Despite the COVID-19 pandemic and the resulting huge financial crisis, these 10 countries have made a clear vision for adoption and making clear regulations for cryptocurrency. This includes Japan, India, Malaysia, Singapore, Germany, China, the Philippines, Spain, the U.S., and South Korea.
If you are an active trader and make most of your leavings from daily trading with crypto assets, and if you are residing in one the countries from below list where there is no tax then you are the luckiest person on earth.
In Portugal, tax authorities waived all tax on cryptocurrency trading and transacting – meaning that individuals do not have to pay capital gains tax or value-added tax (VAT) when buying or selling BTC and other digital assets. The Portugal Tax Authority (PTA) said “an exchange of cryptocurrency for ‘real’ currency constitutes an on-demand, VAT-free exercise of services.”
While citizens are under no obligation to pay income tax when exchanging crypto for fiat, the PTA, however, indicated that businesses that accept digital currencies as payment for goods and services are liable to pay taxes such as VAT and income tax. The income tax relief makes Portugal’s laws some of the most favorable throughout the world, given how income tax is a huge expense on the accounts of most crypto traders.
If you hold bitcoin for one year or more in Germany, you won’t have to pay any taxes. Regardless of how much money you make selling your BTC, you do not pay capital gains as long as you have held your coins for a period exceeding 12 months.
Europe’s biggest economy regards BTC as private money, contrary to the widespread view in most developed countries, which look at crypto as a currency, commodity, or equity. In Germany, private sales that do not exceed 600 euros ($654) are tax-free. Businesses, however, are still obliged to pay taxes on gains emanating from bitcoin through corporate income taxes.
Both individuals and corporates who hold BTC or other digital assets as a long-term investment are not taxed in Singapore – simply because capital gains tax does not exist in the city-state itself.
However, enterprises based in Singapore are liable to income tax, should they be involved in cryptocurrency trading as a core business. Those that opt for bitcoin as payment for services rendered, or revenue, are subject to normal income tax rules. Companies are taxed on the profit generated within Singapore.
As with neighboring Singapore, there is no capital gains tax in Malaysia. Cryptocurrency trades involving cash or another digital asset are not taxed in the Southeast Asian country. However, this will likely change if BTC is recognized as legal tender in Malaysia, as has been rumored in the local press in recent months.
In the Eastern European country of Belarus, a new law that came into effect in March 2018 legalized cryptocurrency, exempting individuals and businesses from any form of taxation for dealing in or with digital financial assets in whatever way, at least until 2023.
Individual activities such as mining or buying and selling of crypto, are considered personal investments, and therefore, are not subject to tax. Similarly, registered businesses operating in the special economic zone of High Technologies Park near the capital Minsk, involved in mining, trading, initial coin offerings, or other crypto-related operations are not taxed.
For Slovenia, the tax system for individuals and companies involved with BTC is rather different. While no capital gains are levied on citizens for the sale of bitcoin and other cryptocurrencies, they are still expected to pay income tax regardless of the currency being exchanged. However, companies that receive payment in BTC or from crypto mining are required to pay tax at the corporate tax rate.