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Top Destinations for Tax-Free Crypto Gains

Last updated 25th May 2022
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Cryptocurrencies have taken the world by storm and many new millionaires and even billionaires have been minted in the past year or so.

Naturally, countries around the world have taken varying stances when it comes to the legality of digital assets.

While some have outright banned virtual currencies, other countries have decided to allow cryptocurrency trading and opted to tax the activity instead.

Notably, tax liability remains a major source of concern for crypto investors as the tax-filing process has been deemed too complicated by many.

A number of countries have implemented friendlier tax legislation in a bid to attract crypto entrepreneurs and businesses.

In this article, we have created a list of the friendliest countries in the world when it comes to crypto taxes.

Portugal Crypto Tax Laws

Tax authorities in Portugal have adopted a soft stance when it comes to cryptocurrencies. Since 2018, all proceeds from the selling of crypto assets are considered a tax-free activity. This includes crypto trading as well as it is not deemed to be investment income either. As long as you’re not a business, your crypto holdings are exempt from VAT and Income Tax as well.

It is reported, however, that the government is waiting for amendments to the existing laws so it's worth keeping track of these developments if they affect you.

Switzerland Crypto Regulation

For centuries, Swiss banking has been known for its high levels of privacy and low levels of risk. It perhaps comes as no surprise that the country has also opted for lenient regulation on cryptocurrencies. Notably, however, each of Switzerland’s 26 cantons has its own laws regarding cryptos.

In Zurich for example, capital gains from movable private wealth are considered tax-exempt. This law can be interpreted to include Bitcoin and other cryptocurrencies. Bern on the other hand has stricter regulations, and both mining and trading are considered regular income.

Germany Crypto Regulation

In Germany, cryptocurrencies are not considered to be legal tender but rather private money and the laws tend to favor long-term investors.

Indeed, individuals who hold crypto for over a year won’t pay any taxes, regardless of the value of the assets. For shorter-term traders, there are capital gains taxes on amounts above €600.

Singapore Crypto Tax

Singapore is known as a fintech hub within Southeast Asia and for good reason. The country’s monetary authority takes the view that cryptocurrencies should be monitored but that innovation must not be stifled. Cryptocurrencies are exempt from Capital Gains Tax for individual investors.

For businesses, however, crypto payments and trading is liable for Income Tax

Malta Crypto Regulation

Malta is known as a blockchain island as many crypto projects operate from the country, including Binance which opened an office there back in 2018.

Here, cryptocurrencies are considered a ‘store of value’. As such, there is no Capital Gains Tax on long-term price appreciation of cryptos.

Cayman Islands Crypto Tax

The Cayman Islands have long been known as a tax haven for businesses and investors. Indeed, their lax tax laws also apply to the crypto markets as well.

Put simply, there are no taxes for all types of crypto activities including both trading and investing. Perhaps it is unsurprising that many crypto companies operate from this island nation.

Closing Thoughts

For many countries around the world, crypto taxes remain a grey area.

Perhaps that's because regulation finds it difficult to keep up with the pace of innovation within this nascent industry.

For example, apart from mining and staking crypto, you can now engage in yield farming, lending, borrowing, taking out flash loans, earning free airdrops, and more.

Given that some countries have taken a lax approach to crypto taxes, it’ll be interesting to see how other countries decide to shape their regulatory environment going forward.

Notably, current tax laws may also be subject to change. Please refer to the relevant tax authorities in your jurisdiction for the latest information.

Khashayar Abbasi

Khashayar Abbasi

Khashayar discovered Bitcoin back in 2014 and has since spent countless hours researching the different use cases of cryptocurrencies. He has a bachelor's degree in International Relations and has been a writer in the financial services industry for nearly half a decade. In his spare time, Khashayar enjoys photography, cycling, and ice skating.