Only 0.53% of investors paid crypto tax in 2022, study shows
A new research report conducted by Sweden-based technology company Divly has found that only 0.53% of investors declared and paid crypto tax in 2022 globally.
What makes this new research report stand out is that it took a rather unconventional approach to calculating the tax payment rate. In particular, it relied on a mix of official government figures, global crypto ownership statistics and search volume data as opposed to surveying a limited number of respondents.
In India, the government has imposed a 30% tax as well as 1% TDS on cryptocurrency in 2022, but the report concluded that only a very small amount of investors (0.07%) declared and paid tax on crypto in 2022 in the Asian country. . At the extreme ends of the spectrum, compliance rates were lowest in the Philippines at 0.03% and highest in Finland at 4.09%.
Australia took second place with 3.65% of investors declaring and paying crypto tax, while in the US, which hosts the world’s largest number of cryptocurrency users, the crypto tax payment rate was just 1.62%, slightly below Canada, where 1.65% of investors paid its crypto treasure.
In Austria, 2.75% of crypto investors declared and paid cryptocurrency tax, with a similar figure of 2.61% present in the UK.
The methodology behind the Divly report was called questionable by publications such as cointelegraph, as the report itself noted that search volume data may not accurately reflect the actual number of crypto-tax payers, as not all tax payers search for crypto-tax-related information online.
What is the reason for this low rate of crypto tax payments?
According to Divly’s report, public awareness of cryptocurrency reporting requirements differs in each country, and some users are simply unaware of their tax obligations. The higher compliance rates observed in countries such as Japan and Germany were a result of increased government enforcement, resulting in greater availability of tax calculators and other tax services.
As for the US, the country may also see a boost in crypto tax payments in 2023 according to Indiatimes.com. The Divly study highlighted US President Joe Biden’s plans to introduce changes to crypto taxation in a new 2024 budget plan.
These changes could potentially target money laundering and introduce a new tax on electricity for Bitcoin mining. As a result, as the government keeps a closer eye on the crypto industry, more investors may feel obligated to declare their crypto holdings in the future.
