Countries where cryptocurrency is taxed
One of the hottest financial terms that is making headlines and almost everyone’s minds right now is cryptocurrency. No matter what country you live in, you must have come across this term at least once, right?
And almost every other day there is news about the governments of various countries taking action for or against crypto, with India being the most recent through its crypto tax announcement.
Corn India is neither the first nor the only country to tax cryptocurrency transactions.
Also Read: Meet the Dutch “Bitcoin Family” Who Emigrated to Portugal “Bitcoin Heaven” for Tax-Free Crypto
Curious to dive deep and learn about other countries taxing cryptocurrencies?
Read on as we bring you the list of nations taxing crypto.
1. United Kingdom
In the UK, cryptocurrency is treated as a fixed asset. Thus, capital gains tax rates are levied on the disposal of cryptocurrency, which involves selling tokens for cash, exchanging tokens for another type of token, using tokens to pay for goods or services, to give tokens to another person (unless it is a gift to a spouse or civil partner). All such disposals of crypto are subject to UK crypto tax.
The UK crypto capital gains tax rate is 20% for top and additional rate taxpayers, and 10% for base rate taxpayers. Depending on your overall taxable income, the size of the gain and your deducted allowances, you will pay the tax. The non-taxable allowance for capital gains tax is £12,300.
Read also : China will create its own “NFT industry”, but not related to cryptocurrency
2. The United States
The US Internal Revenue Service (IRS) Says Buying and Selling Crypto Identified as Property, Not Currency, for Tax Purposes.
Therefore, your virtual currency is taxed the same as any other assets you own, such as stocks, gold, etc. by an employer and receiving crypto rewards are taxable crypto transactions.
However, buying and holding crypto with cash, transferring crypto between wallets, and donating crypto to a qualified tax-exempt charity will not be taxable. The IRS would impose a 10-20% tax on crypto transactions in the United States.
Read also : The world’s first NFT restaurant will open in New York in 2023
Italian tax authorities have reportedly come to the conclusion that cryptocurrencies should be treated as foreign currencies. As a result, proceeds/income from “speculative” exchanges between cryptocurrencies or from cryptocurrencies to fiat currencies will be subject to a flat-rate substitute tax of 26%.
Also Read: Missed Shiba Inu or Dogecoin in 2021? These coins could be the next big crypto in 2022
Canada treats cryptocurrency as a digital asset, the purchase or holding of which does not attract tax, but the sale of which does.
When you realize a capital gain from the disposal of cryptocurrency, i.e. by selling or donating cryptocurrency, trading or exchanging cryptocurrency, including selling one cryptocurrency to obtain another cryptocurrency, converting the cryptocurrency into government-issued currency, such as Canadian dollars, and using the cryptocurrency to purchase goods or services , you generally have to include it in income for the year. But only 50% of the capital gain is taxable, not all of the capital gains.
Read also :10 Big Brands That Dipped Their Toes Into The NFT World
The German tax system for crypto is a bit weird. Germany views cryptocurrencies as private money, not capital. If you hold your crypto for more than a year and later sell, trade, or spend your crypto, you won’t pay any tax on it.
But holding your crypto for less than a year is taxed unless the profit is less than €600.
Additionally, if you staked your crypto to earn additional income, then that crypto would be subject to taxes regardless of how long you hold it. Only after a long period of 10 years of holding your crypto would the staked crypto be exempt from point-of-sale tax.
And transactions like getting paid in crypto, mining crypto, staking crypto, selling staked crypto within 10 years, selling, trading, or spending crypto you’ve held for less than a year whose gain is above €600, all of this will attract crypto tax.
Also Read: Countries Where Cryptocurrency Is Currently Banned
On February 1, 2022, during the Budget speech, Indian Finance Minister Nirmala Sitharaman has announced a major setback for the crypto industry. The 2022 budget announcement stated that any income from the transfer of digital (crypto) assets will be charged 30% tax, plus TDS on the payment made in connection with the transfer of virtual digital assets at the rate of 1 % of this counterparty above a monetary threshold.
And that’s not all. Even the loss resulting from such a transfer of assets cannot be offset by any other income, and the gift of such assets will be taxed in the hands of the recipient. In addition, no deduction in respect of an expense or an allowance is authorized when calculating this income, with the exception of the cost of acquisition.
The budget, however, failed to mention the highly anticipated new Cryptocurrency and Official Digital Currency Regulation Bill, 2021, which the entire crypto industry is eagerly waiting to clarify. the otherwise cloudy future of crypto in India. The RBI Central Bank has, on several occasions, openly expressed its position against crypto in India, which makes the future even more uncertain.
The Union budget introduces a 30% tax on crypto income.
Crypto investors pic.twitter.com/S1DPNVOjkM
— SwatKat💃 (@swatic12) February 1, 2022
Besides these nations, countries like the Netherlands and Australia would also levy crypto taxes.
But the position towards crypto, whether to ban it or regulate it and how to do it, still remains a concern for many countries around the world, including India.
And with the crypto craze rising higher and higher with each passing day, central banks of all nations are certainly in a tough spot, when it comes to what action to take around cryptocurrency. Maybe, only time will!
Read also : Crypto will crash one day, says Rakesh Jhunjhunwala
For more interesting content and the latest financial news, keep reading Worth. Click here