Crypto Tax Free Countries 2022

Are you thinking of taking a vacation to a cryptocurrency tax haven so that you may avoid paying taxes on the profits you made from trading cryptocurrencies?

There are still a few crypto tax havens and locations where you’ll pay less crypto tax, despite the fact that the vast majority of countries throughout the world tax subject bitcoin to Capital Gains Tax or Income Tax.

If you are considering moving into the cryptocurrency market in 2022, you should research which countries will not impose taxes on cryptocurrency transactions.

Crypto Tax Free Countries

Top 10 crypto tax free countries

To avoid having to pay taxes on cryptocurrency, it is essential to gain an understanding of how various nations view the asset and how their regulations regarding capital gains tax are applicable.

If you are an investor in cryptocurrencies who is interested in moving abroad, we recommend one of the crypto tax havens that are listed below.

Germany

To begin, I would like to point out that while Germany does not provide a crypto environment that is exempt from taxes, there are certain unique tax laws that enable investors to avoid paying any taxes on their cryptocurrency holdings.

Bitcoin and other cryptocurrencies are regarded as private money in Germany; they are not considered to be assets in the country’s financial system.

If you hold on to your cryptocurrency for more than a year before exchanging it, spending it, or selling it, you will avoid having to pay taxes on it.

Keeping your cryptocurrency is quite important given that if it is held for less than a year, you will be subject to capital gains tax on any profits made from selling it, provided those profits are less than €600.

The regulation for the stakes is another another quirk. No matter how long you’ve held onto your cryptocurrency, if you staked it in order to make more money, you’ll be required to pay taxes on it.

This is true regardless of how long you’ve held onto it. If you hold on to your staked cryptocurrency for a period of ten years, then and only then will you be able to sell it tax-free.

As long as you keep your bitcoins in HODL, you will not be subject to German income tax on them.

On the other hand, there is some troubling information about the taxation of cryptocurrencies to share with you before you start packing your things and heading to Berlin.

A number of cryptocurrencies, including the following, are still subject to income tax in Germany:

Getting paid in cryptocurrency instead.

Mining for cryptocurrency takes a significant amount of time.

Staking crypto.

When you’ve produced at least €600 worth of crypto and have kept it for less than a year, you may spend it.

Within the next ten years, the sale of staked cryptocurrency.

In addition to this, a controversial new crypto tax policy will become law throughout the EU in 2021, including in Germany.

This law, in effect, puts a stop to all trading in cryptocurrency futures. If you do a significant amount of trading in prediction contracts, the EU is probably not the best location for you to be.

Belarus

From the West of Europe to the East, another country in Europe that does not tax cryptocurrencies is Belarus.

When it came to cryptocurrencies in 2018, Belarus adopted a strategy that was very unconventional.

The Eastern European country of Moldova followed the lead of other countries in March 2018 when it legalised cryptocurrency activities and exempted individuals, businesses, and government agencies from having to pay any cryptocurrency-related taxes until the year 2023.

As a consequence of this, all activities involving cryptocurrencies, like as mining and day trading, are regarded as personal investments and are exempt from taxes on income and on profits from the sale of assets.

This innovative piece of legislation, which was established to boost the digital economy of Belarus and will be evaluated in 2023, was just passed into law.

This may no longer be the situation in Belarus in 2023, despite the fact that it is now a tax haven for bitcoin.

El Salvador

El Salvador’s government was the first in the world to acknowledge bitcoin as a kind of legitimate currency, which brought the country widespread recognition.

As a consequence of this, the government intends to entice a greater amount of investment into the economy.

In addition, the country does not impose taxes on the earnings or revenue generated by Bitcoin transactions conducted by foreign investors at this time.

Companies are required to accept Bitcoin as a means of payment since Bitcoin is recognised as a legal currency in the country.

In El Salvador, you are able to use Bitcoin as a method of payment for a diverse range of goods and services, which is not the case anywhere else in the world.

Portugal

There is no need to explore any further if you are in need of a tropical holiday and tax-free bitcoin. The country of Portugal is a wonderful vacation destination.

Portugal is an excellent nation to call home if you want to avoid paying taxes on cryptocurrency gains.

Since 2018, all revenues made from the selling of cryptocurrencies have been exempt from taxation. Even better, trading cryptocurrencies does not count as an investment, so any profits made from it are exempt from taxation.

If you are an individual rather than a firm in Portugal, the value of your bitcoin is shielded from both the VAT and the income tax.

Therefore, Portugal is a tax-free country for people who utilise cryptocurrencies, which is good news for the vast majority of investors.

May 2022: Latest information as of: It would seem that the Portuguese tax office has decided to take a different approach to this matter.

The Portuguese Minister of Finance has indicated that taxes on cryptocurrencies would be implemented in the not-too-distant future; however, he has not yet provided specifics of how these taxes will be implemented.

Watch this page for more updates! There is no need to explore any further if you are in need of a tropical holiday and tax-free bitcoin. The country of Portugal is a wonderful vacation destination.

Portugal is an excellent nation to call home if you want to avoid paying taxes on cryptocurrency gains. Since 2018, all revenues made from the selling of cryptocurrencies have been exempt from taxation.

Even better, trading cryptocurrencies does not count as an investment, so any profits made from it are exempt from taxation.

If you are an individual rather than a firm in Portugal, the value of your bitcoin is shielded from both the VAT and the income tax. Therefore, Portugal is a tax-free country for people who utilise cryptocurrencies, which is good news for the vast majority of investors.

May 2022: Latest information as of: It would seem that the Portuguese tax office has decided to take a different approach to this matter. The Portuguese Minister of Finance has indicated that taxes on cryptocurrencies would be implemented in the not-too-distant future; however, he has not yet provided specifics of how these taxes will be implemented. Watch this page for more updates!

Singapore

This is due to the fact that a number of cryptocurrency exchanges, such as KuCoin and Phemex, are located in Singapore. Cryptocurrency businesses and individuals alike may benefit from the favourable tax climate in Singapore.

This is because Singapore does not have a capital gains tax; as a result, neither individual investors nor businesses are required to pay this tax.

The reason for this is owing to the lack of a capital gains tax in Singapore. As a direct consequence of this, you won’t have to pay any Capital Gains Tax on the purchase or selling of cryptocurrencies.

Because cryptocurrencies are considered intangible property, for the purposes of taxation, purchases of goods and services using cryptocurrencies are regarded not as payments but rather as barter deals.

As a direct consequence of this, the Goods and Services Tax will not apply to the token or currency used for making payments (GST).

You can’t evade all taxes, of course. If you accept cryptocurrencies as a method of payment, you might expect your income tax bill to be much greater than it would be otherwise. If crypto trading is the principal service that a firm offers, then it is still required to pay income tax.

Malaysia

Similar to Singapore, the neighbouring country of Malaysia does not levy any taxes on bitcoin transactions.

Because the government of Malaysia does not consider cryptocurrencies to be either legal cash or capital assets, individual investors in the nation are not required to pay taxes on transactions using cryptocurrencies.

There is a caveat, to state the obvious. The Malaysian Inland Revenue Board has said that bitcoin transactions are exempt from taxation if they do not occur on a regular or recurrent basis. Even if you trade cryptocurrencies on a day-to-day basis, you will still be subject to taxation on any profits you make.

It makes no difference whether profits are made in cryptocurrency or traditional currency; these enterprises are subject to the same taxation requirements either way.

Malta

Blockchain Island, Malta is a tax haven for cryptocurrency. As a “unit of account, means of trade, or currency,” the government recognises Bitcoin and other virtual currencies.

This implies that long-term profits from the sale of cryptocurrency are exempt from Capital Gains Tax if they are regarded ‘a store of value.’. As a result, hodlers may rejoice.

As a result, crypto trading is considered as akin to stock or share trading. As a result, they are subject to a corporate tax rate of 35%! Maltese tax laws, however, enable you to cut this tax rate from 0% to 5% depending on how much money you make and how long you’ve lived in the country.

Cayman Islands

The inclusion of the Cayman Islands on this list is not unexpected. The Cayman Islands have a long history of serving as a tax haven for businesses of all sizes and individual investors alike, dating back to far before the advent of the cryptocurrency industry.

The Cayman Islands provide a favourable tax environment for bitcoin businesses as well as investors.

Citizens of the Cayman Islands are not subject to income tax or a tax on capital gains, and the Cayman Islands Monetary Authority does not impose a tax on corporations.

The utopia that is the Caribbean relies mostly on revenue from tourism, work permits, and the goods and services tax (GST).

Puerto Rico 

The trend of wealthy people from Silicon Valley coming to Puerto Rico to take advantage of the island’s luxurious lifestyle and lax tax laws may be recognisable to inhabitants of the United States.

Despite the fact that it is a territory of the United States, Puerto Rico is treated as a foreign country for the purposes of the federal income tax. Because of this, the regulations governing taxes are set at the national level.

This is fantastic news for the crypto taxation community. Due to the fact that the tax rates in Puerto Rico are lower than those in the United States, residents of Puerto Rico have a reduced overall tax burden. The Capital Gains Tax does not apply to any digital assets that you purchased while you were a resident of Puerto Rico. This is much more encouraging information!

This suggests that the time at which you obtained your cryptocurrency does play a significant role in determining whether or not you will be required to pay taxes on it. You are still required to comply with the crypto tax obligations of the IRS even if you have relocated to Puerto Rico prior to purchasing cryptocurrency and are a citizen of the United States. If, on the other hand, you acquire cryptocurrencies after becoming a resident of Puerto Rico, you will not be subject to the Capital Gains Tax on any cryptocurrency that you own.

Switzerland

On our list of the countries that do not tax cryptocurrency transactions, Switzerland is ranked dead last. Switzerland has always been recognised as having one of the lowest tax burdens of any country in the world, making it an attractive place to reside.

This does not mean that you will not be subject to taxation on your cryptocurrency; rather, it indicates that the cryptocurrency tax legislation in Switzerland are substantially different from those in other countries.

The most dreadful news will be given out first. You will be responsible for paying income tax if you engage in day trading or the mining of cryptocurrencies.

You are subject to the yearly Wealth Tax, which is calculated according to your whole net worth all the time. The rate of the wealth tax varies depending on where in the canton a person resides.

On the other hand, individual investors who do not participate in professional trading of cryptocurrencies will not be liable to Capital Gains Tax on any earnings they accrue from trading cryptocurrencies. For many investors, buying and selling bitcoin results in no tax liability.

Georgia

Georgia is one of the most tax-free states in the world when it comes to cryptocurrencies, and this applies to both individuals and businesses.

According to the Georgian Ministry of Finance, earnings made from the selling of cryptocurrencies are exempt from personal income taxation in the state of Georgia for individuals.

Due to the fact that cryptocurrency is not regarded to be “Georgian originated,” Georgia does not impose a capital gains tax on cryptocurrency transactions (i.e., assets that originate in Georgia).

Cryptocurrency earnings reported by legally recognised businesses, such as an LLC, are subject to a 15 percent tax on corporate profits (CIT).

Crypto is a tax minefield

Tax agencies and governments all around the world continue to struggle to make sense of cryptocurrency and the taxes associated with it.

The perception of cryptocurrency and the manner in which it is taxed vary widely from one region of the world to the next.

A number of countries apply a variety of taxes on cryptocurrencies, while others, like the ones that are mentioned above, do not charge any taxes at all.

The majority of countries, with the notable exception of El Salvador, do not acknowledge cryptocurrencies as legitimate forms of fiat money.

The most typical approach to think about it is as an asset or a commodity, in a manner that is comparable to how you may think about shares of stock or real estate.

This viewpoint has implications for the manner in which bitcoin is taxed. In most countries, cryptocurrency transactions and earnings are subject to taxation either as income or as capital gains, or perhaps as both.

You’ll have to pay Income Tax if you’re ‘earning’ bitcoin. The definition of “earning crypto” varies from country to country, but in general, you’ll have to pay Income Tax if you:

Cryptocurrency payments.

Cryptocurrency mining.

Cryptocurrency staking.

Investing in cryptocurrency and earning interest.

As a matter of fact, in several countries, hard forks and airdrops are subject to income tax as well.

Even if you pay income tax on your cryptocurrency, you may be subject to capital gains tax in the future.

In most jurisdictions, capital gains tax is levied on the sale of cryptocurrency. Capital gains and losses occur whenever you sell a capital asset (profit or loss). If you earn a profit in the stock market, you’ll have to pay Capital Gains Tax. Crypto may be disposed of in the following ways:

Selling cryptocurrency in exchange for cash.

Exchanging one cryptocurrency for another.

Goods or services purchased using crypto currency.

Cryptocurrency may be given as a gift in several nations, including the US.

As a result, if you make money from cryptocurrency mining and subsequently sell your coins, you’ll have to pay both Income Tax and Capital Gains Tax. Isn’t it a lot of money?

It’s not as simple as it seems when it comes to crypto tax, as we hinted at in the opening. The information presented here is intended to provide you a rough idea of how cryptocurrency is taxed. Investors wishing to avoid double taxation on their cryptocurrency might still find a tax haven in certain nations.

Let’s take a look at which nations have the lowest crypto tax rates.

What are the worst countries for crypto tax?

If you’re seen to be ‘earning’ crypto, you’ll pay Income Tax. Again, different countries have different views on what earning crypto includes, but in general, you’ll pay Income Tax when:

Getting paid in crypto.

Mining crypto.

Staking crypto.

Investing in cryptocurrency and earning interest.

As a matter of fact, in several countries, hard forks and airdrops are subject to income tax as well.

Even if you pay income tax on your cryptocurrency, you may be subject to capital gains tax in the future.

Because crypto is seen as a capital asset – it’s subject to Capital Gains Tax in most countries. Capital gains and losses occur whenever you sell a capital asset (profit or loss). If you earn a profit in the stock market, you’ll have to pay Capital Gains Tax. Crypto may be disposed of in the following ways:

Selling crypto for fiat currency.

Trading crypto for another cryptocurrency.

Spending crypto on goods or services.

Gifting crypto – in most countries.

So if you earn crypto – say by mining – and then later sell your mined coins, you’ll pay both Income Tax and Capital Gains Tax in most countries. Isn’t it a lot of money?

It’s not as simple as it seems when it comes to crypto tax, as we hinted at in the opening. The information presented here is intended to provide you a rough idea of how cryptocurrency is taxed. Some countries remain crypto tax havens for investors looking to avoid double taxation on their crypto.

Let’s take a look at which nations have the lowest crypto tax rates.

Wherever you live – Koinly makes crypto tax simple

The Koinly crypto tax software streamlines the process of filing crypto taxes by automatically tallying all of your profits and losses, as well as the sources of your income and sources of your expenditures.

Your crypto wallets and exchanges may be synchronised with Koinly via an API or a CSV file, and the rest of the work is taken care of by Koinly on your behalf.

After you have imported the data relating to your crypto transactions, Koinly will give you with a tax summary in the fiat currency of your choice, using the cost basis approach that you have selected, depending on where you live.

After that, you will be able to get a copy of your tax return to bring with you when you visit the tax office in your city or town.

In addition, depending on where you live, Koinly may generate specific tax reports for you, such as the IRS Form 8949 and Schedule D, the ATO myTax report, the HMRC Capital Gains Summary, and a great deal more.