Cryptocurrency Tax And Rules By Country


    Bitcoin may have been around for more than a decade, but governments have yet to develop ways to regulate cryptocurrency.

    Expats investing in crypto have a more challenging time than most, as holding and trading is treated differently as they move across borders.

    To help keep up with the fast-moving world of crypto, here’s an explanation of the legal and tax treatment of digital currency investments in some leading economies.

    USA

    The US is one of the global centres for cryptocurrency and blockchain developers. Since China banned crypto mining in September 2021, the market has shifted to make the States the leader in uncovering new bitcoin and other ‘mined’ crypto.

    The US financial regulator, the Securities and Exchange Commission (SEC), considers crypto a security. Strict rules to protect investors surround the launch and ongoing administration of securities, like publishing a detailed prospectus for an initial coin offering (ICO).

    Cryptos are not recognised as currencies but property, which means they are not exempt from capital gains taxes when sold or income taxes when generating interest or other returns.

    Two cases to watch are the SEC v Ripple Labs, the company behind crypto XRP, and the SEC v Coinbase, the leading US crypto exchange.

    China

    China ordered crypto exchanges to close and stopped them from providing services in the country in 2017, prompting Binance, the world’s largest exchange, to uproot and move to the Cayman Islands. A ban on mining crypto followed the move in May 2021.

    China was the world’s largest crypto mining community until the ban. Miners have now relocated to the US and Kazakhstan.

    The government refuses to treat crypto as legal tender.

    UK

    Crypto is not illegal in the UK but is treated as property rather than legal tender. That means capital gains tax applies to disposals, and income tax is charged on interest.

    Traders may pay income tax on profits, depending on how much trading they do and the level of profits they make. Companies trading cryptos pay Corporation Tax on any profits and gains.

    Regulator the Financial Conduct Authority (FCA) has banned derivative trading in cryptos.

    Australia

    Cryptocurrency is property, not legal tender in Australia, which triggers capital gains tax on investment profits. ICOs are tightly monitored, but exchanges cannot offer privacy coins.

    Singapore

    treats cryptocurrency in ways similar to the UK and Australia. Cryptos are not legal tender but property for tax, but a benign tax regime means long-term gains are often exempt from tax. However, professional set-ups, like companies, pay income tax on regular crypto gains.

    European Union

    Crypto is not illegal in the European Union, but the EU is working towards a common licensing and regulatory standard. No EU nation accepts cryptos as legal tender but treats them as property. How property is taxed varies between states. Some apply capital gains and income taxes, while others charge tax to cryptos at a zero rate.

    Countries With Crypto Bans And Taxes

    The US Library of Congress keeps a list of countries where cryptocurrencies are illegal. The listings cover absolute and implicit bans.

    An absolute ban is when any cryptocurrency activity is illegal. An implicit ban covers stopping banks and exchanges from dealing in cryptocurrencies or offering services to trade cryptocurrencies.

    Nine countries have absolute bans and 42 implicit bans.

    Country Crypto Ban – Absolute Crypto Ban – Implicit Crypto tax
    Albania No No Yes
    Algeria Yes No No
    Angola No No No
    Anguilla No No No
    Antigua and Barbuda No No
    Argentina No No Yes
    Australia No No Yes
    Austria No No Yes
    Azerbaijan No No Yes
    Bahamas No No
    Bahrain No Yes No
    Bangladesh Yes No
    Belarus No No Yes
    Belgium No No Yes
    Benin No Yes
    Bermuda No No No
    Bhutan No No
    Bolivia No Yes No
    Brazil No No Yes
    Brunei No No
    Bulgaria No No No
    Burkina Faso No Yes
    Burundi No Yes
    Cabo Verde No No No
    Cameroon No Yes
    Canada No No Yes
    Cayman Islands No No No
    Central African Republic No Yes
    Chad No Yes
    Chile No No Yes
    China Yes No
    Colombia No No Yes
    Costa Rica No No Yes
    Côte d’Ivoire No Yes
    Croatia No No Yes
    Cuba No No
    Cyprus No No Yes
    Czech Republic No No Yes
    Democratic Republic of the Congo No Yes
    Denmark No No Yes
    Ecuador No Yes No
    Egypt Yes No No
    El Salvador No No Yes
    Estonia No No Yes
    European Union No No No
    Finland No No Yes
    France No No Yes
    Gabon No Yes
    Georgia No Yes Yes
    Germany No No Yes
    Gibraltar No No Yes
    Greece No No Yes
    Guernsey No No Yes
    Guyana No Yes No
    Hong Kong No No Yes
    Hungary No No Yes
    Iceland No No Yes
    India No No Yes
    Indonesia No Yes No
    Iraq Yes No No
    Ireland No No Yes
    Isle of Man No No No
    Israel No No Yes
    Italy No No Yes
    Japan No No Yes
    Jersey No No Yes
    Jordan No Yes No
    Kazakhstan No Yes No
    Kenya No No Yes
    Kuwait No Yes
    Kyrgyzstan No No Yes
    Latvia No No Yes
    Lebanon No Yes No
    Lesotho No Yes No
    Libya No Yes No
    Liechtenstein No No Yes
    Lithuania No No Yes
    Luxembourg No No Yes
    Macao No Yes
    Malaysia No No Yes
    Maldives No Yes
    Mali No Yes
    Malta No No Yes
    Mauritius No No No
    Mexico No No
    Moldova No Yes No
    Montenegro No No No
    Morocco Yes No No
    Namibia No Yes No
    Nepal Yes No
    Netherlands No No Yes
    New Zealand No No Yes
    Niger No Yes
    Nigeria No Yes No
    Norway No No Yes
    Oman No Yes No
    Pakistan No Yes
    Palau No Yes No
    Philippines No No
    Poland No No Yes
    Portugal No No Yes
    Qatar Yes No No
    Republic of the Congo No Yes
    Romania No No Yes
    Russian Federation No No Yes
    Saint Kitts and Nevis No No Yes
    Saint Lucia No No
    Samoa No No
    Saudi Arabia No Yes No
    Senegal No Yes
    Serbia No No Yes
    Singapore No No Yes
    Slovakia No No Yes
    Slovenia No No Yes
    South Africa No No Yes
    South Korea No No Yes
    Spain No No Yes
    Sri Lanka No No
    Sweden No No Yes
    Switzerland No No Yes
    Taiwan No No Yes
    Tajikistan No Yes No
    Tanzania No Yes No
    Thailand No No Yes
    Togo No Yes
    Tunisia Yes No No
    Turkey No Yes Yes
    Turkmenistan No Yes No
    Ukraine No No Yes
    United Arab Emirates No Yes Yes
    United Kingdom No No Yes
    United States No No Yes
    Uzbekistan No No Yes
    Venezuela No No
    Vietnam No Yes No
    Zimbabwe No Yes No
    Source: US LIbrary of Congress

    Expats and crypto taxes

    How crypto profits are taxed for expats depends on their residence status.

    For example, a British expat on temporary assignment to Germany is a likely UK taxpayer and subject to UK cryptocurrency rules. However, an expat who has permanently moved to Spain is subject to Spanish taxes and crypto laws.

    Cryptocurrency Tax And Rules By Country FAQ

    What is crypto mining?

    Some cryptos, like Bitcoin, generate new coins when complex equations built-in to the blockchain are solved. The process of releasing new coins is called mining.

    What is a security?

    Securities are financial instruments with a monetary value. Securities tend to come in three types:
    Equity – a right of ownership, like stocks and shares
    Debt – loans with regular payments, like a mortgage
    Hybrids – a mix of debt and equity

    What is an ICO?

    ICO stands for initial coin offering. The ICO is when a start-up crypto seeks funding from investors, similar to a company going public and issuing shares for the first time.

    What is a blockchain?

    A blockchain is a database or ledger that underpins a cryptocurrency. The blockchain is decentralised on a peer-to-peer network, so no one person or computer controls the crypto. The P2P network monitors and confirms transactions before they are locked into the blockchain.

    What is a privacy coin?

    Privacy coins are cryptos with enhanced security designed to protect the holder’s identity. Leading privacy coins include Monero, Dash, Z-cash, Verge and Beam.

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