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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