The windfall on crypto bags over the past bull run might have you thinking about cashing out your riches. Taxmen in many countries want a share of this pie, and they aren’t modest about it. Gains on cryptocurrency assets are taxed at 30% or more, going upto 50% in some cases like Australia, while there are countries with no tax on crypto! Binamite untangled the legal web to bring you the best bang for your crypto buck with the 7 most crypto tax friendly countries.
Top crypto tax-friendly countries:
Welcome to the crypto taxpayer’s utopia where you no longer have to ransack your trading and transaction histories across exchanges and blockchains to pay taxes. Leave alone paying taxes, you don’t even have to report your earnings or trades because Dubai attracts – 0% capital gains tax and 0% personal income tax!
The tax-free treatment is applicable only to tax residents or citizens of Dubai. If you reside outside Dubai for tax purposes and merely trade on Dubai exchanges, you are still liable to taxes in your home country. Dubai has mutual tax treaties with many countries to ensure this compliance.
Related: 8 Best Crypto-Friendly Banks in US 
If you are in Portugal or wish to move, you should know that in 2019, the Portuguese Tax & Customs Authority (PTA) declared that buying or selling cryptocurrency is tax-free in Portugal, specifically speaking crypto transactions do not attract either capital gains or VAT. This view is based on Portugal viewing crypto as currency. This approach is compatible with the country’s public policy because Portugal forbids taxing the gain on any currency’s value or sale.
This policy favours retail traders who are not required to pay anything on their crypto holdings or proceeds. However, income generated from professional activities around crypto will attract taxes. Below are some elements to determine if your trade activity will be considered as your profession:
- The frequency of your trade (on a daily/weekly/monthly basis)
- The duration of financial products holding
- How many trading platforms you’re using
- Your profit level
- Your main activity to generate income from
One of the largest components of taxation for crypto is capital gains. Singapore doesn’t tax capital gains, so you bear the fruits of your convictions in your crypto bag entirely! However, it is important to know that income is very much subject to taxes. Now what constitutes income from “capital gains” or just income should be keenly examined.
Market agents that buy and sell virtual currencies in the ordinary course of their business will be taxed on the profit derived from trading in the virtual currency. Profits derived by businesses which mine and trade virtual currencies in exchange for money are also subject to tax.
If you have diamond hands, paying crypto taxes in Germany should be seriously considered. This is because, on any holdings of cryptocurrencies longer than 1 year, Berlin imposes no capital gains tax. However, this discount is enjoyed only on capital gains over a period of 1 year. Income earned from mining, trading, staking and selling any of these assets is taxable.
Took a very unique approach to cryptocurrencies back in 2018. Instead of creating crypto tax laws like many other countries, Belarus legalised cryptocurrencies and exempted them from all kinds of taxes. This was done to ensure that innovation if any, happens in their country.
However, this is an ad-hoc arrangement and the law is up for review in 2023. Until then, all crypto activities including mining and day trading – are viewed as personal investments, which makes them exempt from both Income Tax and Capital Gains Tax.
It’s important to note that this might not be the case after the 2023 review.
Also Read: Benefits of Cryptocurrencies for Business Operations
6. Cayman Islands
You must have seen this coming. These tiny islands which are home to just 67,000 people are known internationally as being one of the only true tax havens in the world. Residents pay no business, income, or capital gains taxes, cryptocurrency included.
Cayman Islands attract investors from both, crypto and traditional finance world due to its favourable tax policies. The Cayman Islands Monetary Authority imposes no corporate tax on businesses, no income tax, or capital gains tax on residents. Instead, the Caribbean paradise earns revenue through tourism, work permits and GST.
7. Puerto Rico
While Puerto Rico is an unincorporated territory of the United States, it’s considered a foreign country as far as Federal Income Taxes go. So the country sets its own tax laws which are especially loved by the Silicon Valley earners! Any digital assets acquired while you were a resident of Puerto Rico are completely exempt from Capital Gains Tax.
The point in case is the time and place that you bought your bags. If you’re a US resident who acquired crypto prior to moving to Puerto Rico, you’d still need to follow the IRS crypto tax laws for that trade. However, if you acquire crypto after establishing residency in Puerto Rico – your crypto is totally exempt from Capital Gains Tax.
Is there an escape?
If you are caught in the quagmire of fiat, crypto transactions and your tax compliance, Binamite has a solution! With Binamite you can accept crypto payments in fiat, and vice-versa. You can keep your books absolutely clean of crypto, and yet, pay employees with crypto. This is why:
Binamite is a cryptocurrency payroll management system. If crypto-friendly countries for freelancers allow payments in crypto, you can hire abroad with your local fiat. Or you can pay in countries where small businesses accept crypto. Now leave all your payroll, compliance and means of payments issues to us, while you focus on what you do best. We not only ensure that you save money and effort while employing, but that your employees are happy with timely paid salaries in a ratio of assets they choose.
How Can Binamite Help?
Binamite is a borderless payments platform that gives businesses the flexibility to pay their employees, contractors, and freelance workers using their preferred method, while ensuring recipients can split their pay between fiat and crypto in any ratio. If you’re looking for the most flexible, comprehensive, and convenient solution to paying and getting paid in digital assets, head over to Binamite and Sign Up for free!