The 5 countries with the best crypto taxation

What are the best countries in terms of the level of crypto taxation?

The countries with the best crypto taxation

It is always very difficult to talk about taxation and regulations regarding digital currencies. Each country generally adopts its own specific taxation and legislation, which is often very different from country to country.

The fact that digital currencies are a relatively new and innovative product has created some difficulties in interpretation both in terms of taxation and regulation in general. However, there are countries where it is definitely more beneficial to invest in cryptocurrencies, precisely because of a tax regime that is definitely more beneficial and open to crypto investors.

Generally, most countries adopt the practice of considers profits from the sale or trade of cryptocurrencies in the same way as capital gains tax or income tax, although due to the special characteristics of storage, anonymity and privacy, it will certainly not be so easy to classify them in which type of income they should be included from the point of view of tax calculation, .

Coincub, an Irish company that specializes in analysis and reports on the world of cryptocurrency, recently conducted an in-depth analysis of exactly the different tax regimes in different countries around the world when it comes to digital assets. But it is not alone that it has put together a ranking to measure which will be the best countries in the world to date in terms of the tax regime dedicated to cryptocurrency income.

The most surprising thing from the ranking prepared by Coin Club’s experts is that after Germany, it is precisely our country that will be the one where it will be convenient to invest for a favorable tax regime, ahead of Switzerland, Singapore and Slovenia. And for a country that has always been seen as one of the most complicated and with one of the highest levels of taxation in the world, this appears to be very surprising news indeed.

Germany is among the best countries

Germany as mentioned and as found by several analyzes by specialized companies, appears to date almost as a kind of tax haven as far as cryptocurrencies are concerned. Cryptocurrencies are not completely tax-free in Germany, but they have some rather extravagant tax rules that allow in some cases to avoid paying taxes for those who invest or own cryptocurrencies in their wallets.

Germany regards Bitcoin and other cryptocurrencies as private money, not a capital asset. This is important because if you hold your cryptocurrency for more than a year, when you later sell them, the profit will not be taxed as a capital gain. Keeping cryptocurrencies in your portfolio, without selling them, is essential under German law, because cryptocurrencies held for less than a year are still taxed unless the profit is less than €600.

Another peculiarity is the tax regulation regarding the practice of staking, namely holding coins to earn money through the consensus method known as proof of stake. It is only after 1 year of storage of your cryptocurrencies that they will be tax-free in Germany.

Another country where the tax regime is secure cryptocurrencies is very favorable, is Italy, which is generally considered one of the most tax repressive states. In Italy as we know, profits are paid on cryptocurrencies only if they exceed 51,000 euros, and only in this case they must be declared in the RW framework and taxed at 26%. This is because in our country, the same regulations that have been adopted with the possession of foreign currency are used for digital currencies.

The tax system in Switzerland, Europe and the rest of the world

Also very beneficial is the tax system for cryptocurrencies in Switzerland, which has long been considered one of the most open countries to the cryptocurrency world. Some places, such as Zug in the canton of the same name, near Zurich and Lugano, in Ticino, want to become true hubs for the world of digital assets.

Another country with a very favorable tax system for cryptocurrencies is Portugal. The third most popular destination for all crypto investors is Portugal. This is a state which also has a very advantageous tax system for certain companies and categories of individuals, such as pensioners.

In Portugal, there is a law that regulates the taxation of capital gains from investments (such as for stocks, bonds, etc.), but this regulation effectively excludes the crypto world.

Outside of Europe, currently Singapore along with Dubai are some of the favorite destinations for cryptocurrency traders because not only is there no taxation of cryptocurrencies, but crypto is “welcomed” in a very favorable and benevolent way by the government itself.

Nevertheless, not only does Singapore have no capital gains taxation whatsoever, but they have even created a specific corporate form for those companies that issue and create tokens, so-called “variable capital companies.”

In Dubai, on the other hand, there has long been a new cryptocurrency regulation regulating the sector and making the Emirati city a real hub for digital assets. On the tax side, as is already the case in other sectors, there is a tax regime that does not provide for any tax payments on income from cryptocurrency.