Crypto Tax Havens and some Not-So-Crypto Friendly Countries

Are you dreaming of striking it rich in crypto? If you are planning on building up a huge bag that you might want to keep away from the tax man, it is never too early to start thinking about moving to a crypto tax haven. But which one is right for you? No matter where you are, a crypto tax haven is not too far away.

In the United States, there is a move for the government to regulate crypto and if you have gains here the IRS will come looking for you. This is also true of some European countries, but not all. While 2022 may not end well in terms of gains, who knows what the future holds. Whether you live in the US or some other country that might not be too crypto friendly, it never hurts to have some options when the time comes so let's explore a few options...

El Salvador

This small Central American country might be one of the first to come to mind as it has been in the news a lot the last year with a shift in the economy over to Bitcoin. President Nayib Bukele has lead the charge to make his country adopt Bitcoin and one of the first in the world with BTC serving a legal tender. With no taxes on cryptocurrency capital gains, El Salvador is sure to attract crypto whales to its shores. Who wouldn't want to live in Bitcoin City?

Also in Central America, Panama has no taxes on capital gains and just happens to be personally one of my most favorite countries to visit. Panama City is a vibrant financial hub and the Panama canal connects the Atlantic to the Pacific. I've spent quite a bit of time in Bocas Del Toro, a group of many islands in the Northeastern side of the country.

Looking more for the island lifestyle in the Caribbean? Check out the the Bahamas, Bermuda, the Cayman Islands and Puerto Rico as tropical paradises where you will keep more of your coins. Many US residents who've made it big in crypto have relocated to Puerto Rico as you don't even need a passport to travel there.

Portugal

This southern European country offers some nice tax incentives for crypto enthusiast. While you will pay taxes on income generated from crypto, you will not owe taxes on capital gains made from crypto or on trading. The country has a Visa program that lets non-European Union citizens to qualify for residency while offering a passport to crypto investors as well. The countries Meia Praia Beach has been dubbed Bitcoin Beach. How does Lisbon tickle your fancy?

Singapore

One of the biggest financial hubs in all of Asia, Singapore is a well established crypto center and holds the largest percentage of crypto owners amongst its population. There are no taxes on crypto gains so cashing in here might be a good option for you. Home to big exchanges like Binance, Singapore also doesn't charge taxes for goods and/or services that are paid for in crypto. If you are looking to build a crypto start-up, Singapore might also be a great choice with their crypto business tax incentives and a workforce that is already quite familiar with cryptocurrency.

Central African Republic

The CAR is in the midst of implementing a project that they believe will make the country a crypto hub in the African continent. The country has crypto friendly tax laws towards capital gains, income tax and commercial taxes. Other African countries with favorable crypto environments include South Africa and Nigeria.

Germany

One of the leading economies in Europe is moving to a crypto friendly environment. If you HODL crypto for a year or more, you will pay no capital gains. The progressive country even lets you hold Bitcoin in a traditional saving account. In fact, according to CoinHub Germany is the top country for crypto for residents. 

Besides Germany, Europe also boost Italy ranked second overall and Switzerland ranked third overall making it a crypto friendly continent for many crypto investors.

Other Crypto Friendly Countries:

Belarus, Slovenia, Lichtenstein, Malta, Gibraltar, Malaysia, Taiwan and the United Arab Emirates are also known to have positive crypto policies.

Non-Crypto-Friendly Countries:

As for countries where you are likely to pay heft on your crypto, CoinHub has the five worst listed as:

• Belgium (5) - gains taxed at 33% unless they are consider income when it jumps to 50%

• Iceland (4) - up to $7K gains taxed at 40%, after that you pay 46%

• Israel (3) - capital gains taxed at 33%, if seen as a business you pay 50%

• The Philippines (2) - no taxes up to $4,500, but 35% after that and new taxes in the works

• Japan (1) - $1,500 is tax free, but 5-45% sliding scale after that

So if you live in any of these countries, it might be time to start exploring new options when the market rebounds along with your capital gains. With crypto regulations heating up all over the world, it will pay to stay on top of the places where your crypto will go the farthest.