Governments around the world are introducing laws that impose taxes on the income from BTC transactions, but there are still a few countries that allow investors to buy, sell or store digital assets without paying a penny. Today we present you with a list of eight countries that can be considered as a Bitcoin tax haven.
In Portugal, tax offices have abolished all taxes on trading and cryptocurrencies transactions. This means that individuals do not have to pay capital gains tax or VAT on the purchase or sale of BTC and other digital assets.
Citizens are not obliged to pay income tax when exchanging cryptocurrencies for FIATs. However, the Portuguese tax office requires companies that adopt digital currencies as payment for goods and services to pay both VAT and income tax. The tax relief makes Portuguese law one of the most favourable in the world. Especially considering that income tax is a huge expense for daily traders.
In Germany, you are exempt from any taxes if you have had your Bitcoins for at least one year. No matter how much you earn from selling your BTC. If you have kept them for at least 12 months, you will not pay a penny.
Europe's largest economy considers BTCs to be private money, contrary to popular belief in most countries that see them as a currency, commodity or equity. In Germany, sales that do not exceed 600 euros are tax-free. However, companies are still obliged to pay income tax on profits from cryptcurrencies.
In Singapore, both individuals and companies that own BTC or other digital assets as a long-term investment don't need to pay taxes. This is because there is no tax on capital gains in this city-state.
Companies established in Singapore must pay income tax if they are engaged in crypto trading and this is their principal activity. Those companies that accept Bitcoin as payment for services rendered are subject to normal income tax rules.
As in neighbouring Singapore, no capital gains tax exists in Malaysia. In this country of Southeast Asia, transactions using cryptocurrencies are not taxed. This may change soon. According to the local press in recent months, BTC may soon be considered a legal tender.
In an Eastern European country, Belarus, a new law, which came into force in March 2018, legalised cryptocurrencies. With their legalisation, individuals and companies were exempted from any form of taxation of transactions and trade in digital financial assets. This law will be in force at least until 2023.
Mining or trade in cryptocurrencies is treated as a personal investment and therefore not subject to taxation. Registered companies, operating in the Special Economic Zone of High Technologies Park near Minsk, engaged in mining, trading or offering ICOs, do not have to pay taxes either.
In the case of Slovenia, the tax system for individuals and companies related to BTC is completely different. Although citizens do not obtain capital gains from the sale of BTC, they still have to pay income tax irrespective of the currency exchanged. Companies that receive payments in Bitcoin or intend to extract themselves are obliged to pay tax at fixed rates.
The taxation of companies "depends on the circumstances of the case and the information given in the tax return. If income is considered as capital gains, the tax is 19%". - say the experts.
Malta is also known in the crypto community as the "blockchain island". On Malta, long-term investment in digital assets is tax-free. Short-term crypto trading is treated similarly to trading on the stock exchange. A user making a profit from trading in them must pay 35% tax.
Malta is probably one of the most friendly countries in the world when it comes to cryptocurrencies. The government has introduced legislation that has legalised various cryptocurrencies operations and Bitcoin is recognised 'as a unit of account, medium of exchange or store of value'.
In Switzerland, one of Europe's crypto paradises, individuals who buy, sell or store cryptocurrencies for personal benefit do not have to pay tax on their capital gains. Mining income is considered to be self-employment income and is subject to income tax.