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Crypto Tax Rates In Various Countries

Updated on: Apr 25th, 2024

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14 min read

The way cryptocurrency is taxed depends greatly on the digital currency’s legal definition in a particular country and the tax system used in that nation.

For instance, in the U.S., the Internal Revenue Service (IRS) has declared that taxation in cryptocurrency occurs in the same way as any other kind of property. Individuals who do not report their trades, either intentionally or because they did not keep proper records, are at risk of penalties and interest. In extreme scenarios, they can also face criminal charges. 

If you are into crypto investing, you should be aware of taxation in cryptocurrency. This article illustrates cryptocurrency tax rates in different nations and related details. 

How Is Cryptocurrency Taxed In General?

Cryptocurrency is taxed like stocks and other kinds of property. When you earn a gain after disposing of or selling cryptocurrency, you need to pay taxes on the gain amount. The tax rates applicable for cryptocurrency gains are similar to the capital gains taxes levied for stocks.

Examples Of Taxable And Non-taxable Cryptocurrency Events

Given below are some examples of taxable and non-taxable cryptocurrency events:

Non-taxable cryptocurrency events

Taxable cryptocurrency events

Donation of crypto to a tax-exempt organisation

Trading crypto for another crypto

Purchasing crypto with fiat currency

Selling crypto for fiat money (JPY, USD, EUR, etc.)

Transfer of crypto from one wallet/exchange to another wallet/exchange.

Trading, buying or selling an NFT

Purchasing a non-fungible token with fiat currency

Using crypto to purchase services or goods

Cryptocurrency Taxation In Different Countries

Here’s how cryptocurrency is taxed in different nations:

United Kingdom

The capital gains tax rates applicable for selling any cryptos or digital coins in Great Britain are:

Basic Exemption Limit: For FY 2023-24 basic exemption (Tax-free allowance) is £12,000, and capital gain applies  only on gains exceeding limit.

The tax rate for both Long-term and short-term capital gain are the same;

  • Those earning higher than £50,270 – 20%.
  • Those earning less than £50,270 – 10%.

The UK disallows loss set off under wash trading (Tax loss harvesting), i.e. selling assets at a loss and repurchasing them shortly after to reduce tax liability.

The following transactions are considered as regular income to be considered under the regular income tax bracket.

  1. Getting Paid in Crypto
  2. Staking Rewards
  3. Crypto Mining
  4. Airdrops

United States

Basic Exemption Limit: If your total income is less than $44,626 a year (as a single taxpayer), you will have to pay no capital gain tax.

Holding Period and Tax rates: 

Capital gain

Holding Period

Tax Rates

Short Term

Less than 1 year

Federal Slab rates - 10% to 37%

Long Term

More than 1 year

0% / 10% / 20% (Depending on individual or combined income)

The following transactions are considered as regular income to be considered under the regular income tax bracket.

  1. Getting Paid in Crypto
  2. Staking Rewards
  3. Crypto Mining
  4. Airdrops

Australia

Basic Exemption Limit : 

The basic exemption limit is AUD18,200 a year. This exemption is applicable even for capital gains

Holding Period and tax rate on capital gains

Type of capital gain

Holding Period

Tax Rates

Short Term capital gain

Less than 1 year

Slab Rates

Long Term Capital gain

More than 1 year

50% discount on slab rates

The following transactions are considered as regular income to be considered under the regular income tax bracket;

  1. Getting Paid in Crypto
  2. Staking Rewards
  3. Crypto Mining
  4. Airdrops

Netherlands

In the Netherlands, there is no concept of capital gain tax on assets held. Crypto is considered a capital asset, and thus, no capital gain tax is applicable. However they will be taxed at a notional rate on the value of assets being held (Similar to Wealth tax). 

Basic Exemption Limit: For individuals having assets up to €57,000 (€114,000), no wealth tax will be levied.

Tax at 36% will be levied on deemed gains from such assets. Remember that deemed gains depend on the nature of the asset.

  1. Bank balance, savings, cash = 0.01%
  2. Investment / Other assets like crypto = 6.17%
  3. Debts = 2.46%

 Germany

Germany considers cryptos not as a capital asset but as private money. Individuals who hold their cryptocurrency for over one year and later swap it, spend it or sell it need not pay tax.

But holding cryptocurrency for less than a year is subject to taxation unless the profits are lower than €600. 

There are several other areas where individuals will attract cryptocurrency taxes. These include transactions like mining crypto, receiving payments in cryptocurrency, selling staked crypto, and staking crypto within 10 years. It also includes swapping, spending and selling crypto held for less than 1 year and whose gain is over €600.

Canada

Canada considers crypto a digital asset whose sale attracts tax, but the holding or purchase does not. Individuals earning capital gain via the disposal of crypto need to include the same in the year’s income. However, only 50% of the capital gain faces taxation, not the total gains.

India

As per the Union Budget of 2022 announcement, income from digital assets (including crypto) transfers will be taxed at a 30% rate. Also, TDS at a rate of 1% was proposed for cryptocurrency-related transactions for tracking purposes.

There is no concept of short-term and long-term capital gain. Irrespective of the holding period, gains from crypto will be taxed at 30% tax rate.

How To Minimise Cryptocurrency Taxes?

Following are some ways to minimise crypto taxes:

  • One of the most effective ways to save on crypto taxes is to get indirect exposure to cryptocurrency. For instance, multiple platforms allow Indian investors to get exposure to digital currency without holding or buying crypto, which can help crypto investors reduce their tax liability.
  • Hold successful cryptocurrency investments for over one year before using or selling them. Tax rates on such long-term gains are lesser than rates on short-term gains (Depending on the country you stay in , It might or might not applicable).

Part of cryptocurrency investing is recording losses and gains, reporting them correctly, and paying taxes. As a potential crypto investor, you should consider the aforementioned aspects related to cryptocurrency taxation.

Follow the government's taxation rules for cryptos and find strategies to reduce your crypto tax liability for higher returns.

Frequently Asked Questions

Which country has lowest crypto tax?

Countries like El Salvador, Cayman Islands,British Virgin Islands does not levy any tax on crypto.

What is Indian crypto tax rate?

In India, tax on crypto is charged at a special rate of 30% as per section 115BBH.

Is Germany crypto tax-free?

Yes, If you have held crypto for more than 1 year, then it will be tax free.

Is Dubai tax free for crypto?

Dubai does not levy any tax on crypto gains or personal tax. This means you need to pay tax on gains made in crypto transaction.

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Quick Summary

Cryptocurrency taxation varies by country; U.S. taxes it as property. Examples of taxable events include selling for fiat money. Different countries have varying tax rates. To lower crypto taxes, hold investments for over a year. Always follow government tax rules for cryptocurrencies.

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