, 2020
- Cryptocurrency Market Update: Bloodbath as Bitcoin nosedives to $8,000, Ethereum $180 and Ripple $0.1780 - FXStreet - May 11th, 2020
- Investors Who Bought iMining Blockchain and Cryptocurrency (CVE:IMIN) Shares A Year Ago Are Now Up 56% - Simply Wall St - May 11th, 2020
- Ethereum, XRP, and Litecoin Prices Wait for Bitcoins Halving - Crypto Briefing - May 11th, 2020
- Bitcoin's halving might see a large influx of investors wanting a piece of the cryptocurrency market - Mashable SE Asia - May 11th, 2020
- What is a cryptocurrency and why is it needed? - AMBCrypto English - May 11th, 2020
- Cryptocurrency Market Update: Bitcoin, Ethereum and Ripple have a bullish start to Saturday, following Fridays drop - FXStreet - May 11th, 2020
- Cryptocurrency Litecoin dipped to 12% - The Times Hub - May 11th, 2020
- Bitcoin halving, coronavirus and recession: Is an adoption surge ahead? - Verdict - May 11th, 2020
- Cryptocurrency Exchange Bityard Launched A Global Business Layout Using Singapore As Its Base - IndianWeb2.com - May 11th, 2020
- The IRS Wants to Know About Your Cryptocurrency Transactions - Interesting Engineering - May 7th, 2020
- Cryptocurrency Market Update: Bitcoin whales massively accumulating, Ethereum and Ripple commence consolidation - FXStreet - May 7th, 2020
- Rand Corporation report finds bitcoin is still the dark webs preferred cryptocurrency - Yahoo Finance - May 7th, 2020
- Cryptocurrency and the future of the automotive trading industry - Irish Tech News - May 7th, 2020
- Google Profits off Impersonations of Banned Cryptocurrency Celebs and Companies - Bitcoin News - May 7th, 2020