From Portugal To Estonia, We Take A Look At Some Of The Most Crypto-friendly Places Around The Globe
With almost no taxes on exchange and capital gains, is it surprising that cryptocurrency investors are flocking to these countries?
In 2017, a Dutch family traded their 2,500-square-foot and every other asset they own to go all in on bitcoin. Back then, the price of bitcoin was around $900. Today it trades around $41,000, after peaking at $69,000 in November.
Today, after travelling for five years through 40 different countries, the Taihuttu family, also known as the “Bitcoin family,” has decided to lay down their roots in Portugal. Why? Because they’ll pay a total of 0 percent tax on capital gains from cryptocurrencies.
While speaking to CNBC, Didi Taihuttu said, “You don’t pay any capital gains tax or anything else in Portugal on cryptocurrency. As long as you don’t earn cryptocurrency for providing services in Portugal, you’re in the clear. That’s a very beautiful bitcoin heaven.”
Sounds too good to be true, right? It isn’t. Considering the Indian government’s decision to levy a 30 percent flat tax on capital gains, we’ve compiled a list of the 7 topmost crypto-friendly places in the world.
If you’re thinking of places to settle with a big wallet of 1s & 0s, there is no better place than Portugal. Good weather, great food and most important of all, friendly crypto policies. As per the law, individuals who profit from the sale of cryptocurrency are not taxed on the gains.
While any exchange of cryptocurrency to another fiat currency is also devoid of any taxes, there is one exception. If you’re an individual who’s getting paid in cryptocurrency in exchange for a service, you’ll need to cough up some Euros.
However, if you’re a corporation, tough luck. The perks are only limited to individuals. Companies do have to pay some sort of tax on their use of crypto.
Things are slightly different in Germany. The EU country hasn’t yet declared cryptocurrency as a legal tender across the nation, so mostly it is considered as private money. Similarly, the laws here favour long-term investment in crypto, as opposed to day trading.
For example, individuals who hold cryptocurrency for more than a year won’t pay any tax on it, regardless of its value. However, if you do trade it within a year, capital gains taxes are applied on amounts bigger than €600. And just like Portugal, corporations in Germany do not enjoy these benefits.
Singapore already enjoys the reputation of being one of the most business-friendly places on the globe. Now, it is slowly emerging as a safe haven for crypto investors as well. Its central bank, the Monetary Authority of Singapore, believes that the crypto ecosystem should be monitored to prevent money laundering and other illegal activity. However, innovation should not be stifled. After all, there’s a reason why Singapore is known as the fintech hub of Asia.
Residents and companies do not have to pay any capital gain tax here, nor are the existing funds are subjected to taxation. However, if you’re a corporation is based in Singapore and operate as a crypto exchange, your income will be taxed.
Is it really surprising to see Switzerland, here? Known for its chocolates and super-secretive banks, Switzerland has been slowly climbing up on the list of crypto investors. However, before you pack your bags there are some complications to note.
The country is divided into 26 cantons, and each of these cantons has different rules and regulations on what can be done and what can’t. For example, if you’re in Zurich, capital gains from movable private wealth are not taxed.
This means capital gains on Bitcoin and other cryptos could be tax-free. However, if you’re mining crypto, your gains will be treated as regular income. Similarly, in Bern, both mining and trading are treated as regular income. So make sure you do your research.
Perhaps the name that tops the list of any existing or potential investor is Malta, and for good reason. Being a member of the European Union, crypto projects based in Malta can operate freely through the EU. This is why the biggest name in the crypto exchange, Binance moved their base here from Hong Kong.
There are no hard regulations on cryptocurrencies here. If you become a citizen of Malta (which you can for $1.78 million), the possessions of any crypto-based assets will not attract any capital, wealth or inheritance taxes. However, this lax attitude hasn’t gone without its share of criticism.
The Financial Action Task Force (FATF), an intergovernmental policy-making body found that €60 billion worth of cryptocurrency had passed through Malta’s borders. While there were no allegations of it being used for anything illicit, the lack of a regulatory body was highly scrutinized.
It is said among all other bitcoin-friendly countries in Europe, Slovenia ranks first. The government here has publicly put their support towards bitcoin and cryptocurrencies of other kinds.
Capital gained from trading in crypto is not liable to income tax here. Similarly, the mining of cryptocurrencies does not fall under any tax bracket.
Estonia is slowly becoming the Wakanda of our reality. Here, over 99 percent of financial transactions occur digitally. The country, which is almost run like a tech company, uses blockchain technology to provide the majority of government services. This includes tax filing or registering a car online, without ever stepping a foot outside.
The country’s LHV Bank was one of the first in the world to embrace blockchain. But there are some caveats here. While any transaction with bitcoin or any other cryptocurrency is free of tax, profit earned through trading is taxable, along with mining, whose earnings are scrutinized under income tax.