Crypto users all over the world are looking for crypto tax-free countries. While cryptocurrency investors in places like the US and Australia would have to pay hundreds of dollars in taxes, other nations have more benevolent regulations for those who decide to move there.
You’ll be surprised to learn that there are several tax havens for cryptocurrencies where you may pay fewer taxes or countries without crypto tax at all. Discover the top cryptocurrency tax-free locations for relocation in 2023.
Contents
- Top 10 countries without crypto tax in 2023
- What are the worst countries for crypto tax?
- Conclusion
- FAQs on Tax Free Crypto Countries
Top 10 countries without crypto tax in 2023
Let’s start our crypto journey from Europe, and then move towards the Caribbean and Asia.
1. Germany
While Germany does not entirely exclude cryptocurrency from taxes, they do have certain peculiar regulations that make life simple for investors.
Germany does not consider Bitcoin or other cryptocurrencies to be a form of capital. This is significant because if you keep your cryptocurrency for longer than a year, you won’t have to pay taxes on it when you sell, exchange, or use it. Holding onto your cryptocurrency is important because cryptocurrency held for less than a year is taxed unless the profit is less than €600.
Some crypto activities are still liable to income tax in Germany, including:
- Receiving payments in crypto.
- Mining, either individually or in the pool.
- Staking
Additionally, in 2021 a contentious new crypto tax regulation went into effect across the EU, including Germany. This regulation basically bans all trading in cryptocurrency derivatives. Therefore, the EU isn’t the greatest location if you primarily trade prediction contracts.
2. Portugal
If you want to reside somewhere where it’s sunny, cheap, and nice, and you don’t have to pay crypto taxes, Portugal is one of the greatest destinations in the world. Since 2018, all cryptocurrency sales have generated tax-free profits. Even better, cryptocurrency trading is tax-free because it isn’t regarded as investment income.
Your crypto is likewise free from VAT and Income Tax in Portugal, provided you are not a company. Portugal, therefore, offers tax-free crypto investment for the great majority of investors.
Update: In May 2022 the Portuguese Minister of Finance stated that they will soon change these rules and crypto will become subject to taxation. There are no details yet, so keep an eye out.
3. Malta
Malta, a cryptocurrency tax haven, is also known as the “blockchain island”. The country accepts cryptocurrencies like Bitcoin as “units of account, a means of exchange, or a store of value”. This implies that as long as cryptocurrency is regarded as “a store of value”, you won’t have to pay Capital Gains Tax on long-term gains from selling it.
Despite this, day trading stocks or shares are seen as being comparable to crypto deals. They are thus subject to the 35% Business Income Tax! However, depending on your income and place of residence, there are structuring alternatives within the Maltese tax system that enable you to lower this tax rate to between 0% and 5%.
4. Switzerland
Switzerland’s progressive policies have given rise to the moniker “crypto valley” for the nation. This country has extremely different cryptocurrency tax regulations compared to other nations in the globe, but that doesn’t mean you won’t have to pay taxes at all on your cryptocurrency.
The bad news is that if you qualify as a day trader and mine cryptocurrencies, you will have to pay income tax. The Wealth Tax, which is assessed yearly on your whole net worth, will also apply to you. The Wealth Tax Rate varies according to the Canton where you reside.
The better news is that crypto gains are excluded from the Capital Gains Tax for private investors who aren’t engaged in professional trading. Thus, for many investors, selling and trading cryptocurrency is tax-free.
5. Georgia
It’s not an EU country but geographically it is in Europe. With Georgia’s attractive nature, food, affordable prices, and other delights, it is also one of the greatest crypto-tax-free nations in the world. According to the Georgian Ministry of Finance, residents of Georgia are not required to pay income taxes on gains from the sale of cryptocurrencies. Additionally, because Georgia does not consider cryptocurrencies to be “Georgian sourced”, they are also exempt from Georgia’s capital gains tax.
Profits from cryptocurrency maintained within a legal company, such as an LLC, are only taxed at a very modest 15% corporation tax rate (CIT).
Besides, Georgia has a very attractive digital nomad visa for those who work remotely, and those tax conditions are also quite favorable. That’s why Georgia is regularly at the top of the list of countries with no crypto tax.
6. El Salvador
El Salvador made international news as the first nation to officially recognize Bitcoin as legal money. The country believes that by doing this, it would be able to draw more investment into its economy. The nation now exempts overseas investors from paying any tax on crypto profits or income to further encourage this.
Even better, companies are required to accept Bitcoin as payment because it is recognized as legal cash in the nation. In El Salvador, you may use Bitcoin to pay for a wide variety of goods and services that you couldn’t anyplace else in the globe.
7. The Cayman Islands
Technically being a British overseas territory, the Cayman Islands have long been renowned as a tax haven for investors and enterprises outside of the cryptocurrency sector.
The Cayman Islands are a crypto tax haven for both enterprises and private individuals. Businesses are not subject to corporate taxes under the Cayman Islands Monetary Authority, and residents are not subject to income or capital gains taxes. The Caribbean paradise instead makes money through tourists, work permits, and GST.
8. Puerto Rico
The last country on our Caribbean list. If you live in the US, you’ve definitely heard of Silicon Valley millionaires moving to Puerto Rico to take advantage of the country’s lavish lifestyle and lax tax regulations.
Puerto Rico is a US unincorporated territory, but for the purposes of federal income taxes, it is treated as a foreign nation. As a result, it has its unique tax laws.
The good news for cryptocurrency taxation compared to the federal income tax rate in the US, is that Puerto Rican citizens pay a substantially lower territorial income tax. The even better news is that you are entirely free from Capital Gains Tax if you bought digital assets while you were a resident of Puerto Rico.
This implies that the timing of your cryptocurrency purchase will have a significant impact on whether you have to pay taxes on it. If you are a US citizen and you purchased cryptocurrency before relocating to Puerto Rico, you must still abide by the IRS’s cryptocurrency tax requirements. However, your cryptocurrency is completely excluded from Capital Gains Tax if you buy it after establishing residency in Puerto Rico.
9. Singapore
Let’s move towards the Asian continent and see what cryptocurrency tax-free countries are here. There’s a good reason why Singapore is home to various cryptocurrency exchanges, like KuCoin and Phemex. Singapore is a tax haven for cryptocurrency firms and people alike.
Due to Singapore’s lack of a capital gains tax, neither enterprises nor individual investors are subject to it. So you won’t have to pay Capital Gains Tax when you sell or trade cryptocurrency.
Furthermore, when you spend cryptocurrency on goods and services, this is seen as a barter deal rather than a payment since cryptocurrencies are seen as intangible property from a tax standpoint. Therefore, the payment with crypto will not be subject to Products and Services Tax (GST).
10. Malaysia
Malaysia, a neighbor of Singapore, similarly has flexible crypto tax regulation. Crypto transactions for private investors are tax-free in Malaysia since their government does not consider cryptocurrencies to be capital assets or legal cash.
But there’s a catch to it. Cryptocurrency transactions are only excluded from tax when they are irregular or irregularly repeated, according to the Malaysian Inland Revenue Board. In other words, you’ll still have to pay tax on your cryptocurrency if you trade like a day trader.
Similar to individuals, firms operating in cryptocurrencies would have to pay income tax on all earnings, regardless of whether they were made in cryptocurrencies or fiat money.
What are the worst countries for crypto tax?
Now let’s take a look at where crypto holders don’t want to go because of non-friendly crypto regulations.
France
In France, there are a number of taxes on cryptocurrency, and the tax rates are significant. Whether you’re viewed as a regular investor, miner, or professional trader will determine how things turn out. The Single Fixed Levy (PFU) of 30% is played by infrequent traders. And an extortionate 45% Business Income Tax is paid by cryptocurrency miners and professional dealers!
The Netherlands
Regarding cryptocurrency taxes, the Netherlands has adopted a different strategy. When you sell, trade, or use cryptocurrency, you’ll pay tax on fictitious earnings rather than a capital gains tax. So, if you HODL cryptocurrency, you must pay taxes. In addition, a lot of cryptocurrency activities, including mining, staking, and DeFi activities, may be regarded as income and liable to income tax.
Even though it’s one of the few countries in the world that tax unrealized profits, the fictitious gains tax rate is modest, ranging from 0.54% to 1.58% depending on the total value of your assets.
Japan
In this country, for the great majority of crypto transactions, including those that ordinarily would be subject to capital gains tax, selling or trading cryptocurrency, you’ll most likely need to pay miscellaneous income tax. The fact that capital gains tax rates are often substantially lower than income tax rates is not always a bad thing.
Income tax rates in Japan are exceptionally high, reaching a maximum of 55% for higher earnings! Japan now only taxes stock gains at a rate of 20%, so maybe they will soon change their cryptocurrency tax regulations.
Conclusion
Hopefully, you found answers to your questions about crypto tax-free countries. Keep in mind that taxes are a concern that must be managed properly to prevent any risks and fines, especially if you choose to become a country’s tax resident. Local advisers may always be a great resource.
FAQs on Tax Free Crypto Countries
What country has the best crypto tax laws?
If you’re looking into Europe, then Malta, Portugal, Switzerland, Germany, or Georgia can be your choice. There’s a lot to opt from in the Caribbean, for example, El Salvador, Puerto Rico, and the Cayman Islands. If you’re more into Asian countries take a look at Singapore or Malaysia.
How do I avoid crypto tax?
There are several ways to avoid paying taxes on crypto gains, like holding your assets for a long time, declaring only gains not investments themselves, etc. But the best way to be safe is to get residency in one of the crypto-friendly countries that don’t tax your crypto income or at least a part of it.
How can I buy and sell crypto without paying taxes?
There is no easy answer to this question. In many countries, you must pay taxes on the difference between the amount you paid for the cryptocurrency and the sale’s revenues if you sell it for a profit. However, some countries do not see crypto as a legal asset, so if you have a certain residency you may avoid paying taxes on trading.
How much is crypto tax USA?
A person can benefit from lower long-term capital gains taxes if they keep their coins for at least a year. These taxes can be as low as 0% or as high as 20%, depending on your income level. The same tax rates you pay on ordinary income, ranging from 10% to 37% in 2022, will apply to short-term cryptocurrency profits on purchases held for less than a year.
Is crypto taxable in Spain?
It is taxed in Spain to exchange a cryptocurrency or other digital asset for fiat money like the euro or US dollar. You must determine the purchase price of the sold currency, then deduct it from the sale price. Gains from investments are taxed as savings income.
Do you have to pay taxes on crypto in Mexico?
Article 1, Section 1 of Mexico’s Income Tax Law mandates that all individuals and corporations, regardless of their source of wealth, pay income taxes. This implies that revenue produced through crypto is still regarded as taxable even if there are no formal rules for its taxes in Mexico.
Is Dubai crypto tax-free?
Dubai has a solid regulatory framework in place for cryptocurrencies. Cryptos are permitted here. Dubai is the only jurisdiction for cryptocurrency investors that is simple to relocate to, has legal clarity, charges no income taxes, and has no reporting obligations.
