Cryptocurrency is becoming more regulated, which means that holders of digital assets will have to pay taxes.
The government, with the help of taxes, not only collects money into its budget but also controls the development of various industries, encouraging the most promising ones with benefits and strengthening taxation and the control of others.
By creating the most favorable regimes for cryptocurrencies in tax havens, the governments of different countries use digital assets as a means of attracting foreign investors.
By creating tougher regimes and increasing the tax rate in traditional tax economies, the authorities consider cryptocurrency as another way to increase tax revenues.
In his study of tax regimes Coincub, having carefully studied the taxation of digital assets in different countries, identified not only the 5 best tax regimes that are most favorable for the development of cryptocurrency startups but also the 5 worst tax regimes that will slow down the spread of cryptocurrencies in the country.
Belgium # 1
Capital gains from speculative transactions with crypto assets are taxed. When the profit is realized, a tax of 33% will be imposed on it.
Transactions with cryptocurrencies, which are considered professional income, are subject to progressive tax rates of up to 50%.
Iceland # 2
Progressive tax rates in Iceland are applied to income when the taxable amount is reached, which is quite low.
Any profit from cryptocurrencies up to $7K is taxed at just under 40%, while anything that exceeds this figure reaches 46%.
Israel # 3
Israel does not provide any benefits for the taxation of profits received from the use of cryptocurrencies. Cryptocurrencies are taxed according to the same rules as traditional currencies.
The sale of cryptocurrencies is usually subject to capital gains tax of up to 33%. If it is established that crypto investment activity is carried out on a commercial basis, income tax is applied at approximately 50%.
Philippines # 4
Up to $4,500 income tax is not charged, but after that any income, including your crypto income, will be taxed on an increasing scale, which can reach up to 35%.
Most of all, crypto investors in the Philippines are afraid that the authorities will follow the example of India and introduce a transaction tax along with a fixed-rate tax.
Japan # 5
There is no special attitude to cryptocurrencies in Japan. Digital assets in the country are taxed on an equal basis with other assets. And taxes in Japan are very high.
Income up to $ 1,500 per year is not taxed, but after that the tax begins to be levied on a progressive scale from 5% to a maximum of 45%.