At the moment there are no uniform laws for the taxation of Bitcoin (BTC) and Co. Nevertheless, some countries have already taken a more liberal approach than others – today we take a look at five crypto tax havens.
World governments develop laws to taxes on capital gains by Bitcoin and co . to raise. Often the digital currencies are frowned upon by the regulatory authorities . Still, there are some countries that don’t levy taxes on cryptocurrencies.
Why don’t countries tax BTC and other cryptocurrencies?
In most cases, they want to promote innovation in the Bitcoin and crypto space to attract capital into the country. The more crypto-friendly legislations allow investors to buy, sell, or hold digital assets without paying taxes.
There are no capital gains taxes in Singapore. As a result, neither companies nor individuals who hold cryptocurrencies for the long term are subject to tax. However, companies based in Singapore are subject to income tax if trading in cryptocurrencies is a company’s core business.
In addition, those who receive Bitcoin as payment for services rendered will have to pay the normal income tax rate as corporations are taxed on the profit made in Singapore. The personal income tax rate in Singapore is progressive. It is a maximum of 22 percent and applies to net income in excess of US $ 230,000. In contrast, companies in Singapore pay a flat tax rate of 17 percent on their profits.
There are no taxes on transactions with Bitcoin and other cryptocurrencies in Malaysia either.
Digital currencies are not considered assets or legal tender by the authorities, which is why they are not taxed
Nevertheless, the law is currently fluid and this rule only applies to the individual taxpayer. Companies involved in cryptocurrencies are subject to Malaysian income tax. Currently, the progressive income tax in Malaysia is between zero and 30 percent. There are always rumors that this should be changed, but currently there are no taxes on investment income in Malaysia with Bitcoin and Co.
Portugal is one of the most crypto-friendly countries in Europe when it comes to taxes. Proceeds from the sale of Bitcoin and other cryptocurrencies by private individuals have been tax-free since 2018. In addition, trading in cryptocurrencies does not count as capital gains and is therefore not subject to a tax rate of 28 percent.
However, companies that accept digital currency as payment for goods and services are subject to income tax. For these reasons, Portugal’s laws are some of the friendliest crypto tax laws in the world.
For Slovenia, the tax system for individuals and companies dealing with Bitcoin is slightly different. There is no capital gains tax on individuals when they sell Bitcoin , and the profits are not considered income.
However, companies that receive payments in cryptocurrencies or through mining must pay taxes at the corporate tax rate. This is currently 19 percent. It is noteworthy that the Mediterranean country does not allow business activities in cryptocurrencies alone. As a result, it is not possible, for example, as a company to only accept Bitcoin as payment.
Unsurprisingly, Switzerland, which is also home to the famous Krypto-Valley Zug, has an extremely progressive tax policy. In principle, capital gains from movable private assets, which also include Bitcoin and other crypto currencies, are tax-free in Switzerland.
Other income from BTC Co. and such as from the mining, staking, lending or operation of master nodes can be explained as a regular „income from movable capital“ if no „earned income from self-employment“ is present . Nevertheless, assets in cryptocurrencies are subject to wealth tax at the year-end rate.
The tax rates vary depending on the canton or municipality of residence and range from 1.3 percent to 10.1 percent. Because taxation is progressive, taxpayers with assets of CHF 1 million or more are particularly affected.