9 Bitcoin Tax Free Countries That Saves Your Bitcoin Gains
Bitcoin tax free countries have been the most searched term on the internet these days and thus we bring you a complete list of the total nine countries that have tax-exempted the residents on crypto holding or trading or even earning. However, there are some other taxes levied on cryptocurrencies.
Everyone wants to save on their gains be it with fiat currency or cryptocurrency. But with the tax liabilities, it becomes quite difficult for the bitcoin holders to save on the profit they had earned from the BTC investment. The taxation on the bitcoin cryptocurrency varies largely from one country to the other. On the contrary, there are specific countries that do not impose any taxation on the bitcoin gains and are thus known as bitcoin tax free countries.
The tax free law for the bitcoin holders in these countries have given a clear outlook on the friendlier legislation and had permitted the investors to buy, sell and as well as retain the digital assets without the need to pay taxes to the government.
Cryptocurrency Tax Friendly Countries In The World
You must be excited to know which are all the countries that do not levy any taxes on bitcoin investment. Here is the list of those nine bitcoin tax free countries that are most notable as the crypto-friendly countries.
Switzerland, also known as “Crypto Valley” might be your most favourite destination. But do you know that it has levied no taxes on bitcoin? Well, yes, you heard it right. It has one of the most contemporary tax policies. In this country, the crypto profits that have been made by a qualified individual via trading and investing are regarded as tax-exempt capital gains.
Another country that treats businesses and individuals distinctly under its cryptocurrency tax system in Slovenia. The residents of this country, when they sell Bitcoins do not have to pay any taxes while the gains are also not considered to be an “income”.
But the businesses receiving payments in cryptocurrencies or via the mining of cryptocurrencies have to pay a specific amount of corporate tax based on the crypto tax rate of the country. However, the Mediterranean country does not allow business operations solely in the cryptocurrency like just accepting bitcoin as a method of payment.
Singapore is known to be the hub for fintech industries. As the taxes on capital gains do not exist in Singapore, thus, individuals and corporations are not liable to pay taxes on holding cryptocurrency.
On the contrary, Singapore-based companies are liable to pay income tax if they conduct their core businesses on cryptocurrency trading or they accept crypto as payment.
The reason behind this is that the authorities consider the payment tokens like Bitcoin to be “intangible property” and not legal tender. The cryptocurrency payment constitutes a barter trade and the goods and services are taxable but not the payment token itself.
For encouraging innovation, Portugal has adopted liberal laws for taxes on cryptocurrencies. Thus, Portugal is regarded as one of the most crypto-friendly countries in the world.
Since 2018, all the proceeds from the cryptocurrency sale by the individuals have been tax-exempted. The trading of cryptocurrency is also not considered to be an investment income, which otherwise would have been subjected to a tax rate of 28%.
Nevertheless, the businesses accepting digital currencies against goods and services fall under the income tax liable category.
The blockchain island Malta’s government recognizes Bitcoin to be a unit of account, or a store of value, or even a medium of exchange. The country does not levy capital gains tax on the digital currencies that are held for longer period such as Bitcoin. The crypto trades, on the other hand, are taken as the day trading in the stock shares that attracts business income tax of 35%. But these tax rates can be mitigated between 5% to 0% utilizing the structuring options that are listed under the Maltese law system.
The fiscal guidelines of Malta, as published back in 2018 had also discriminated between the so-called financial tokens and bitcoin that are the same as interest, dividends, and/or premiums. The former is considered as income and is taxed at the rate applicable on that.
Malaysia is one of those listed countries, where the cryptocurrencies are presently tax-free because they do not qualify for the capital gains tax. The authorities of Malaysia do not consider digital currencies to be assets or legal tender.
But the income tax involving the cryptocurrencies for the individual taxpayers and businesses are active.
But the situation is likely to change. The director of the Malaysian Tax Department, Mohamad Fauzi Saat, has commented back in 2018 that the country has been committed to working towards the issuance of comprehensive guidelines on the crypto tax treatment by the end of 2020.
Hong Kong :
Hong Kong is not specifically a country but it is a Chinese Special Administrative Region bearing theoretical autonomy over its affairs. A global crypto leader at PWC named Henri Arslanian mentions that whether or not the cryptocurrencies are taxed solely depends on the usage of the digital currency.
“If digital assets are bought for long-term investment purposes, any profits from disposal would not be chargeable to profits tax,” he wrote in March when the directive was introduced.
But he has also mentioned that these laws do not apply to corporations and that Hong Kong sourced gains from the crypto business activities are promptly taxable.
Germany’s approach towards digital currency taxation such as Bitcoin is much unique. Bitcoin (BTC) has been regarded as “private money” opposing the commodity, stock, or currency. This consideration is almost similar to most of the other European States.
The best part is that the German law for cryptocurrencies states, the residents holding cryptocurrency over a year will not have to pay the taxes despite the amount. But, if the digital assets are held for less than a year, the residents will not be liable to pay taxes on the sale of the assets, as long as the amount is within 600 Euros or $692.
The rule for businesses is a bit different, however. A Germany-based startup company is liable to pay taxes on the bitcoin gains or crypto gains, as other assets.
Belarus is currently adopting an experimental approach to cryptocurrencies or digital coins. Back in March 2018, a new law was passed that legalized the activities involving cryptocurrencies in the East European state. The law also exempts the businesses and individuals involved in such cryptocurrency activities from taxes until 2023, till there is a review of the law.
Mining and investing in cryptocurrencies are considered personal investments and thus they are exempted from capital gains and income tax.
Thus, here we have come to the end of the list of the countries that do not pay taxes on Bitcoin or other cryptocurrencies. Here are all the details of how the residents are benefitted from the tax-free countries. If you have been searching for how to cash out bitcoins without paying taxes or how to not pay taxes on bitcoin, then this article would help you to some extent.