These are the 9 tax havens for Bitcoin (BTC)

Tax and Bitcoin are not always a good marriage. Not so much because Bitcoin aims to evade taxes, but primarily because the rules are not always well thought out. There are also big differences between the countries.

Some countries put pressure on investors with high taxes on income and profits. Other countries choose to promote better acceptance and innovation. Decrypt has listed the 9 best Bitcoin-loving countries.

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1. Belarus

A prominent number one: Belarus. The Eastern Bloc country has an experimental access to cryptocurrencies. In March 2018, a new law legalized Bitcoin, exempting individuals and businesses from tax until 2023.

By law, mining Bitcoin and investing in this asset is “personal investment”. Therefore, they are exempt from income tax and profit tax.

The laws are intended to stimulate the development of a digital economy. The country was recently ranked third in Eastern Europe and number 19 in the world in peer-to-peer trade.

2. Germany

Our eastern neighbors are also friendly with Bitcoin. Unlike most other countries, Germany considers Bitcoin as private money, not a currency, commodity or stock.

For residents of Germany, any cryptocurrency held for more than one year is tax-free, regardless of the amount. If you hold the asset for less than a year, no capital gains tax is imposed on a sale, as long as the amount does not exceed 600 euros.

For companies, however, it is a different matter. A German-based startup still has to pay corporation tax on cryptocurrency profits, just like any other asset.

Hong Kong

As a special administrative region in China with (theoretical) autonomy over its own affairs, Hong Kong is also high on the list. And Hong Kong’s tax legislation on cryptocurrency is very up to date. Almost every year, they come up with newer guidelines.

According to Henri Arslanian, head of the crypto department at PwC, Bitcoin is definitely not affected by this.

[penci_blockquote style=”style-2″ align=”none” author=””]”If you buy digital assets for long-term investment purposes, any gains will not be subject to income tax”[/penci_blockquote]

However, this is the case for business.

Malaysia

In Malaysia, cryptocurrency transactions are currently tax-free. They are also not eligible for capital gains tax, as digital currencies are not considered an active or legal tender by the authorities.

The law has recently been amended. This only applies to individual taxpayers. Businesses that use Bitcoin are subject to Malaysian income tax.

Malta

The government on the so-called “Blockchain Island” recognizes Bitcoin “as a unit of account, a medium of exchange or a store of value.” This was also the reason why the island was filled with startups in 2017. Binance, among others, settled on the island at the time.

Malta does not charge a capital gains tax on holding digital currencies such as Bitcoin. Transactions, however, are subject to the same rules as day trading with shares or shares. This includes a rate of 35% for companies.

6. Portugal

Portugal should actually be at the top of the list. It is the most crypto-friendly tax haven in the world.

Income from the sale of cryptocurrencies from individuals has been tax-free since 2018. Trading in cryptocurrencies is also not considered investment income. This is usually subject to a tax rate of 28%.

However, companies that accept digital currencies as payment for goods and services are taxable.

7. Singapore

Capital gains tax does not exist in Singapore, so this is very attractive to both individuals and companies that own cryptocurrency.

But Singapore-based companies have to waive income tax if their core business is trading cryptocurrencies or if they accept it as payment.

8. Slovenia

Slovenia is the country with the fewest Bitcoin maximalists. They are especially fond of altcoins, tokens and other cryptocurrencies. This is also reflected in the tax system.

They do not charge individuals for capital gains when selling Bitcoin and they do not see profits as income. Businesses that receive payments in cryptocurrencies or through mining must pay taxes.

9. Switzerland

Finally Switzerland. This should come as no surprise, as with Zug, the country is home to the innovation center known as the “Crypto Valley”. You can even pay taxes here with Bitcoin!

Tax legislation varies from region to region. In addition, they charge an annual “wealth tax” on the total number of cryptocurrencies one owns, along with the rest of a person’s equity.

Bitcoin in the Netherlands

Want to know what it’s like in the Netherlands? Then read this comprehensive explanation page for the tax rules that apply to your Bitcoin.

Bitcoin and other cryptocurrencies fall under “other assets” in Box 3 when it comes to wealth tax. You have to pay tax on a fictitious return, as if your portfolio has increased in value over the past year. Even when this is not the case.

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