Places That Don’t Tax Crypto

Crypto is liable to Capital Gains Tax in most countries because it is considered a capital asset, however there are tax free countries.

It is no secret that the crypto market exploded in 2021. Many of you have heard success stories with many cryptos. However, there is a problem that is on the minds of crypto holders, and that would be their crypto cash out strategy. Many traders are looking for crypto and bitcoin tax-free places to live in without worrying about the taxman.

Tax rules around the world differ from country to country. There are countries where you pay little to no tax and others with huge taxes. This article will be looking at some crypto tax friendly countries.

How Is Crypto Taxed

  • Trading- If you purchased Bitcoin for $1,100 in 2017 and sold it for $65,000 in 2021. You have made a profit of $63,900, making the crypto trade taxable. In addition, you incur capital gains tax because the gain is taxed.
  • Mining- When you mine BTC and other cryptocurrencies, you receive payment in the cryptocurrency mined. You are essentially earning, which is seen as an income, subject to income tax.

10 Countries That Are Crypto Tax Haven

You can do nothing about the crypto trade tax; you just have to pay the tax. However, you might be able to avoid paying tax with careful planning. Some people choose to travel to other countries where

Cayman Island

The country is known as a tax haven for businesses and investors. Cayman Island does not impose capital gains or income tax on individuals or corporate tax on corporations. This means that no taxes will be levied on trading, holding, or transferring digital assets in the country.

Portugal

Trading and transacting crypto or exchanging crypto for regular currency is tax free for individuals. Traders do not incur income or capital gain tax on profit from trading crypto. Only businesses that accept crypto are taxed. Usually, businesses and corporations incur tax if they buy, sell, or mine cryptocurrency.

Belarus

It came into effect and runs for five years—lasting till 2023. No one in the country will have to pay crypto tax. Mining and trading cryptocurrency within Belarus is considered personal investments and are therefore tax exempt.

The law will be reviewed after time passes. And because of the Bitcoin and crypto wave, they might want to impose a tax on it.

Germany

The country views cryptocurrencies as personal money, not capital assets. It would have a 0% tax fee on trading crypto if you held the crypto for longer than 366 days. Here, you have to HODL cryptocurrencies. The sale of assets held for less than a year is subject to taxation unless the profit is less than €600.

Malaysia

Crypto transactions for individual investors are tax free in Malaysia because it doesn’t count as a legal asset or legal tender. But this is only when it is done infrequently. If you trade frequently or are a day trader, you will pay tax. Also, businesses running trading activities will pay tax as income tax.

Malta

The country is known as the blockchain island. Here, if you have held cryptocurrencies for a long time, it will incur no capital gain tax on the sale of crypto. It is the best option for HODLers. However, if you are a day or active crypto trader, you will be taxed at around 35%. Investors may pay less than 5% in taxes depending on how much they earn because of the Maltese structure.

Singapore

It is a no capital gains tax country. Therefore, if individuals and businesses HODL cryptocurrency for long, they do not incur capital gains tax. However, businesses that accept crypto as a form of payment incur taxation fees—income tax.

Slovenia

No tax is levied on individuals selling their crypto in Slovenia. However, businesses involved in crypto related activities pay income tax at a corporate rate.

Puerto Rico

Although Puerto Rico is an unincorporated US territory, it is considered a foreign country. As a result, the country establishes its own tax rules. If investors meet specific criteria, they have a 0% tax rate on crypto. In addition, digital assets purchased when you are a resident of Puerto Rico do not incur capital gains tax.

US citizens do not require visas to relocate there, but you will need a residency.

Switzerland

Switzerland has long been regarded as one of the best locations to live in the world when it comes to taxation. Crypto traded and held by an individual is not liable to capital gains tax. However, because cryptocurrency mining is considered self-employment in the country, any earnings from this activity would be subject to income tax. Therefore, an income tax will be imposed on qualified cryptocurrency traders or active traders.

Conclusion

Yes, moving to a tax free country is not what every investor wants. However, will you be in the market for the next cycle? If the answer is yes, you might want to choose your options and plan to make sure you maximize the best you can.

It is advisable to do research about a country before moving there. Know what rules govern the country you are based in right now and the one you wish to relocate to.

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