Between nations, and some governments have enacted extremely stringent crypto tax policies for their citizens.
According to a new study conducted by crypto analytics firm Coincub, Belgium is the worst country in the world in terms of cryptocurrency taxation for citizens. This is based on internal rankings encompassing taxation issues such as taxes on cryptocurrency income and capital gains.
Belgium is well-known for its 33% capital gains tax on cryptocurrency transactions, as well as withholding up to 50% of professional income from crypto trades. As previously reported, Belgium enacted strict crypto taxation legislation in 2017.
According to Coincub's tax rankings, nations like Iceland, Israel, the Philippines, and Japan are less appealing to cryptocurrency investors.
According to the study, cryptocurrency earnings of up to $7,000 in Iceland are taxed at 40%, while higher gains are taxed at 46%. Under Israel's tax structure, the sale of cryptocurrency is normally subject to a capital gains tax of up to 33%. However, if crypto trading is subject to a business income tax, it could be as high as 50%.
In the Philippines, any crypto income under $4,500 is tax-free, while any income above that is taxed at a rate of up to 35%. The country's government has also been mulling additional crypto taxes by 2024, increasing fears that Manila may follow India's lead and levy a 30% flat tax on all crypto profits.
In Coincub's rankings, Japan closes the top five worst countries for crypto taxation for citizens. The government has a progressive tax rate scheme for income classified as miscellaneous income. The tax rate ranges from 5% to 45%, depending on overall profits.
Among other strict crypto tax economies, Coincub highlighted countries like India, Austria, the US, Norway, Denmark, and France.
The study, on the other hand, identified a number of nations that offer tax-efficient incentives to people and have significantly more favorable crypto tax regulations.
According to the rankings, Germany is the healthiest country for crypto investors since anyone who holds cryptocurrency for at least a year incurs no capital gains tax when selling or converting their crypto. Other crypto-friendly nations include Italy, Switzerland, Singapore, and Slovenia.
Furthermore, Coincub mentioned traditional tax havens or nations that offer international firms and individuals minimal to no tax liability for their financial deposits, and crypto is no exception. Among those, the study listed The Bahamas, Bermuda, Belarus, the UAE, the CAR, Lichtenstein, and others.
Coincub underlined that crypto taxation is dynamic, with new legislation emerging on a regular basis. The firm also stated that a growing number of governments implement flat tax rates on individual gains in order to simplify taxation.