Top Countries that Have No Taxes on Bitcoin and Other Cryptocurrencies
Operations with cryptocurrencies can become an additional source of income for the state treasury. Therefore, governments are increasingly raising the question of the possible introduction of tax policies on any actions with cryptocurrency, including buying, selling, or exchanging. However, some countries have abandoned this idea, with the intention to help the development of the crypto market in their respective countries.
Why did these countries decide not to tax Bitcoin and other cryptocurrencies?
In most cases, they want to encourage innovation in bitcoin and the crypto space to attract capital to the country. More crypto-friendly legislation allows investors to buy, sell, or hold digital assets tax-free.
There is no capital gains tax in Singapore. As a result, neither companies nor individuals who have owned cryptocurrencies for a long time are taxed. However, Singapore-based companies are subject to income tax if cryptocurrency trading is the company’s main business.
Malaysia also has no taxes on transactions with Bitcoin and other cryptocurrencies. Digital currencies are not considered assets or legal tender by the authorities; that’s why they are not taxed.
However, the law is currently volatile, and this rule only applies to the individual taxpayer. Crypto companies are subject to Malaysian income tax. Malaysia’s current progressive income tax ranges from zero to 30 percent.
Portugal is one of the most crypto-friendly countries in Europe when it comes to taxes. Income from the sale of bitcoins and other cryptocurrencies by individuals has not been taxed since 2018. In addition, crypto trading does not count as capital gains and is not subject to the 28 percent tax rate.
However, companies that accept digital currency as payment for goods and services are subject to income tax.
In Slovenia, the tax system for individuals and companies working with bitcoins is slightly different. When selling bitcoins, individuals are not subject to capital gains tax, and profits are not considered income.
However, companies that receive payments in cryptocurrency or through mining must pay taxes at the corporate tax rate. Currently, it is 19 percent. It is also noteworthy that the country does not allow doing business only with cryptocurrencies. As a result, for example, a company cannot accept only bitcoins as payment.
Switzerland has an extremely progressive tax policy — capital gains from cryptocurrency are not taxed there.
However, profits generated from mining are taxed. If the local business decides to pay wages in bitcoins, the state will withhold income tax, regardless of the company’s field of activity.
Malta is also world-renowned for its crypto-friendly attitude. For example, profits earned from the sale of cryptocurrency are not taxed here. However, corporations using cryptocurrency trading as their primary business are subject to a 35% tax. Companies that trade in stocks or foreign exchange pay the same amount. In addition, in the country, cryptocurrency is already used as a payment instrument and an investment instrument.
Bermuda is kind of a remarkable country when it comes to crypto and taxation. It doesn’t impose income, capital gains, withholding, or other taxes on digital assets and transactions involving digital assets.
By the way, in October 2019, Bermuda became the first government to accept payments for taxes, fees, and other government services using USD Coin.
Having a no-tax policy for crypto provides the best conditions for development and adoption of cryptocurrencies in these countries. The longer we observe the trends in crypto, the more we see that crypto is probably here to stay. Therefore, it is likely that more and more countries are going to adopt crypto-friendly policies to be part of the transition from traditional to crypto financial systems.
LATOKEN does not provide investment, tax, legal or accounting advice. This article is written for informational purposes only. Like many other assets, cryptocurrencies are subject to high market risk. Please trade with caution.