Crypto is super hot again! Big profits are being made right now, and then taxes come around the corner. And the government wants a piece of the action… Read more about tax and crypto profit in this blog!
Most countries love to tax on crypto profit
Most European countries will tax crypto profits between 30% and 50%. This is not your wet dream scenario.
Of course, you can manage your cryptos or trade in them from anywhere in the world. All you need is the Internet. Why stay in the rain and wind? Isn’t it more fun to “trade” with the Mediterranean or the heavy waves of the ocean in the background?
And if you are taxed low on your crypto profits in such a nice place, it is all the fun, right?
A lot of misinformation!
As is often the case, misinformation is spread on the Internet and in various blogs about this subject.
Many countries claim to be crypto-friendly but are not, or certain information is outdated. Only a handful of countries have specific legislation around crypto.
For example, you may find that Slovenia is crypto-friendly. This is not true. The planned legislation was never passed.
Taxation of cryptocurrency
Some crypto-friendly countries for tax on crypto profit
Some countries are crypto-friendly, but you either don’t want to live there or you can’t get in. Here are some examples.
Are Hong Kong and Singapore so-called crypto-friendly? Yes, Hong Kong is China, and both Hong Kong and Singapore are extremely difficult to get residency in unless you are very wealthy, and even then.
Netherlands: In the Netherlands, you can be taxed in Box 3, and it may not be so bad. But if you’re busy full-time with cryptos, there’s a danger that it will be taxed as professional income (Box 1 in the Netherlands)… and that’s where the fence is drawn!
Switzerland. You can’t get in here either, even with an EU passport. The legislation here is complex. But with any luck, you’ll never pay more than 13% or less on your crypto profits.
Other countries, like Georgia, also don’t seem like the best choices right now. Or El Salvador if you want to live there.
The classics might still be the best choice for tax on crypto profit
Dubai. So there are countries where you pay no taxes, like the UAE (Dubai), and also on crypto, of course.
Countries with a territorial tax system, such as numerous tropical islands or Panama, Malta, and Costa Rica, can also be smart choices.
Portugal, topper 1. Portugal was a crypto haven for years, but mostly because of unclear legislation. Now, since 2023, the legislation is clear! If you (this is also true in Germany) do NOTHING with your cryptos for a year and sell them at a profit, no matter how big that profit may be, you are simply NOT taxed on your profit. Moreover, Portugal is a nice country to live in, and there are other tax advantages. Read more about NHR in Portugal in this blog.
Bulgaria, topper 2. In Bulgaria, you are not taxed on the potential value as in the Netherlands, but only if you cash, i.e., convert your cryptos to so-called FIAT money. And then, as always, at the stable flat tax of 10%.
Of course, if you don’t invest in crypto but think of an ICO, fund, or mining, we are again in a different context. Every story is different. Everyone’s situation is different. So, as always! Inform yourself well, and contact us with all your additional questions and comments as always at info@dehoon-dhp.com
