German tax laws proved to be the most crypto-friendly for residents. In Italy and Switzerland, the tax policies regarding cryptocurrency assets also turned out to be loyal.
A study by crypto data aggregator Coincub identified the countries with the lowest tax rates on cryptocurrency assets for citizens.
Due to its cryptocurrency taxation policy, Germany remains the most crypto-friendly country. According to Coincub analysts, the state tops the ranking thanks to the absence of income tax for crypto holders. So, under German law, storing BTC and other cryptocurrencies is possible for citizens of the country in traditional savings accounts and doesn’t require tax payments.
The top five also includes:
- Italy. Income in crypto is tax-free if it doesn’t exceed the amount of €51,000.
- Switzerland. Individuals in the country investing in cryptocurrency are fully exempt from capital gains taxes.
- Singapore. Crypto traders pay a 22% VAT, but are exempt from capital gains tax on cryptocurrency.
- Slovenia. According to national legislation, individuals aren’t required to pay capital gains tax if they sell cryptocurrency, as profits from crypto transactions aren’t considered income.
Note that the Coincub study is based only on the taxation of individuals and residents. So the tax rates for legal entities or non-residents in some of the top five countries, such as Italy and Slovenia, remain quite high.
On the other hand, the Coincub research identified the countries with the toughest crypto taxation policies. For example, Belgium is the state with the highest rates on crypto capital gains, ranging from 33% to 50%. Iceland’s legislature levies a 40% to 46% tax on crypto profits in the country, while Israel has a 33% tax rate on cryptocurrency capital gains for all citizens. Also, the Philippines and Japan were among the top five countries with the most unfriendly tax policies on cryptocurrency assets.
Government agencies of various countries continue actively developing tax regulations aimed at regulating the cryptocurrency market. Due to their efforts, cryptocurrencies become less popular in the country or force local investors to transfer their crypto capital to more loyal jurisdictions.
