Some countries have decided to introduce heavy taxes on crypto-related income. A brief overview of the 5 countries that have made this choice, following a study conducted by the site coin.
Top 5: The Countries Taxing Crypto-Related Income Most
Some countries have chosen to apply fairly strict tax policies to cryptocurrencies. Back to the 5 least advantageous cryptos according to Coincub.
#1 – Belgium, the country that taxes cryptos the most
At the top of the podium we find Belgium with a very small index of 0.6 out of 5. In 2017, Belgium opted to massively tax cryptocurrencies. Thereby, tax on income from crypto transactions is 33%. But that’s not all, as the Belgian tax system withholds up to 50% on professional income related to crypto.
#2 – Israel, a strict tax regime
It is Israel that comes second among the countries that tax crypto-related income the most. Under the Israeli tax system, the sale of crypto is generally subject to: capital gains tax, which can be as high as 33%. On the other hand, there is a specific corporate income tax. The latter can go up to 50%!
#3 – Iceland, up to 46% tax
On the last step of the podium is Iceland appearing there. In Iceland, any crypto profit above $7,000 is subject to 40% tax. The biggest wins can yield a tax of up to 46% or nearly half.
#4 – The Philippines, up to 35% tax
In fourth position we find the archipelago of the Philippines. There there is no crypto-related tax under $4,500, but after that any income is taxed up to 35%. The country’s government is considering new taxes by 2024, it could introduce a 30% flat tax on all earnings on cryptocurrencies. India has introduced a similar tax.
#5 – Japan, in last place in the ranking
In last place among the countries that tax crypto most, we find Japan with an index of 1.1 stars out of 5. The country has a system of progressive tax rates for income related to cryptocurrencies. The tax rate varies from 5% to 45% depending on the amount of the total profit. In other words, the higher your income, the more you will be taxed in Japan.
Top 5: Countries That Tax the Least Income from Crypto-Related Income
In the most generous countries when it comes to taxes, there are several that are called “tax havens”, but also some surprises.
#1 – The Bahamas, the tax haven for cryptos
At the top of the stage we find an archipelago: the Bahamas. Already known as a tax haven, these islands tend to become one for companies specializing in crypto as well. The Prime Minister of the Bahamas said:
As our country becomes the vanguard of digital assets in the Caribbean and globally, the policies we adopt now could significantly generate much-needed economic recovery and transform the landscape of the Bahamian financial markets as we know it.
#2 – The British Isles of Bermuda: An Affordable Diet
In second place are the islands of Bermuda. the archipelago has adopted an extensive regulatory regime to regulate cryptocurrency. In fact, it is one of the first legal and regulatory regimes in the world specifically designed to regulate digital assets. As one of the world’s offshore financial centers, Bermuda has adopted a business-friendly approach to managing digital assets and related activities.
In addition, the crypto exchange site FTX has already established itself in the archipelago to take advantage of tax breaks.
#3 – Belarus, a place par excellence in Europe
In third place we find Belarus. Europe’s last dictatorship chose to go against the grain of its neighbors. Indeed, in 2018, it took a unique approach to cryptocurrencies. Instead of creating tax laws, the Eastern European state legalized crypto activities and exempted all individuals and companies from crypto tax until 2023.
#4 – The United Arab Emirates, the crypto valley with 0% tax
Immediately after, it is the United Arab Emirates who climb to fourth position. We find in Dubai a “Crypto Valley” where the tax rate is only … 0%! There are several such areas across the country. Switzerland is also working with the United Arab Emirates to develop other “tax-free zones”.
#5 – Central African Republic, a lax policy
In 5ᵉ position we find the Central African Republic. The country has had a lax policy towards cryptocurrencies and has even launched its own crypto: the Sango Munt. However, the low internet access (11%) and the electrification make the project unviable.
It should be noted that the taxation of cryptocurrencies changes very quickly given the young age of the latter. Indeed, countries constantly have laws and regulations. This classification is likely to change very quickly, depending on the laws of different countries. It is therefore essential to stay up to date with cryptocurrency news.
Very favorable countries for their inhabitants
In its study, Coincub also reveals that some countries have: very beneficial laws for crypto investors. At the top of the rankings, in particular, we find Germany thanks to a law that states that anyone who owns a cryptocurrency for at least a year does not have to pay tax on the profit on the sale. Then there are countries like Italy, Switzerland, Singapore and Slovenia.