A recent research report by Coincub and Blockpit highlights how varying tax policies, from zero taxes in the UAE to high rates in the U.S., shape crypto investment strategies.
The crypto taxation landscape varies widely across the globe, as revealed by a research report from Blockpit and Coincub.
Data reveals that the UAE remains an attractive destination for crypto investors, with no personal income or capital gains tax on cryptocurrency gains for individuals. Similarly, Switzerland positions itself as a tax haven, offering zero personal income and capital gains tax on crypto gains.
In Europe, the situation is more mixed. While some nations provide favorable tax conditions for long-term holdings, others maintain elevated tax rates. For example, Denmark has one of the highest personal crypto tax rates globally, with up to 53% of long-term and short-term capital gains from crypto being taxed by the local watchdog.
The report notes that, on average, many European countries impose relatively high taxes on crypto gains, but the old continent “has the most tax breaks for long-term hodling your Bitcoin.”
Meanwhile, the United States has the highest total gains and average tax rates of 17.5% (long-term) and
23.5% (short-term), what could potentially bring in tax revenues approximately $1.87 billion, the analysts estimate. They warn that high taxation could “discourage investment,” pushing crypto activities underground, or force investors to relocate to more tax-friendly jurisdictions.
“Nations like Vietnam, Turkey, and Argentina might prioritize attracting crypto investment, fostering technological innovation, and providing alternatives to unstable local currencies over immediate tax collection.”
Blockpit
Analysts indicate that the global approach to crypto taxation is set to undergo significant changes starting in 2025, driven by international initiatives such as the Crypto-Asset Reporting Framework and the Tax Administration for the Reporting of Crypto-Asset Activities.
Developed by the Organization for Economic Co-operation and Development, CARF aims to enhance tax transparency and combat tax evasion by creating a global framework for reporting crypto transactions. In parallel, TARKA is designed to facilitate cooperation among tax authorities in the 48 participating countries, per the report.
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