The global cryptocurrency taxation rules vary greatly between countries. Some jurisdictions have created extremely strict crypto tax policies for their citizens.
According to a Coincub study, Belgium was ranked the worst country for crypto taxation. This is based on in-house rankings that cover taxation aspects such as taxes on crypto capital gains or crypto income.
Belgium is well-known for its 33% capital gains tax and withholding up to 50% of professional income from crypto trades. As reported previously, Belgium adopted strict crypto-taxation rules in 2017.
Published Thursday, Coincub’s tax rankings also show countries such as Japan, Israel, and the Philippines as less favorable for crypto investors.
The report states that crypto gains above $7,000 in Iceland are exempted from tax at 40%, while larger gains are subject to 46%. The sale of crypto is subject to capital gains tax in Israel, which can reach up to 33%. However, crypto trading may be subject to a 50% tax if it involves business income.
The Philippines does not tax crypto income below $4,500. However, after that point, incomes are subject to a 35% tax. The government of the Philippines has been discussing new crypto taxes by 2024. This raises concerns that Manila might follow India’s lead to impose a flat 30% tax on all crypto income .
According to Coincub’s rankings, Japan is now the fifth-worst country for crypto taxation. For income that is not considered income, the country uses a progressive tax system . The amount of total profits determines the tax rate. It can vary from 5% to 45 percent.
Coincub mentioned other countries with strict crypto tax systems, including India, Austria and the United States.
The study also highlighted a number countries that offer tax-efficient incentives to citizens, and have more favorable crypto tax policies. The top spot for crypto investors is Germany, which has no capital gains tax for anyone who holds cryptocurrency for less than a year. Italy, Switzerland and Slovenia are also crypto-friendly.
Related: Australian Treasury consults the public about Bitcoin foreign currency tax exclusion
Coincub also mentioned tax havens, countries that offer individuals and foreign businesses minimal to no tax liability for financial deposits. Crypto is not an exception. The study included the following: The Bahamas, Bermuda and Belarus, as well as the United Arab Emirates, Central African Republic, Lichtenstein, and others.
Coincub stressed that crypto taxation is constantly changing as new regulations are introduced. Additionally, Coincub noted that more countries are imposing flat tax rates for gains to individuals in an effort to simplify tax taking.