From Ukraine to Bermuda: why are more and more countries becoming cryptocurrency-friendly?

Switzerland wants to make Bitcoin a reserve asset like gold

Ukraine joined the list of cryptocurrency-friendly countries

What other countries did not tax bitcoin in 2021?

  • Belarus is taking an experimental approach to cryptocurrencies. In March 2018, a new law legalized cryptocurrency activity here. Crypto market participants in Belarus, represented by all individuals and legal entities, received freedom from taxes until 2023. Mining and investing in cryptocurrencies are considered personal investments legally. There is no income or capital gains tax.
  • Germany offers a unique approach to taxing digital currencies such as bitcoin. Unlike most other nations, Europe’s largest economy treats bitcoin as private money, not currency, commodities, or stocks. For German residents, any cryptocurrency that is held for more than a year is not taxed. The amount of the assets does not matter. If assets are held for less than a year, no capital gains tax is assessed on sales for amounts not exceeding 600 euros. Businesses operate under different rules. A startup registered in Germany has to pay corporate income tax on profits from cryptocurrency, just like any other asset.
  • Hong Kong. When buying digital assets for long-term investment purposes, any gain on disposal is not subject to income tax in Hong Kong. This isn’t related to corporations. Their crypto profits from Hong Kong are taxable. Also, in Hong Kong, bitcoin is considered a virtual commodity for tax purposes.
  • El Salvador in June 2021 became the first country in the world to recognize bitcoin as legal tender. The country also exempted foreign investors from paying tax on their bitcoin profits. The move underscores the country’s intention to attract foreign investors with cryptocurrency portfolios.
  • In Malaysia, cryptocurrency transactions are not yet taxed, and cryptocurrencies are not subject to capital gains tax. The reason is the digital currencies are not considered assets or legal tender at the state level. However, profits from active cryptocurrency trading may be treated as income and therefore considered as taxable income.
  • Malta does not apply capital gains tax to established digital currencies such as Bitcoin. However, cryptocurrency transactions are comparable to day trading in stocks. They include business income tax at 35%. However, the tax can be reduced to 5–0 percent with “structuring options” available under the Maltese system.
  • Portugal has one of the most favorable tax regimes in the world. Income from the sale of cryptocurrencies by individuals is tax-free since 2018. Cryptocurrency trading is not considered investment income (which is usually taxed at 28%). However, businesses that accept digital currency as payment for goods and services must pay income tax.
  • In Singapore, companies must pay income tax if the main business is trading in cryptocurrency, or if cryptocurrency is accepted as payment for goods and services.
  • Slovenia treats individuals and legal entities separately under its cryptocurrency taxation system. Individuals are not subject to capital gains tax on the sale of crypto, and profits are not considered income. However, companies that receive payments in cryptocurrency or as a result of mining are required to pay tax at the corporate rate. Distributions of tokens during an ICO are taxed up to 50%.
  • Bermuda is “the one country” that does not tax cryptocurrency profits. Bermuda is regarded as a tax haven. Digital assets have no special status but operate in a general low-tax format.

Conclusion

Cratos is a licensed and regulated in the EU crypto exchange service

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Cratos is a licensed and regulated in the EU crypto exchange service

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