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 avoid taxes, but mainly 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 top 9 Bitcoin loving countries.

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1. Belarus

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

By law, mining Bitcoin and investing in this asset are “personal investments”. They are therefore exempt from income tax and profit tax.

The laws aim to stimulate the development of a digital economy. The country was recently ranked third in Eastern Europe and 19th worldwide in peer-to-peer trading.

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 have held 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.

3. Hong Kong

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

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

[penci_blockquote style=”style-2″ align=”none” author=””]”If one buys 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.

4. 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 asset or legal tender by the authorities.

The law has recently been changed. It only applies to individual taxpayers. Businesses using Bitcoin are subject to Malaysian income tax.

5. Malta

The government of the so-called “Blockchain Island” recognizes Bitcoin “as a unit of account, medium of exchange or 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 that time.

Malta does not impose a capital gains tax on holding digital currencies such as Bitcoin. However, transactions are subject to the same rules as day trading with stocks 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 by individuals has been tax-free since 2018. Trading in cryptocurrencies is also not considered investment income. This is normally subject to a tax rate of 28%.

However, businesses that accept digital currencies as payment for goods and services are subject to tax.

7. Singapore

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

But Singapore-based companies have to pay income tax if their core business deals in 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 don’t charge individuals for capital gains when they sell Bitcoin, and they don’t see profits as income. Companies that receive payments in cryptocurrencies or through mining must pay taxes.

9. Switzerland

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

Tax laws vary by region. Furthermore, 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? So 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 in the past year. Even when this is not the case.

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