Countries with no (or almost no) taxation for cryptocurrencies

Andorra

Main article: Taxation of cryptocurrencies in Andorra

There's no total tax exemption in this country when selling cryptocurrencies, but the applicable rate is only 10%, considerably lower than in other EU countries.

In addition, Andorra has a Cryptocurrency Law under development, which plans to offer significant tax exemptions for those people who sell cryptocurrencies but reinvest the proceeds in other assets within the country.

The country is also positioned as one of the most interesting for mining cryptocurrencies since it has one of the lowest electricity rates on the continent and high-speed connectivity covering the entire country.

Singapore

Main article: Taxes in Singapore

The Asian country has become one of the havens for cryptocurrency holders because both individuals and companies keeping cryptocurrencies don't pay taxes if they hold them for long-term investment purposes. This is because there's no capital gains tax in this country.

In the case of companies based in Singapore whose main activity is the frequent buying and selling of cryptocurrencies, they must pay taxes on profits. And those that accept these currencies as a means of payment are taxed in accordance with the usual rules for income tax.

Portugal

Main article: Cryptocurrencies in Portugal

Portugal's tax treatment changed with the 2023 State Budget. As a rule, capital gains from disposing of cryptoassets held for less than 365 days are taxable (generally at 28%, with an option for aggregation). Gains from certain cryptoassets held for 365 days or more are excluded from taxation.

Those companies that accept payments or offer services with cryptocurrencies must pay both VAT and income tax.

Malta

Main article: Taxes in Malta

Malta has been given the nickname of the blockchain island, and it's not by accident. Within its territory, capital gains tax is not levied on long-term cryptocurrency transactions. Nor is VAT paid on these transactions.

However, if transactions are carried out within the same day, the gains will have to be taxed under income tax.

Hong Kong

As in Singapore, individuals and companies holding cryptocurrencies by way of investment don't have to pay capital gains tax. In the case of companies where trading in digital assets is part of their business, they do have to pay income tax.

Gibraltar

Gibraltar is known for its tax laxity, which also applies with respect to cryptocurrencies. Investments in such currencies are not subject to capital gains tax or VAT (because these taxes don't exist in this territory). But there's a corporate tax rate that is set at 10% on profits and applies with respect to cryptocurrency trading.

Are cryptocurrencies really money, and can they be considered assets similar to shares? Internationally there is no consensus on questions of this kind. As a result, each country is regulating digital currencies in its own way, and that results in very different tax regimes from one another.

How to take the first step?

As we've seen, while in some countries sales of crypto-assets are heavily taxed, in other states this is not the case. As a consequence, more individuals and companies are relocating to radically optimize their tax contributions.

If you wish to change your tax residency, our international network of local partners can help you, so don't hesitate to contact us through this form or at secretary@theglobalwealth.com.

And if you're still not sure about your ideal destination, we recommend you to download our free report "The top three tax destinations right now", available below.

Sources:

• Portuguese Tax and Customs Authority (Portal das Finanças) — "Criptoativos: Conceito fiscal e tributação" — supports the 365-day exemption rule and that taxable crypto capital gains are generally taxed at an autonomous 28% rate (with option for aggregation), under the 2023 framework.
• KPMG Portugal — "Crypto-assets (Tax regime)" — supports the introduction of a dedicated crypto tax framework and the 28% / 365-day treatment described.