Cryptocurrency tax and rules by country


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

Expats investing in crypto have a tougher time than most because holding and trading are treated differently when crossing borders.

To help you keep up with the rapidly changing world of crypto, here is an explanation of the legal and tax treatment of digital currency investments in some leading economies.

United States

The United States is one of the world’s centers for cryptocurrency and blockchain developers. Since China banned crypto-mining in September 2021, the market shifted to make the United States the leader in the discovery of new bitcoins and other “mined” cryptos.

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, such as publishing a detailed prospectus for an initial coin offering (ICO).

Cryptos are not recognized as currency but as property, which means they are not exempt from capital gains tax when sold or income tax when generated. interest or other returns.

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

China

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

China was the largest crypto mining community in the world until the ban. The miners have now moved to the United States 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. This means that capital gains tax applies on disposals and income tax is levied on interest.

Traders may pay tax on profits, depending on the amount of trades they make and the level of profit they make. Companies that trade cryptos pay corporation tax on all profits and gains.

The regulator, the Financial Conduct Authority (FCA), has banned crypto derivative trading.

Australia

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

Singapore

treats cryptocurrency similarly to the UK and Australia. Cryptos are not legal tender but are taxable, but a favorable tax regime means that long-term gains are often tax exempt. However, professional setups, like businesses, pay income tax on regular crypto earnings.

European Union

Cryptography is not illegal in the European Union, but the EU is working on a common licensing and regulatory standard. No EU country accepts cryptos as legal tender but treats them as property. How property is taxed varies from state to state. Some apply capital gains and income taxes, while others charge cryptos taxes at a zero rate.

Countries with Crypto Bans and Taxes

The United States Library of Congress maintains a list of countries where cryptocurrencies are illegal. The lists cover absolute and implied prohibitions.

An absolute prohibition is when any cryptocurrency activity is illegal. An implied ban covers stopping banks and exchanges from trading cryptocurrencies or offering services to trade cryptocurrencies.

Nine countries have absolute bans and 42 have implied 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
Bahamian No No
Bahrain No Yes No
Bangladesh Yes No
Belarus No No Yes
Belgium No No Yes
Benign 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
Green cap 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
Ivory Coast No Yes
Croatia No No Yes
Cuba No No
Cyprus No No Yes
Czech Republic No No Yes
Democratic Republic of 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
Luxemburg No No Yes
Macau 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 Congo No Yes
Romania No No Yes
Russian Federation No No Yes
Saint Kitts and Nevis No No Yes
St. 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
Go No Yes
Tunisia Yes No No
Turkey No Yes Yes
Turkmenistan No Yes No
Ukraine No No Yes
United Arab Emirates No Yes Yes
UK No No Yes
United States No No Yes
Uzbekistan No No Yes
Venezuela No No
Vietnam No Yes No
Zimbabwe No Yes No
Source: United States Library of Congress

Taxes on expatriates and cryptocurrencies

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

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

Cryptocurrency tax and rules FAQ by country

What is Crypto Mining?

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

What is a security?

Securities are financial instruments having a monetary value. Titles are generally of three types:
Equity – a property right, such as stocks and shares
Debt – loans with regular payments, such as a mortgage
Hybrids – a mix of debt and equity

What is an ICO?

ICO stands for Initial Coin Offering. ICO is when a crypto start-up seeks funding from investors, such as a company that goes public and issues shares for the first time.

What is a blockchain?

A blockchain is a database or ledger that underpins a cryptocurrency. The blockchain is decentralized 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 private room?

Private coins are high-security cryptos designed to protect the identity of the holder. Major privacy coins include Monero, Dash, Z-cash, Verge, and Beam.

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