Crypto taxes are major issues that users of cryptocurrency face every day. Although many countries impose income tax or capital gains tax on cryptocurrency, there are some countries where you pay little or no taxes. In this article, there are top crypto tax-free countries in 2022.
It is necessary to remember that the rules that govern cryptocurrency taxes are constantly changing. Possibly, countries that currently have no cryptocurrency taxes can become crypto-shy tomorrow. So, if you are looking to make a relocation, make sure that you speak to a lawyer and tax advisor for clarification.
Top 10 Cryptocurrency Tax-Free Countries
A law was passed in Belarus in March 2018 regarding the authorization of cryptocurrency activity. It exempts individuals and enterprises from paying taxes until 2023. In 2023, the authorities in charge will review this regulation.
This law is because Belarus seeks to encourage the growth of the digital economy. Therefore, mining and investing in cryptocurrency is considered a personal investment under the law and tax-free.
You will be considered a tax resident in Belarus if you spend more than 183 days a year, especially if you do not have tax residency elsewhere. You will also be seen as a tax resident if you have a residence permit in Belarus or you are a Belarus citizen, no matter where you live.
The Cayman Islands is a global financial centre and one of the world’s most creative and business-friendly places today. It is one of the most popular crypto-tax-free countries. Its government does not impose any form of tax on the issuance, holding, or transfer.
However, original documents executed in the Cayman Islands or carried into the Cayman Islands after execution will be subject to stamp duty.
This is the first Latin American country to make Bitcoin legal tender. This event happened in September 2021, with the country providing a government-issued digital wallet software and giving users the freedom to spend tokens in all forms of transactions.
The country’s citizens can pay debts and previous obligations in Bitcoin, expressed in US dollars. Bitcoin exchanges are exempted from capital gains taxes. In El Salvador, you are a tax resident if you spend more than 200 days a year in the country or if your major source of income is in El Salvador.
In Germany, cryptocurrency is seen as a personal asset, so it is subject to individual income tax, not capital gains tax. It is important to note that Germany only taxes cryptocurrency if it is sold in the same year the owners bought it. Also, cryptocurrency gains up to €600 per calendar year are tax-free.
You become a tax resident in Germany if you stay in Germany for up to 6 months in a year. If you are an EU citizen, you can move to Germany and start residence there. But if you’re a non-European, you must apply for a residence visa before you take residence.
In Malaysia, cryptocurrency transactions are tax-free for individuals because they are not seen as capital assets or legal money in the country. But there is a stipulation that they are tax-free just as long as they are not frequent or repetitive.
This means that if you are a day-to-day trader, you have to pay tax on your cryptocurrency. Also, businesses that are involved in cryptocurrency will pay income tax. You are considered a tax resident if you spend more than 182 days a year in Malaysia.
This is a cryptocurrency tax haven. In Malta, cryptocurrencies are seen as “unit of account, means of exchange, or store of value.” As a result, there is no need to pay capital gains tax on long-term gains made from selling bitcoin because it is a store of value.
But cryptocurrency trades are seen as day trade equities or shares and must pay a 35 per cent business income tax. But it is possible to rescue the tax rate depending on your earnings and where you live.
You become a tax resident if you live more than 182 days a year in the country. Non-EU/EEA/Swiss citizens are allowed to move into the country, while EU/EEA/Swiss citizens are not.
This is a cryptocurrency hotspot. It is one of the best crypto-tax-free European countries. Since 2018, proceeds from the sale of cryptocurrency have been tax-free. Also, cryptocurrency trading is not seen as an investment income, so it is tax-free.
Your cryptocurrency is free from VAT and income tax if you are not a business. This makes Portugal a crypto-tax-free country for many investors.
You are declared a tax resident if you own a home or stay in the country for more than 183 days. EU citizens can move to Portugal, although you will need a registration certificate if you stay more than three months. Other citizens must first get a visa.
This is a US unincorporated territory, but it is considered a foreign country regarding federal income tax. Resultantly, the country sets its own tax rules. Compared to the US Federal Income Tax, Puerto Ricans pay a very low Territorial Income Tax, and digital assets purchased while in the country are free from capital gains tax.
If you spend more than 183 days a year in Puerto Rico, you become a tax resident.
Specific tax regulations in Singapore imply that you do not have to pay capital gains tax if you sell or trade cryptocurrency in the country. Using cryptocurrency to pay for goods and services is seen as a swap rather than a payment, so the goods and services may be subject to goods and services tax, although the payment token will not.
However, if you are running a cryptocurrency trading company, you must pay income tax. You are a tax resident if you stay in Singapore for up to 183 days a year.
If you are a day trader in Switzerland, you must pay income tax on cryptocurrency mining. You also have to pay the wealth tax, with its rate being dependent on where you live in the country. But your cryptocurrency gains are excluded from the capital gains tax, especially for investors who do not trade on a professional basis.
In conclusion, you must know that tax is a major issue and must be handled very carefully to avoid risks, especially if you become a tax resident of any country. It is always recommended that you get help from local advisors.