One of the strongest charms of using or investing in cryptocurrencies was its tax-free nature. Satoshi Nakamoto was adamant on the fact that this was the people’s money. In other words, he did not want any authority, government or financial to exercise any form of control over people’s money.
The tax-free nature of Bitcoin and its ability to emerge as a recession and inflation proof asset (comparable to gold) saw its ascendancy and attraction rise. However, governments are not to be left behind when it comes to imposing taxes on almost anything on human beings do.
Most national governments, which allowed trading, buying, selling and investing in Bitcoins, started collecting taxes on capital gains. Let me further explain this in the next section.
Capital Gains Tax and Bitcoin: What do they mean?
Let me begin by telling you about the three categories on countries or nations in terms of their official position on Bitcoins and other cryptocurrencies.
Favourable and Welcoming Disposition-
These countries are the ones, which encourage the trading, investing and circulation of Bitcoins and other cryptocurrencies within their borders. Incidentally, these are also the countries, who do not charge any Capital Gains Tax on Bitcoins
Middle Position and Ignorance-
The countries, which fall under this category are the ones, which are neither too favourable, nor too critical of a crypto like Bitcoin. They have not legalized the usage, but do not go out of their way to adopt banning as well. These countries charge Capital Gains Tax.
Outright Banning and Illegal Status-
The extreme countries, take resort to extreme steps to curb any form of trading, investing, buying or selling in Bitcoins. Needless to say that there is no concept of Capital Tax Gains being collected from countries, which ban Bitcoin altogether.
8 Countries where you do not have to pay Capital Gains Tax on Bitcoins: The List
In this section, we are going to list down the 8 countries, which function according to the true letter and spirit of Satoshi Nakamoto’s White Paper.
You will notice that whenever it has come to Bitcoins or any other crypto, Eastern European countries have always been at the forefront of it all. It is no surprise then that Slovenia and Belarus are on the list when it comes to countries who do not collect Capital Gains Tax.
Malta has always been famous as a country exploring diverse opportunities and providing them to businesses. Whether they be offshore accounts, or online gaming or Bitcoins, Malta wants you to store your assets in the country. However, you need to store it from an investor standpoint.
If you are trading daily (like normal stocks and shares), you will have to pay as high as 35% of your capital gains. Likewise, Germany too allows you to skip paying any Capital Gains, provided your Bitcoin holdings are not moved for a minimum period of one year.
Singapore allows individuals the benefit of attaining free capital gains on Bitcoin. However, if a company (not an individual) is doing it from a business perspective, the company is liable to pay the requisite tax amount.
There are many reasons why countries in the Northern Hemisphere like USA and Canada (both developed economies) and European countries (UK) are not on the list. While both these countries are trying to form regulations to monitor cryptocurrencies like Bitcoin, they feel taxing the same is a part of the regulation process.
Many people invest in the eight countries when it comes to trading and investing in Bitcoins. They sue exchanges and trading platforms, which have powerful trading algorithms to help you make the best trades and earn the highest profits.