Where would you pay the least tax on your bitcoin gains from last year?

Bitcoin’s 2023 rise: $10K gain per coin. Many countries, including unexpected ones like Germany, Portugal, offer 0% tax on holdings

In mid-June 2022 the price of bitcoin stood at $18,948 and in June 2023 it reached $28,951, making a gain of about $10,000 on just one bitcoin. A basket of ten bitcoins purchased in June 2022 would have realized a price gain of more than $100,000 in just twelve months. So how would you get to keep after tax? In recognized investor-friendly locations such as the Bahamas, Seychelles, Bermuda, Cayman Islands, the UAE, and Panama you will have paid no tax and kept the full $100,000.

Surprisingly, you could have also achieved the same result in Germany and Portugal. Simply by hanging on to your five bitcoins for a full twelve months, you would have paid zero capital gains tax on your $100,000 (nb – had you disposed of them within the year then taxes at prevailing rates would have kicked in).

In many countries, taxes are imposed on regular or ‘short-term’ traders of crypto/bitcoin, distinguishing between professional and so-called ‘casual’ investors. Nevertheless, there are also plenty of other locations with surprisingly low or even zero tax demands on bitcoin investment, especially when they are held for a year or more.

In Puerto Rico, bitcoin gains of $100,000 would have been taxed at just 5%, or $5,000, leaving you with a still healthy $95,000! Moving to other smallish, crypto-friendly economies such as Bulgaria and Romania would see a total tax of just $10,000 deducted from your $100,000, double that of Puerto Rico, but a still very low tax take of just 10%.

15% – flat rates becoming popular

Plenty of countries have imposed low flat rates taxes on crypto investors, not out of goodwill, but often making rates attractive enough to encourage home-based investors to pay taxes rather than avoid them. In this category of low tax are countries as diverse as Greece, Hungary, Hong Kong, and Thailand – all subtracting, as either income tax or CGT, some 15% of crypto gains. That’s just $15,000 out of the ten-basket gains of $100,000.

Encouragingly, for the peripatetic bitcoin investor willing to relocate to avoid as much bitcoin tax as possible, by far the largest number of countries on the Coincub tax ranking, fall between 19% and 25% tax – not super low, but not high either. These countries include Malaysia, Poland, Latvia, Singapore, and South Korea – all booming blockchain and crypto-enthusiastic locations.

Tax-takes start to move up a gear with Spain, at 26% – or a tax total of $26,000 on ten bitcoins in the last year. Next is a swathe of countries taxing between 33 and 35%, including France, Belgium, Canada, Finland, Cuba, and Mexico – to name but a few. The US has varied taxation rates on bitcoin, according to the state you live in. Federal taxes aside, you could be located in a state with a very low tax take – don’t forget Puerto Rico is an autonomous state of the US – but overall you’ll need specialist advice.

Ouch, Taxes!

Other surprisingly low-tax countries include Switzerland (home to the bitcoin canton of Lugano) at up to 11.5% progressive federal taxes plus cantonal taxes, El Salvador at 0%, and Portugal at 0% for individual investors. Where do you not want to be taking your bitcoin gains? Japan, South Africa, and the UK will take a juicy $45,000 out of your $100,000, but Luxembourg hits the pain factor with 48.78% – nearly half of your gains.

And finally.

Much has changed around the world with the fallout of FTX and the low esteem of bitcoin held in America at the moment, but the price of bitcoin remains at a healthy $30,399.90 at the time of writing. If this remains the case, the projection for the price of bitcoin for the next years could be very positive. If bitcoin continues to rise, however, tax locations will definitely be an issue for the Hodlers.

Read the full Crypto Tax Report 2023: https://coincub.com/ranking/worldwide-crypto-tax-2023/

Disclaimer: The following examples are for illustrative purposes only and represent hypothetical scenarios based on certain tax rates at a specific point in time. Annual taxes are typically due at the end of the calendar year, not in July. Always consult a tax professional or legal expert in your specific jurisdiction for personalized advice.

Where would you pay the least tax on your bitcoin gains from last year?

🇦🇷 Argentina: 15% tax on crypto income gains.

🇧🇬 Bulgaria: EU-aligned, lowish income tax of 10% on crypto gains.

🇨🇾 Cyprus: Tax advantages for crypto gains, VAT exempted, residence visas offered.

🇬🇮 Gibraltar: Tax charged on overall income, no capital gains tax on crypto.

🇬🇷 Greece: 15% tax on individual crypto gains, visa scheme for property investors.

🇭🇰 Hong Kong: Income tax on professional trading, no capital gains tax on crypto.

🇭🇺 Hungary: Flat 15% tax rate on individual crypto trading profits.

🇰🇿 Kazakhstan: Low 15% tax on crypto mining gains.

🇱🇮 Liechtenstein: Low-taxation, 12.5% flat-rate tax on overseas crypto income.

🇱🇹 Lithuania: 20% tax on non-work-related income, including crypto.

🇳🇬 Nigeria: Classifies crypto as either commodity or security, 10% tax on long-term capital gains.

🇲🇹 Malta: Complex tax system, no capital gains tax on long-held digital currencies.

🇲🇾 Malaysia: Tax-free crypto transactions, frequent trading considered profession.

🇲🇽 Mexico: 30% corporate income tax on crypto assets.

🇵🇱 Poland: 19% tax on personal and large business crypto gains, 15% for smaller companies.

🇵🇹 Portugal: Tax-free for casual crypto income, up to 35% tax on commercial operations.

🇵🇷 Puerto Rico: Large tax savings, potential for zero tax on crypto capital gains.

🇷🇴 Romania: Flat 10% tax rate on crypto earnings exceeding 600RON per year.

🇸🇮 Slovenia: No capital gains tax on individual bitcoin sales.

🇹🇭 Thailand: 7% VAT exemption for digital asset trades, 15% capital gains tax on crypto income.

🇸🇬 SINGAPORE - Friendly regulatory environment with no capital gains tax on cryptocurrencies for individuals, but companies are taxed on their profits.

🇨🇭 SWITZERLAND - Known for the 'Crypto Valley', profits made by individuals are considered as personal income and subject to income tax progressive 11% federal tax plus cantonal tax, while professional trading is subject to corporate tax

🇻🇳 VIETNAM - Crypto is not recognized as a legal payment form but there are no specific regulations on crypto taxation, hence it falls into a legal gray area.

🇬🇪 GEORGIA - 0% - Despite being a hotspot for mining due to cheap electricity, cryptocurrency is unregulated and there's no specific legislation on taxation.

🇹🇷 TURKEY - Ban - Crypto transactions are tax-free unless they are part of a business operation. However, they're not legally accepted as a form of payment.

🇧🇪 BELGIUM - Cryptocurrencies are treated as speculative foreign currencies, with gains not subject to tax unless they result from professional activity.

🇫🇮 FINLAND - Crypto profits are taxed as capital income, at a rate of 30% (or 34% for profits over €30,000). Losses are deductible.

🇺🇸 UNITED STATES - Crypto taxation in the US can range from a short-term income tax of 37% to a long-term capital gains tax of 20%, varying significantly by state.

PUERTO RICO - As a US territory with its own tax laws, Puerto Rico can offer 100% tax exemption on all capital gains, including crypto, for those who relocate their business and establish residency.

CALIFORNIA - Despite having the country's highest income tax rate (13.3%), California is proactively fostering crypto adoption and regulation through its Office of Financial Technology and Innovation.

COLORADO - A frontrunner in the crypto revolution, Colorado boasts high crypto usage and legislation that encourages crypto ventures.

FLORIDA - Home to a vibrant crypto community and notable events like the Bitcoin Conference in Miami, Florida is discussing proposals to accept crypto for certain state taxes.

WYOMING - With no personal or corporate income tax and over 20 laws facilitating crypto businesses, Wyoming is one of the most crypto-friendly states in the US.

TEXAS - Texas' absence of personal income tax, pro-crypto laws, and low energy costs make it a hot spot for the bitcoin mining industry and other crypto ventures.

🔻 In the US 🇺🇸 , the demise of Silvergate, Signature, and Silicon Valley Bank sent shockwaves through the financial world.

🔻 In the UK 🇬🇧 crypto startups are facing challenges in securing banking services, leading many to turn to the EU for options.

🔥 Europe 🇪🇺 leads the way in providing crypto-friendly banking solutions, with over 120 banks across the continent offering services to individuals, companies, and crypto businesses.

🌍 France 🇫🇷, Germany 🇩🇪, Estonia 🇪🇪, Liechtenstein 🇱🇮, Malta 🇲🇹 and Switzerland 🇨🇭 are all competing to attract crypto firms with innovative regulatory regimes and forward-thinking policies.

🔼 Chinese🇨🇳 state-owned banks in Hong Kong 🇭🇰 start to attract local crypto firms, reflecting China’s new backing for the digital asset industry.

In Europe, governments are taking proactive steps to regulate the crypto industry and meet the growing demand for services. France's Bank of France governor is leading the charge for obligatory licensing of digital asset service providers, while Germany's crypto-friendly banks are partnering with crypto firms to offer digital asset services. Estonia, Liechtenstein, and Malta are also positioning themselves as the go-to destinations for crypto businesses looking for a banking partner.

Switzerland's Sygnum and SEBA banks are fielding an influx of onboarding requests from international crypto firms.

With over 55 banks across the world offering crypto services, Europe 🇪🇺 is leading the way in providing innovative banking solutions to the crypto industry.

Together with our partners from Panterrafinance and Finery Markets we have compiled a list of +125 crypto-friendly banks. Read the full report here: https://coincub.com/ranking/report-crypto-friendly-banks-in-2023/

Singapore and Hong Kong Make Their Mark.

The crypto world was rocked last year by the sudden collapse of major player FTX, serving as a wake-up call for governments around the world. This has highlighted the need for more comprehensive and effective regulation in the crypto industry, a pressing concern that has taken centre stage in the wake of the collapse.

A recent report by Coincub, the leading provider of bespoke information and analysis on the crypto economy, has just released its latest global crypto rankings for Q4 2022. The report, which is based on a comprehensive metric of data, has revealed that the USA is now the world's top crypto economy, overtaking Germany which slipped to second place.

In Q4 2022, the USA took the top spot as the world's leading crypto economy, with Germany slipping to second place and Singapore and Hong Kong moving up to third and fourth respectively. According to the latest rankings compiled by Coincub, the USA's rise to the top was driven by its comprehensive regulatory framework and strong finance, trading, and job market within the crypto space.

While the FTX collapse has significantly impacted the crypto world, the industry has shown resilience in the face of adversity. The global rankings indicate continued growth and stability, with many countries embracing the wider crypto space and moving up the ranks. But new regulation is on the horizon for the industry, with new regulations expected to be rolled out in the coming months.

As the crypto industry continues to boom at the beginning of 2023, it is important for all to stay informed and up to date on the latest developments in their country as each government has its own mind about how to deal with the crypto world. The Coincub ranking provides a comprehensive view of the state of the crypto economy, covering a range of factors such as government regulation, finance, population, tax, talent, proliferation, trading, fraud, and the environment. The ranking is based on a comprehensive metric of data, making it one of the most comprehensive and in-depth analyses of the crypto world to date.

🌐 Government regulation - Positive, Negative and Outlook

🏦 Finance - Banks, VASPs and Crypto exchanges - Crypto pensions, and services - Fundraising and Venture Capital presence - CBDC stage - Government and companies own bitcoin in treasury

🏧 Population - Google search and interest for bitcoin and crypto - Bitcoin ATMs

⚠ Tax - Income tax, thresholds - Capital Gains Tax - Taxes for enterprises and on transactions

😼 Talent - Blockchain universities, leading and % of total - Blockchain, crypto and bitcoin jobs - Jobs per capita

📶 Proliferation - Crypto companies, incl per GDP - Bitcoin mining - Bitcoin nodes - ICOs (Initial Coin Offerings)

💲 Trading - crypto transactions volume - Crypto ownership and as % of the population

🔗 Fraud - Fraud cases

💚 Environment - Green crypto firms (%) - ICOs on Energy - Environmental demerits

The crypto industry is poised for change in the coming months, as governments around the world work to implement effective regulations in the wake of the FTX collapse. While there is certainly some uncertainty in the air, the continued growth and stability seen in the latest rankings provide a glimpse of the bright future ahead for the crypto industry. Stay tuned for the latest developments, as the crypto world is sure to have a new twist in store in Q1 2023.

Here is the free report: https://coincub.com/ranking/q4-2022-global-crypto-ranking/

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Top crypto-curious nations for Q3 2022

Top countries for crypto activity in Q3 2022

Top five countries with cryptocurrency ban

Top crypto-hoarding populations 

Top crypto ATMs nations worldwide

Germany ranks first again in the Q3 2022 Global Crypto Ranking. US drops, Switzerland goes up to second place.

Still highlighting Germany's top place is its tax and savings policy towards long-term crypto investment, which involves some of the country's largest and most respected financial institutions. Long-term crypto investment also featured strongly in the USA's top place in Q2, but the USA's crypto taxation policies are quite onerous and do not offer any particular form of incentive for crypto investors. That said, the US is one of the first countries first country to allow crypto to form part of strategic workplace pensions. Much more legislation is yet to come from the US which may change the position in Q4.

Download the full report PDF for free HERE: https://coincub.com/ranking/q3-2022-global-crypto-ranking/