Looking to relocate to a country that allows you to buy, sell, and trade crypto completely tax-free?
While investors in countries like the United States and Australia may pay thousands of dollars in crypto taxes, other countries offer friendlier policies.
In this guide, we’ll go through 12 countries with low taxes for crypto investors. We’ll also answer a few commonly-asked questions from investors who are looking to relocate!
How is cryptocurrency taxed?
In most countries, you’re required to pay capital gains and income tax on crypto-assets.
As a result, successful investors may end up paying thousands or even tens of thousands in
. cryptocurrency taxes
However, the countries listed below allow investors to realize crypto profits at discounted rates (or in some cases, no tax).
The 12 best countries for crypto taxes Malta
Malta is known as one of the friendliest countries in the world toward cryptocurrency and has been dubbed as ‘Blockchain Island’.
In Malta, there is no long-term capital gains tax for cryptocurrency. However, trading cryptocurrency may be considered income taxed at a maximum of 35%.
It’s important to remember that the Maltese government looks at multiple factors to determine how your income from trading crypto is taxed — including how much you make from crypto and your residency. As a result, the taxes on your trading income may be as low as 0-5%.
In addition to its friendly crypto-tax policies, Malta has no wealth, inheritance, or gift taxes!
Switzerland is home to a hub of companies dubbed as the ‘Crypto Valley’. In addition, the country does have friendly policies for cryptocurrency investors!
Switzerland does not have capital gains tax for individual investors. Income from activities such as staking and mining is subject to income tax between 0-13.2%.
In addition, Switzerland does charge wealth tax on your assets (including crypto-assets) that ranges from 0.5-0.8% depending on your canton of residence.
While cryptocurrency isn’t completely tax-free in Germany, the country does have relatively friendly cryptocurrency tax laws.
If you dispose of your cryptocurrency after more than 12 months of holding, you won’t be subject to any tax.
In addition, short-term cryptocurrency gains of less than €600 are
However, if you earn crypto income or earn more than €600 of profit from disposing of crypto after less than 12 months of holding, you’ll pay normal income tax rates — which range from 0-45%.
In Belarus, cryptocurrencies are exempt from capital gains, income tax, and VAT for businesses and individuals until January 1, 2025.
Belarus originally passed a law exempting cryptocurrencies from taxation in 2018. While the law was originally set to expire in 2023, President Alexander Lukashenko extended tax benefits for crypto investors and businesses until 2025.
Previously, cryptocurrency was not subject to capital gains and income tax in Portugal. However, the country introduced taxes for cryptocurrency starting in the 2023 tax year.
Gains from cryptocurrency disposed of after less than a year of holding are taxed at 28%. Ordinary income from cryptocurrency is taxed at 15%, while income from cryptocurrency mining is taxed as high as 95%!
However, Portugal still offers certain tax benefits for cryptocurrency. There is no capital gains tax on cryptocurrency held for 365 days or longer.
At this time, Singapore does not have a capital gains tax. That means individual investors can dispose of their crypto completely tax-free.
In most cases, cryptocurrency is not subject to income tax. However, you may pay income tax on crypto if you earn it as a business or receive it in return for goods and services.
In addition, you may pay goods and services tax (GST) on goods that you buy with your cryptocurrency.
Like its neighbor Singapore, Malaysia does not tax capital gains and income from cryptocurrency for most investors.
However, the Malaysian government has said that you may be subject to income tax if you’re trading crypto on a short-term and frequent basis.
El Salvador is famously known for being the first country to accept Bitcoin as legal tender.
In 2023, El Salvador removed all taxes relating to ‘technological innovation’ — including income, capital gains tax, and property tax. As a result, income and capital gains made from cryptocurrencies are tax-exempt!
As a bonus for Bitcoin investors, businesses all over the country are required to accept Bitcoin as payment for goods and services.
For decades, the Cayman Islands have been considered a tax haven for individuals and businesses.
Currently, the Cayman Islands has no capital gains or income taxes.
However, it’s important to remember that the cost of acquiring residency and living in the Cayman Islands is high. The Cayman Islands does charge import duties between 22-26% on most imported goods.
Like the Cayman Islands, Bermuda has no capital gains or income tax.
However, it’s important to remember that Bermuda does have a high cost of living. In addition, if you own land or rent for more than 3 years, you may be subject to land tax.
United Arab Emirates
At this time, the United Arab Emirates doesn’t charge income or capital gains tax for individual investors.
However, it’s important to note that goods and services are subject to a 5% VAT — including goods and services purchased with cryptocurrencies. In addition, the United Arab Emirates has a high cost of living.
Puerto Rico is not a country — it’s a territory of the United States. As a result, Puerto Rico sets its own tax policy.
Many American citizens find that relocating to Puerto Rico is an easier process than relocating to a foreign nation.
Puerto Rico residents must pay territorial income tax rates, which range between 0-33%.
Currently, there is no capital gains tax for Puerto Rican residents, provided that they acquired and disposed of their property while residing in Puerto Rico.
If you acquired your cryptocurrency before residing in Puerto Rico, it will be subject to typical American capital gains tax rates.
Do American expatriates need to pay American taxes?
The United States is one of the few countries that requires expatriates to pay taxes even when they are residing in another country.
If you’re an American citizen or green card holder earning more than $12,950 in income, you’ll generally be required to file Form 1040 regardless of where you live and where you earn your income.
In addition, you may be subject to
if you spent more than 183 days in the United States during the tax year. capital gains tax How can I avoid crypto taxes in the United States?
Remember, there is no way you can legally evade crypto taxes in countries like the United States. However, there are steps that you can take to legally reduce your crypto tax liability.
For more information, check out our
. 11 tips for legally reducing your crypto taxes What are the most tax-friendly states in the United States?
Often, American citizens find the process of moving overseas to be time-consuming and difficult. It may be more viable for you to move to another state with more tax-friendly policies.
Currently, Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming have no state income taxes (although New Hampshire and Tennessee tax interest and dividends).
For more information, check out our list of the
. most crypto-friendly states The 5 worst countries for crypto taxes
Let’s go through some of the countries with the least friendly crypto tax policies.
In most countries, you can offset your capital gains with
— which can potentially save you thousands of dollars on your tax return. capital losses
In Spain, only 25% of the value of capital losses can be used to offset capital gains.
In addition, taxpayers can face taxes as high as 47% on cryptocurrency income. Many parts of the country also impose a wealth tax on residents with a net worth greater than €700,000 (this includes the value of crypto assets).
In Denmark, only 30% of your losses can be offset by capital gains.
In addition, all profits from cryptocurrency in Denmark are taxed as income. It’s estimated that the average Dane pays income tax at around 45%.
In The Netherlands, you’ll pay tax on your cryptocurrency and other capital assets — regardless of whether you’ve sold or not.
If you have more than €57,000 in assets (total crypto and non-crypto), you’ll face a 32% tax on your ‘presumed gains’. This is true even if the value of your portfolio has gone down during the tax year.
South Africa has not provided clarity on whether crypto transactions should be subject to capital gains tax or income tax. Because the top income tax bracket (45%) and top capital gains tax bracket (18%) are so different, this may cause investors to drastically overpay/underpay their taxes.
In India, all cryptocurrency income and capital gains are subject to a 30% flat tax.
There is no discount for long-term gains and no tax benefit for cryptocurrency capital losses.
Cryptocurrencies are also subject to an additional 1% tax deducted at source (TDS) after the 30% tax is applied.
For more information, check out our
. guide to India crypto taxes How CoinLedger can help
No matter where you live, CoinLedger can help you keep track of your cryptocurrency transactions and generate a complete tax report in minutes. CoinLedger offers support for countries like the United States, Canada, Australia, Japan, and many more!
CoinLedger is trusted by 400,000+ investors worldwide.
. Get started for free Frequently asked questions Can crypto be tax-free?
Certain crypto transactions are tax-free.
and holding cryptocurrency are non-taxable in the United States and other countries. Moving crypto between wallets How can I avoid crypto tax?
While there’s no way to legally evade crypto taxes, strategies like
can help you minimize your tax liability. tax-loss harvesting Is crypto tax-free in Dubai?
The United Arab Emirates does not have income tax and capital gains tax for individual investors.
Do exchanges report to the IRS?
Across the world, tax agencies are requiring exchanges to send tax reporting information. The
2021 infrastructure bill will require all exchanges in the US to send detailing capital gains and losses to the IRS. 1099 reporting info Can the IRS track cryptocurrency? Yes. In the past, the IRS has worked with contractors like Chainalysis to track crypto transactions. Read more in our guide: Can the IRS track cryptocurrency? What are some crypto tax-free countries in Europe?
Malta has no income or capital gains tax on cryptocurrency, while countries like Germany and Portugal have no capital gains tax on crypto held for longer than 365 days.