Crypto Tax Compliance Astonishingly Low: Only 0.53% Of Investors Declared Crypto In 2022, According To Study

STOCKHOLM, April 4, 2023 /PRNewswire/ — A study of European cryptocurrency tax calculator Divly estimated which only 0.53% of cryptocurrency investors declared their cryptocurrency activity to their local tax authorities in 2022. However, tax payment rates varied considerably from country to country, with Finland with the highest rate at 4.09% and The Philippines records the lowest at 0.03%.

IN the United Statesan estimated 1.62% of cryptocurrency investors declared their crypto holdings to the tax authorities in 2022, placing the United States in 10th place among the 24 countries analyzed. Other countries with relatively high tax payment rates included Australia (3.65%), Austria (2.75%), Germany (2.63%), and Great Britain (2.61%).

The study looked at the total number cryptocurrency investors who have declared taxes, but who do not claim that everyone who invested in cryptocurrency were required to pay taxes.

Historical trends in Cryptocurrency Tax compliance

Historical trends show a steady increase in cryptocurrency tax declarations. In 2015, less than 900 US citizens reported crypto according to United States District Court, while 5.9 million Coinbase accounts were active. By 2018, declaration rates increased to 0.8% based on data from Credit Karma. The current study estimates that 1.62% of US investors filed taxes in 2022, doubling since 2018, but compliance remains low.

Deviations with survey-based studies

While this study presents a comprehensive analysis of global cryptocurrency tax compliance, it is worth noting that the findings differ from the results of several survey-based studies. These discrepancies can be attributed to differences in methodology and potential biases in survey data.

Survey-based studies in the USA

Cointracker conducted a survey in 2022 that showed 4% of the US cryptocurrency investors had reported their cryptocurrencies at a time when 40% of individual returns had been filed. This figure is significantly higher than the 1.62% estimated by the current study. Similarly, a Coinledger survey in 2021 indicated that more than 50% of respondents declared that they crypto inventory on the tax return.

Factors identified that may contribute to discrepancies in compliance rates between the study and previous surveys include potential overestimation due to respondents’ unwillingness to admit non-compliance, and self-selection bias, which results in skewed data from different participant choices.

Future prospects

Tax payment rates for cryptocurrencies may improve as countries implement new regulations and improve enforcement, such as the EU’s proposed changes to the Directive on Administrative Cooperation (DAC).

The report highlights the current state of cryptocurrency tax compliance worldwide and underlines the need for improved regulation and enforcement. As cryptocurrency As the landscape continues to evolve, it will be critical for governments and tax authorities to adapt and ensure that the growing number of investors are adequately informed about their tax obligations.

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SOURCE Divly