Coincub annual tax ranking report shows that Germany offers its residents the best tax system in the world, but Belgium is one of the worst places to own cryptocurrencies due to its high taxation.
coin turnip annual report ranks countries using a scoring system that aggregates indicators such as government policies, taxes, regulations, trade volume, and fraud.
Some countries have adopted low tax rates to maintain their domestic population. Germany, Italy, Switzerland, Singapore and Slovenia made it onto Coincuba’s list of top 5 countries with friendly crypto tax policies.
german progressProactive approach to crypto tax
Germany tops the list with a tax system that is friendlier to residents. Residents are not required to pay capital gains tax on assets held for more than one year. As a result, more residents tend to save their investments in traditional savings accounts rather than spending them outright.
Gemini’s friendly tax policy has helped the country stay at the forefront of crypto adoption. Gemini According to the survey, 43% of high-income Germans own a cryptocurrency, and about 17% of all Germans own at least one cryptocurrency.
Overall, Germany ranked 7th in all score categories with a score of 3.6. Other countries with tax options that are friendly to the domestic masses include Italy, Switzerland, Singapore and Slovenia.
Belgium offers residents the worst tax system
Belgian residents are subject to 33% tax on all profits realized from crypto investments, while professional traders and investors must pay up to 50% tax.
In the overall ranking, Belgium ranked 61st, ahead of China.
Iceland, Israel, the Philippines and Japan are the other four countries on the report’s top five list with the worst tax regimes for residents.
Bahamas Top Tax Haven for Crypto Investors
Residents of the Bahamas do not have to pay taxes on their cryptocurrency profits. Foreign investors and financial institutions also enjoy tax incentives to build their business in the region.
The United Arab Emirates (UAE) has also emerged as a destination for investors due to its zero tax on capital gains. As the UAE looks forward to becoming an innovation hub for the crypto industry, crypto investors and start-ups are moving to designated free zones that offer tax exemption.
Access to country crypto tax policies
Japan, which has been ranked as an unfriendly tax system, is considering reviewing it. The state currently imposes her 30% tax on all cryptocurrency profits made by businesses and her 55% tax rate on retail investors.
As reported by CryptoSlate, the Japanese government is considering a 2023 tax reform to reduce the tax burden and prevent cryptocurrency startups from leaving the country.
The South Korean government has hinted at plans to impose a 50% gift tax on cryptocurrency airdrops, but capital gains will remain tax-free until 2025.
India’s Ministry of Finance has taken a tough stance on cryptocurrency tax policy. We impose a 30% tax on all income derived from cryptocurrencies, plus a 1% withholding tax (TDS).
Indian investors’ tax burden has negatively impacted around 83% of traders, who have had to reduce their trading frequency. However, India’s Finance Minister Pankaj Chaudhary insisted that the tax system would remain unchanged for the foreseeable future.