For any serious crypto trader or Bitcoin “HOLDer”, taxes are a big deal. While some countries struggle to regulate cryptocurrencies, others fully embrace them. On the other side of the spectrum there are countries like the U.S. which have fully regulated cryptocurrencies, but, because the IRS (Internal Revenue Service) considers assets or properties, according to many, the taxes are astronomical.
In this article, we will look at the world’s best countries for crypto holding, tax-free crypto countries, or tax haven crypto countries:
First on our list is a country with one of the world’s top economies, Germany. In Germany, Bitcoin or any other cryptocurrencies are not considered stock, commodity, or currency for that matter. Instead, Bitcoin and cryptocurrencies fall into a special category called “private money.”
Under the rule 23 EStG, trading Bitcoins (or other cryptos) is considered a private sale which makes it totally tax-free. This is only part of the truth, as the law also states that anyone trading Bitcoins or altcoins are exempt from paying capital gains taxes ONLY if the gains are not higher than 600 EUR. Furthermore, investors deciding to sell their Bitcoin and altcoins after a period of one year from the purchase date are also fully exempt from taxes. Still, short-term trades are still taxed at 28%. Hence, Germany can be considered as a tax-free crypto country, but only partially.
It’s unsurprising that Malta is also included on our list. Malta has since long been the official crypto haven. It’s a sovereign city-state that has made a name for itself mostly for being one of the go-to spots for the rich and famous, but more recently, for being the best pro-crypto legislation state of them all. Any EU citizen that holds crypto for longer than 183 days is exempt of all crypto taxes, which makes it a very good (and exotic) proposition for all EU crypto HOLDers and investors.
Denmark is not only one of the most bike-friendly countries in the world, but also one of the most crypto-friendly. All crypto capital gains in Denmark are fully tax exempt. What’s more, crypto trading is not taxed (yet, at least).
Bitcoin is neither considered a currency nor a commodity in Singapore, even though the country does tax profits resulted from digital currency trading, but only in the case of businesses. Individuals, on the other hand, are completely exempt from these types of taxes since there are no specific rules set in place just yet.
The country’s government has been hard at work on passing various pro-blockchain/pro-cryptocurrency legislations. These events have made Singapore one of the best countries for crypto startups, as well as for those interested in holding cash in offshores.
Slovenia is known for its beautiful mountainous appeal, but has recently become a crypto haven for individual investors. In Slovenia, capital gains are not taxed and neither considered part of the income. Even though income from crypto mining is taxed, cryptocurrency trading is fully exempt.
The Cayman Islands
Considered by many to be international tax havens, the islands have fully embraced cryptocurrencies and all their surrounding implications. In the Cayman Islands, ICOs are perfectly legal, unregulated crypto exchanges are allowed, and businesses (including crypto businesses) are not taxed.
Belarus, the not so popular Easter European country has displayed one of the most open minded approaches to all-things-cryptocurrency made over the last couple of years. In December 2017, the president of Belarus declared all cryptocurrencies, smart contracts, and ICOs fully legal. What’s more, in Belarus cryptocurrency mining, trading, and any sort of capital gains resulted from these actions are tax-free until January 1st, 2023.
Puerto Rico, mostly known for its nightlife, lush rainforests, and perfect beaches, is one of the few places on Earth where US citizens can go “offshore.” Because the US considers cryptocurrencies to be assets and commodities, crypto holders and investers are required to pay immense taxes. However, any US citizen that lives in Puerto Rico for at least 5 months a year is legally exempt of any form of tax.
Even though the number of countries that are offering tax exemption in their constituency for Bitcoins (and other cryptocurrencies) is not so impressive, it’s worth noting that as cryptos become more mainstream with each passing day, this situation might very well change.
Sure, there are also countries that unofficially offer tax exemption for Bitcoin and cryptos (partly because they are unregulated), but those are not reliable locations and should not be considered viable by any serious investor.