Top 8 Crypto-Friendly countries in terms of tax and regulation

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2 years ago
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  1. El Salvador

  • Regarding legislation that is favorable to cryptocurrencies, El Salvador is without a doubt king

  • El Salvador passed a law in 2021 making Bitcoin legal tender

  • As a result, you can use Bitcoin to pay for goods and services there just as easily as you can with US dollars

  • As a result, Bitcoin is not subject to income or capital gains taxes in the nation

  • Despite harsh criticism from well-established financial institutions, it also intends to keep its reputation as a cryptocurrency hub by constructing the first Bitcoin City in the world

2. Singapore

  • Singapore is another well-known nation that welcomes cryptocurrency

  • The South-East Asian nation does not impose a capital gains tax or a tax on goods and services purchased with cryptocurrency

  • On income from cryptocurrency-related activities like staking, there is an income tax, though

  • Additionally, Singapore’s financial regulators are somewhat accommodating to virtual currencies, allowing cryptocurrency businesses to operate without a license for a grace period of six months

3. Portugal

  • One of the most well-known nations that support cryptocurrencies is Portugal

  • Portugal taxes cryptocurrency income, but there are no capital gains taxes or trading taxes

  • Additionally, through investments, non-EU nationals can become eligible for a residency permit and eventually a passport through Portugal’s Golden Visa program

  • However, you can’t stay in Portugal for longer than 183 days a year if you want to apply for the Golden Visa and avoid becoming a tax resident

  • One of the factors contributing to Portugal’s rapid rise in industry popularity, with Lisbon emerging as one of the continent’s major hubs, is its tax-free lifestyle for cryptocurrency investors

4. Malta

  • Due to its acceptance of cryptocurrencies as a “unit of account, medium of exchange, or store of value,” Malta is another well-liked location for cryptocurrency

  • When the nation passed a law in 2018 governing distributed ledger technology, cryptocurrencies, and blockchain, it became a haven for initial coin offerings

  • Cryptocurrency trading in Malta is subject to a tax of up to 35%, but depending on your tax bracket and financial situation, you may be able to reduce that to 0% to 5%

5. Puerto Rico

  • Since Puerto Rico is treated as a separate country for tax purposes, it is a favorite vacation spot for North Americans

  • Therefore, if you purchased cryptocurrencies while a tax resident, there is no federal income tax in Puerto Rico and no capital gains tax

  • However, the IRS will tax any cryptocurrency you bought before relocating to Puerto Rico and establishing a residency

6. Switzerland

  • Switzerland is a well-known crypto hub, particularly in Zug, and Lugano is emerging as a second crypto-friendly city with plans to accept cryptocurrency as payment for taxes

  • While there are no capital gains taxes in Switzerland, there is an income tax on mining and a wealth tax based on an individual’s net worth

  • Additionally, profits from trading professionally are taxed

7. Slovenia

  • Despite ICOs being subject to taxation, the tiny Alpine nation has the highest market capitalization of blockchain projects per resident

  • Additionally, mining income is subject to a 25% income tax for Slovenian tax residents, but there is no capital gains tax

8. Germany

  • German law, which defines cryptocurrencies as private money rather than financial assets, makes tax optimization relatively simple

  • Capital gains tax is not due on cryptocurrency sales or holdings that have lasted longer than a year

  • Digital assets that have been held for less than a year and have generated gains of more than €600 are taxed

  • Furthermore, despite the fact that cryptocurrency staked for ten years becomes tax-free, Germany taxes income from mining and staking

REFERENCE

  1. https://coinmarketcap.com/alexandria/article/the-most-crypto-friendly-countries-in-2022

DISCLOSURE:

None of these articles constitutes financial advice. Articles are highly summarised to make it easy for the reader and save your time, so please DYOR further before putting your hard-earned money into any product mentioned.

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