Are you considering packing your belongings and moving to a cryptocurrency tax haven to avoid paying cryptocurrency taxes? While most nations tax crypto with capital gains tax or income tax, there are a few crypto tax havens and countries where you’ll pay less crypto tax. In this article, we’ve listed the top crypto tax free countries to relocate to in 2022.
Just a reminder, the rules governing cryptocurrency taxes are constantly changing. Today’s countries with no tax on crypto can become tomorrow’s crypto-shy countries. So before you make a relocation decision in crypto tax haven countries, make sure you speak to your lawyer and a tax advisor for further clarification.
In this article, we will cover below countries:
- Belarus
- Cayman Islands
- El Salvador
- Germany
- Malaysia
- Malta
- Portugal
- Puerto Rico
- Singapore
- Switzerland
Top 10 Crypto Tax Free Countries
Belarus
In March 2018, a new law in Belarus authorized cryptocurrency activity, exempting individuals and enterprises involved from paying taxes until 2023. In 2023, the authorities will review the regulations.
Mining and investing in cryptocurrencies are considered personal investments under the law and are so free from income tax and capital gains. With its stance, Belarus wants to encourage the growth of the digital economy and become one of the crypto tax haven countries.
Tax Residency
You’ll be considered a tax resident if you spend more than 183 days in Belarus in a year or, more importantly, if you do not have tax residence elsewhere. You’ll are be considered tax resident if you have a residence permit in Belarus or if you are a Belarus citizen regardless of where you live.
Cayman Islands
The Cayman Islands is a renowned global financial center with a reputation for being one of the most creative and business-friendly locations in the world. It has a regulatory regime that focuses on the financial services industry, particularly those catering to sophisticated and institutional investors from other jurisdictions. It also stands out as one of the most popular no crypto tax countries.
The Cayman Islands government imposes no income, inheritance, gift, capital gains, corporation, withholding, or other similar taxes, including on the issuance, holding, or transfer of digital assets. Original documents executed in the Cayman Islands (or carried into the Cayman Islands after execution) may be subject to stamp duty.
Tax Residency
In the Cayman Islands, there is no direct taxation.
Living in Cayman Islands as a Digital Nomad
El Salvador
El Salvador became the first Latin American country to make Bitcoin legal tender in September 2021, offering a government-issued digital wallet software and allowing users to spend the tokens in all transactions (alongside payments with the US dollar). In El Salvador, citizens can use Bitcoin to pay debts and previous obligations expressed in US dollars.
In El Salvador, bitcoin exchanges, like any other legal tender, will be exempt from capital gains tax. All this makes the country one of the best crypto tax havens.
Tax Residency
In El Salvador, you’ll be considered a tax resident if you spend more than 200 days in the country during the year, either temporarily or permanently; or your major source of income is in El Salvador.
Germany
In Germany, cryptocurrency is classified as a private asset, which means it is subject to individual income tax rather than capital gains tax. The important thing to remember is that Germany only taxes cryptocurrency if it is sold within the same year that it was purchased. Furthermore, gains from cryptocurrency sales up to €600 per calendar year are tax free.
While short-term trading, mining, and staking, are taxed in Germany, its crypto tax rules are significantly more liberal than in other countries. This is due to the fact that bitcoin and other cryptocurrencies are not considered property under German tax laws.
Tax Residency
The residency in Germany and whether or not you’ve physically resided in Germany for more than six months determines tax residency in Germany. If you’re an EU citizen, you have the freedom to move to Germany and establish residency. Non-Europeans can apply for a residence visa and take up residence.
Malaysia
Crypto transactions are tax-free for individual investors since cryptocurrencies are not considered capital assets or legal money by Malaysian authorities.
However, there is a stipulation. Crypto transactions are only tax-free if they are not frequent or repetitive, according to the Malaysian Inland Revenue Board. To put it another way, if you trade like a day trader, you’ll still have to pay tax on your cryptocurrency.
Similarly, businesses that are involved in crypto, will be liable to pay income tax.
Tax Residency
The number of days you’ve been in Malaysia is used to assess your residency status in Malaysia. If you spend more than 182 days in the country, you’ll be considered a tax resident.
Malta
Malta is a cryptocurrency tax haven. Bitcoin and other cryptocurrencies are recognized as a “unit of account, means of exchange, or store of value” in the country.
This implies you won’t have to pay capital gains tax on long-term gains from selling bitcoin if it’s classified as a “store of value” which is great for hodlers.
Crypto trades, on the other hand, are compared to day trading equities or shares. As a result, they are subject to a 35 percent business income tax. However, there are structuring alternatives inside the Maltese tax system that allow you to decrease this tax rate depending on how much you make and where you live. This makes Malta one of the best tax free crypto countries.
Tax Residency
Regular residency determines tax residency: Non-EU/EEA/Swiss citizens are able to move to Malta, while EU/EEA/Swiss citizens are not. The 183-day rule refers to the maximum amount of time you can spend physically in a country. Following that, your income tax liability is established.
Portugal
Portugal is a cryptocurrency hotspot and one of the best countries with no crypto tax. The country is leading the EU with a good tax outlook and a very energetic government.
If you want to avoid paying crypto taxes, Portugal is one of the greatest places to live in Europe. Since 2018, all proceeds from the sale of cryptocurrency have been tax-free. Even better, cryptocurrency trading isn’t considered as investment income, so it’s tax-free as well.
In Portugal, your crypto is exempt from VAT and income tax if you are not a business. As a result, Portugal is a crypto tax free country for the vast majority of investors.
Tax Residency
If you own a home in Portugal or remain in the country for more than 183 days, you are considered a Portuguese tax resident. EU residents can move to Portugal, however, staying for more than three months requires a registration certificate. All other citizens must first obtain the proper visa, after which they can begin the process of obtaining permanent residency.
How To Move to Portugal With a Golden Visa
Puerto Rico
While Puerto Rico is a US unincorporated territory, it is treated as a foreign country for federal income tax purposes. As a result, the country establishes its own tax rules.
When compared to the US Federal Income Tax, Puerto Ricans pay a much lower Territorial Income Tax. Even better, digital assets purchased while residing in Puerto Rico are excluded from capital gains tax.
This means that the date you purchased your cryptocurrency has a significant impact on whether or not you will pay tax on it. If you’re a US resident who bought crypto before you’ve moved to Puerto Rico, you’ll still have to comply with IRS crypto tax requirements. However, if you purchase cryptocurrency after establishing residency in Puerto Rico, your cryptocurrency is tax free.
Tax Residency
If you spend 183 days in Puerto Rico during a calendar year, you’ll be considered a resident. Also, if earn revenue from services provided in Puerto Rico, you may be liable to taxation even if you have not been physically present for at least 183 days.
Singapore
Thanks to Singapore’s tax regulations, you won’t have to pay Capital Gains Tax if you sell or trade cryptocurrency in the country.
Spending crypto on goods and services is seen as a barter deal rather than a payment. As a result, while the products or services may be subject to goods and services tax, the payment token will not.
But if you’re running a company and its primary function is cryptocurrency trading, the company is still subject to income tax.
Tax Residency
If you stay or work in Singapore for at least 183 days in a calendar year, you’re considered a tax resident. Weekends and public holidays, as well as any brief departure from work for international vacation or official employment, are included in the total number of days counted.
Switzerland
If you’re a qualified day trader, you’ll have to pay income tax on crypto mining in Switzerland. You’ll also have to pay the wealth tax, which is a yearly tax on your overall net worth. The wealth tax rate varies depending on where you live in the country.
But crypto gains are excluded from capital gains tax for ordinary investors who aren’t trading on a professional basis. As a result, many investors can sell and trade cryptocurrency without paying taxes.
Tax Residency
If you decide to make Switzerland your home or you stay in Switzerland for at least 30 days while looking for work or at least 90 days without looking for a job are considered to have Swiss tax residency. EU residents and non-EU citizens have distinct types of residency permits and criteria.
What Else You Need To Know About Countries With No Crypto Tax
There you have it. We’ve given you an introduction to no crypto tax countries. Note that tax is an issue and needs to be handled carefully to avoid any risks, especially if you become a tax resident in a country. Getting help from local advisors will always be helpful.
Have you ever lived in these cryptocurrency tax free countries? Let us know how your experience was…
Frequently Asked Questions on Tax Free Crypto Countries
Is Portugal one of the cryptocurrency tax free countries?
Yes, Portugal is considered a leading crypto hub and it attracts traders with its flexible crypto tax regulations.
Is Germany among the countries without crypto tax?
Germany’s stance against crypto depends on your crypto trade type and how long you hold your digital assets.
