Cryptocurrencies find themselves in a curious limbo when it comes to taxes.
On the one hand, crypto has been around for so long already that most countries have passed at least some sort of crypto regulation. On the other hand, regulatory approaches vary wildly, depending on how strict individual countries want to regulate crypto.
The general crypto tax consensus is that most countries levy a tax on income in crypto and capital gains from crypto. With that in mind, let’s look at the most crypto-friendly countries as of 2022.
- Portugal
It is known that cryptocurrency law in Portugal is very friendly. The authorities have taken a soft stance toward crypto investments. Additionally, individuals who gain profits from the sales and purchases of crypto are not taxed on their capital gains. If you’d like to exchange your cryptocurrency for a different cryptocurrency, like fiat, you won’t be taxed either.
Portugal is also favorable for those worried about the taxes on payments they receive in digital currencies. If you’re an individual, you don’t have to worry about paying heavy capital gains taxes.
- Switzerland
A country is known for its incredible banking standards. Some may also refer to it as the realm of finance since this is where you can have low levels of risk and high levels of privacy. In addition, the country has very lenient regulations for digital currency traders and investors as well.
The tax rules will differ from canton to canton, but they are usually quite friendly. Switzerland is also a great place if you want to start cloud mining, as it has a perfect system for the crypto mining industry. Even though you will probably be taxed on your mining gains, you can profit a lot.
- Germany
A great thing about Germany is that it doesn’t treat digital currencies as legal tender, but rather as private money. Long-term investors may find Germany as paradise thanks to the laws in this country. However, if you want to avoid taxes and you don’t plan to hold on to your investment, then you might want to reconsider.
Regardless of the value, you have in crypto, you won’t be taxed for it if you hold it for more than 18 months. Clearly, the country is trying to fight off those who are trying to use the law for their high-volume trading.
- Singapore
As you probably already know, Singapore is probably the most well-developed and stable economy in the world at the moment. Many entrepreneurs go there to do business, but an increase in crypto miners and traders is also noticeable.
The country is a tech hub of southeast Asia, and cryptocurrency is carefully monitored to prevent illegal activities and laundering. Therefore, it is a perfect land if you want to legally develop your crypto business and if you need balanced regulations. Cryptocurrencies are used as an experimental construct and will continue to grow here.
- Malta
Due to its friendliness towards cryptocurrencies, Malta is a place where many blockchain projects and crypto exchanges happen. This small island has been on the radar of many investors over the past couple of years. After Hong Kong tightened its regulations, Binance was welcomed in Malta.
It was rumored that more than $70 billion in crypto had passed through the borders of Malta over the past years. Some will say that the country lacks some sort of regulatory body, but considering the number of traders and miners there, it is hard to say that there is something bad about it.
