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