Cryptocurrency taxation laws vary significantly between countries, and some jurisdictions have come up with extremely harsh cryptocurrency tax policies for their residents.
In a new study from cryptocurrency analytics firm Coincub, Belgium is the worst country in the world in terms of crypto taxes for its residents. That’s according to internal classifications that cover tax aspects like taxes on cryptocurrency income or cryptocurrency capital gains.
Belgium is known for its massive 33% tax on capital gains on cryptocurrency transactions, and also withholds up to 50% in tax from professional income on cryptocurrency trades.. As we told you earlier, Belgium adopted strict crypto tax rules in 2017.
Published on Thursday, Coincub’s tax ranking also brings out countries like Iceland, Israel, Philippines and Japan as the least favorable places for crypto investors.
In Iceland, any cryptocurrency gains up to $7,000 are subject to less than 40% tax, while larger gains will incur 46%, the report points out. In the Israeli tax regime, the sale of cryptocurrencies is normally subject to capital gains tax, which reaches 33%. On the other hand, if cryptocurrency trading involves corporate income tax, it can be as high as 50%.
In the Philippines, there is no tax on any cryptocurrency income below $4,500, but after that, any income is taxed up to 35%. The country’s government has also been arguing new taxes on cryptocurrencies by 2024, raising fears that Manila may follow India’s example and impose a 30% flat tax on all cryptocurrency income.
Japan rounds out the top five of the worst countries for cryptocurrency taxes for residents in Coincub’s ranking. The country has a system of progressive tax rates for income considered as miscellaneous income. The tax rate varies between 5% and 45%, depending on the amount of total earnings.
Among other strict economies on crypto taxes, Coincub also mentioned countries like India, Austria, United States, Norway, Denmark and France.
On the other hand, the study pointed to a number of countries that offer tax incentives to citizens and have much more favorable crypto tax policies. According to the ranking, Germany tops the list as the best place for crypto investors, as anyone holding crypto for a minimum of one year will not incur any capital gains tax when selling or converting their crypto. Other crypto tax-friendly countries include Italy, Switzerland, Singapore, and Slovenia.
In addition, Coincub mentioned the classic tax havens or countries that offer foreign companies and individuals minimal or no tax liability for their financial deposits, where cryptocurrencies are no exception. Among them, the study listed the Bahamas, Bermuda, Belarus, the United Arab Emirates, the Central African Republic and Lichtenstein, among others.
Coincub highlighted that crypto taxation changes very quickly, as new regulations are produced regularly. The company also noted that there is an increasing number of countries applying flat income tax rates for individuals, with the aim of simplifying tax taking.
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