Less than 1% of Crypto Investors Reported Their Taxes to Government (Study)
According to a study by Swedish tax firm Divly, only 0.53% of cryptocurrency investors globally paid tax on their trades last year.
The average percentage of people who follow the rules varies in different countries. For example, over 4% of Finnish investors have paid taxes, while only 0.03% of those in the Philippines have.
The trends worldwide
Divly explored 24 nations to find out what proportion of people in each area declared their cryptocurrency trading to the relevant authorities and paid appropriate taxes in 2022. Finnish investors appear to be the strictest, with 4.09% deciding on tax policy . Finland also had the highest payment rate in Europe, while Italy was at the bottom with 0.26%.
One reason to explain the numbers in the southern European country could be the fact that Italians had to declare their crypto only if their holdings were worth more than €51,645 (around $56,000). The budget for 2023 has planned certain changes in this field, which may lead to a reduction of the threshold.
The Philippines is the country with the lowest payment rate in the world, at just 0.03%. Lawmakers give locals a 35% tax, but only if their income from trading digital assets exceeds $4,500.
The US – the nation with the most cryptocurrency taxpayers – saw 1.62% of investors comply, while its northern neighbor – Canada – marked 1.65%.
Japan was the Asian country with the highest tax payment rate at 2.18%. Singapore was second on the continent with 0.65%.
The analysis revealed that nearly 95.5% of global cryptocurrency traders had not paid their taxes by 2022. However, Divly believes that the numbers could improve as governments introduce changed regulations and seek better enforcement.
Some of the Crypto Tax Heavens
According to another research conducted by Coincub, Europe’s leading economy – Germany – has the best crypto tax legislation. Ministry of Finance revealed last year that it will not tax private individuals when selling bitcoin or ether if they have held the assets for over a year. Before these changes, digital currencies had to be held for ten years to be exempt from taxation.
Italy came second, while Switzerland (where legislation varies in each canton) came third. However, most provinces in the Alean nation do not require citizens to pay taxes on crypto.
Singapore and Slovenia rounded out the top 5. While residents of both countries are currently exempt from crypto taxes, Slovenians may be hit with a 10% rate in the future.
