Which countries are the worst when it comes to cryptocurrency taxation? A new study lists the top five
Cryptocurrency analytics company Coincub has published a cryptocurrency tax ranking, pointing out the worst and best countries in terms of cryptocurrency tax reporting.
Cryptocurrency taxation laws vary significantly between countries, and some jurisdictions have arrived at extremely harsh cryptocurrency taxation policies for their residents.
In a new study by cryptocurrency analytics firm Coincub, Belgium is the worst country in the world in terms of crypto taxes for its residents. That’s according to internal rankings that cover fiscal aspects such as taxes on cryptocurrency income or capital gains from cryptocurrencies.
Belgium is known for its massive 33% capital gains tax on cryptocurrency transactions, and also withholds up to 50% tax on professional income from cryptocurrency trading. As we told you earlier, Belgium adopted strict cryptocurrency tax rules in 2017.
Published on Thursday, Coincub’s tax ranking also brings up countries such as Iceland, Israel, the Philippines and Japan as the least favourable places for crypto investors.
In Iceland, any cryptocurrency gains up to USD 7,000 are subject to a tax rate of less than 40%, while larger gains will incur 46%, the report notes. In Israel’s tax regime, the sale of cryptocurrencies is normally subject to capital gains tax, which is as high as 33%. On the other hand, if cryptocurrency trading involves corporate income tax, it can be as high as 50%.
In the Philippines, there is no tax on any cryptocurrency income below USD 4,500, but after that, any income is taxed at up to 35%. The country’s government has also been discussing new taxes on cryptocurrencies by 2024, raising fears that Manila could follow India’s example and impose a flat 30% tax on all cryptocurrency income.
Japan closes out the top five worst countries for cryptocurrency taxation for residents in Coincub’s ranking. The country has a progressive tax rate system for income considered as miscellaneous income. The tax rate varies between 5% and 45%, depending on the amount of total earnings.
Among other strict crypto-tax economies, Coincub also mentioned countries such as India, Austria, the United States, Norway, Denmark and France.
On the other hand, the study pointed out a number of countries that offer tax incentives to citizens and have much more favourable cryptotax policies. According to the ranking, Germany tops the list as the best place for crypto-investors, as anyone holding cryptocurrencies for a minimum of one year will not incur any capital gains tax when selling or converting their cryptocurrencies. Other crypto-tax-friendly countries include Italy, Switzerland, Singapore and Slovenia.
In addition, Coincub mentioned classic tax havens or countries that offer foreign companies and individuals minimal or no tax liability for their financial deposits, where cryptocurrencies are no exception. Among them, the study listed the Bahamas, Bermuda, Belarus, the United Arab Emirates, the Central African Republic and Lichtenstein, among others.
Coincub highlighted that crypto-taxation changes very quickly, as new regulations are produced on a regular basis. The firm also noted that there are an increasing number of countries that apply flat tax rates on profits for individuals, with the aim of simplifying tax-taking.
Source: Cointelegraph
Disclaimer: The information set out herein should not be taken as financial advice or investment recommendations. All investments and trading involve risk and it is the responsibility of each individual to do their due diligence before making any investment decision.