Which countries are worst for crypto taxation? A new study shows the top five

Global cryptocurrency taxation rules vary significantly between countries, and some jurisdictions have come up with extremely harsh crypto tax guidelines for their residents.

In a new study from the crypto analysis company Coincub, Belgium is referred to as the worst country in the world when it comes to crypto taxation for citizens. It is according to internal rankings that cover tax aspects such as taxes on crypto income or crypto capital gains.

Belgium is known for its massive 33% tax on capital gains on crypto transactions, and it also withholds up to 50% in tax from professional earnings on crypto trades. As previously reported, Belgium adopted strict crypto taxation rules back in 2017.

Released on Thursday, Coincub’s tax rankings also list countries such as Iceland, Israel, the Philippines and Japan as the least favorable places for crypto investors.

In Iceland, all crypto winnings up to $7,000 are subject to a 40% tax, while larger winnings will attract 46%, the report notes. Under Israel’s tax regime, the sale of crypto is usually subject to capital gains tax, which is up to 33%. On the other hand, if crypto trading involves a corporate income tax, it can go as high as 50%.

In the Philippines, there is no tax on crypto income below $4,500, but after that any income is taxed at up to 35%. The country’s government has also discussed new taxes on crypto by 2024, raising concerns that Manila could follow India’s lead and impose a flat 30% tax on all crypto income.

Japan closes out top-5 worst countries for crypto taxation for residents in Coincub’s rankings. The country has a progressive tax rate system for income that is considered miscellaneous income. The tax rate varies from 5% to 45%, depending on the amount of total profit.

Among other strict crypto tax economies, Coincub also mentioned countries like India, Austria, USA, Norway, Denmark and France.

On the other hand, the study pointed to a number of countries that provide tax-efficient incentives to citizens and have much more favorable crypto tax policies. According to the ranking, Germany tops the list as the best place for crypto investors, as anyone who holds cryptocurrency for a minimum of a year will not incur capital gains tax on selling or converting their crypto. Other crypto tax friendly countries include Italy, Switzerland, Singapore and Slovenia.

Related: Australian Treasury consults the public on the tax exclusion of Bitcoin foreign currency

In addition, Coincub mentioned classic tax havens or countries that offer foreign businesses and individuals minimal or no tax liability for their financial deposits, where crypto is no exception. Among these, the study listed the Bahamas, Bermuda, Belarus, the United Arab Emirates, the Central African Republic, Lichtenstein and others.

Coincub emphasized that crypto taxation is changing very quickly as new regulations are coming regularly. The firm also noted that there is an increasing number of countries applying flat tax rates to gains for individuals, with the aim of simplifying the tax rate.