Crypto Tax Free Countries in 2023
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Crypto is taxed differently around the world, and there are numerous crypto tax free countries that have more lenient policies for those who choose to relocate, with variables in each country and territory.
American taxpayers should know the United States taxes its citizens wherever they reside, and renouncing citizenship is no small matter.
What if you could buy, mine, and trade crypto completely tax free? For many taxpayers, this is the reality as they reside in one of a number of countries with no crypto tax.
Laws on cryptocurrency taxes are relatively new. The IRS released their first cryptocurrency tax ordinance in 2014, which classified crypto as a taxable property. Many crypto holders naturally look for ways to reduce their taxes on crypto earnings.
Crypto is taxed differently around the world, and there are plenty of crypto tax free countries that have more lenient policies for those who choose to relocate. American citizens must be mindful, however, that the United States taxes its citizens wherever they reside, and renouncing citizenship is no small matter.
Crypto traders naturally wonder which countries are crypto tax free. In this article we’ve compiled a list of some of the best and worst countries for crypto tax regulations. Here are some of the countries that don’t tax crypto (with some variables) throughout the world.
16 best crypto tax free countries
Which countries are crypto tax free? Here’s a helpful list of countries with no crypto tax throughout the world, with some variables and a recent major change for Portugal.
Crypto moves fast, and so does crypto regulation, so be sure to check specific country’s regulations and with a tax professional for the most current information concerning crypto tax free countries.
Belarus is an excellent place to be in crypto at present. Policies about whether crypto will be subject to capital gains and income tax are up for review this year. It’s unclear what policies will go into place this year, but crypto has been exempt from taxes in Belarus since 2018. At time of writing, Belarus considers crypto a personal investment, meaning you can freely mine, buy, or sell cryptocurrencies there.
Bermuda has no capital gains or income tax of any kind. However, the cost of living is notoriously high. If you choose to relocate to Bermuda and you buy land or rent for longer than three years, you might be subjected to a land tax. Interestingly as of 2019, Bermudan taxes you incur there can be paid with USD Coin.
British Virgin Islands
The British Virgin Islands have a neutral tax policy for capital gains, corporate, income, and withholding taxes. At time of writing this includes crypto, which means there are no specific taxes on cryptocurrency in the British Virgin Islands.
The Cayman Islands have been known as a tax haven for U.S. investors and businesses for quite some time. At time of writing the Cayman Islands have no income or capital gains tax whatsoever, making it ideal for crypto investors.
However, the cost of relocating and living in the Cayman Islands can be quite high. A 22-26% import tax is applied to most goods imported into the country.
You might know El Salvador was the first country to adopt Bitcoin as legal tender. To drive this investment in cryptocurrency home, El Salvador imposes no capital gains tax to Bitcoin earnings.
Beyond this, if a great deal of your income comes from Bitcoin or you have a substantial amount of Bitcoin as a holding, El Salvador can be a great place to use it, since all businesses are required to accept it as payment.
Georgia has very favorable crypto tax regulations both for individuals and corporations. In Georgia, individuals are exempt from any income tax on profits from crypto sales. Beyond this, because Georgia doesn’t consider crypto to be “Georgian sourced,” crypto is not subject to Georgian capital gains tax.
On the corporate side, for crypto that a legal entity such as an LLC holds, profits are subject to a 15% corporate tax.
Germany crypto tax regulations are remarkably friendly to long-term holders. While not completely tax free, any crypto held for more than 12 months won’t be subjected to income tax or capital gains tax at the time of sale. Short term investments of €600 or less are also not subjected to these taxes.
Normal income tax still applies to sales that happen before 12 months of holding and earnings of over €600. So Germany is a great choice for long-term crypto investors who trade strategically and hold for over a year.
For taxpayers in Hong Kong, so long as an individual’s crypto activities are considered investments, there is no capital gains tax applied. For corporations and crypto professionals, when digital assets are traded as a regular part of doing business, they are subject to an income tax.
Malaysia currently has no capital gains tax on crypto for individual investors. If you’re considered a professional, meaning you trade short term and frequently, you may be subject to income tax on your crypto transactions.
Nicknamed “blockchain island,” Malta is one of the friendliest countries in the world to crypto investors. Malta has no long term capital gains tax on cryptocurrency earnings, although it may subject crypto trades to an income tax.
The Maltese government looks at a number of factors when calculating income tax. This includes crypto earnings as well as your residency status. Income tax can be as low as 0-5% and maxes out at 35%.
Portugal crypto tax rules have recently changed. We’re including Portugal on this list because it was, prior to 2023, a famously tax free zone for crypto. This is no longer the case as of January 1, 2023. In 2022, the Portuguese Parliament approved a specific tax regime that came into effect on January 1, 2023. Under the Portuguese Personal Income Tax Code (the “PIT Code”), income from Crypto now qualifies either as capital, capital gains, or self-employment income.
Puerto Rico crypto tax rules are highly favorable for bona fide residents, boasting no capital gains tax for individual investors and a 4% income tax for qualified businesses. As a territory of the United States, many U.S. citizens prefer relocating here rather than moving to a foreign country. Due to its territory status, Puerto Rican income tax is also lower than American income tax rates.
The catch is that all crypto assets must be earned and disposed of in Puerto Rico in order to avoid capital gains. If you acquired your crypto while residing in the continental United States, you’ll have to pay U.S. capital gains tax.
At time of writing, Singapore has no capital gains tax of any kind, including for crypto. This is good news for those looking to sell crypto penalty free.
Most crypto is also exempt from income tax, unless you are considered a professional trader or receive the crypto as payment for goods and services.
At time of writing, individual residents in Slovenia are not taxed on realized capital gain from the sale or use of virtual currencies unless the activity is considered to be a professional business. There is legislation pending that may change this, so be sure to consult a professional and the Slovenian tax authorities for the latest updates here.
Switzerland is a famous tax haven, and crypto is no exception. Any crypto income or capital gains earned for individual investors are considered completely tax free. For this reason Switzerland has become known as the “crypto valley,” a hub for crypto companies and investors.
If you’re trading or mining crypto on a professional level however, you might be subjected to slight wealth tax anywhere from 0.5% to 0.8%. This tax applies to all assets, not just crypto. With this in mind, Switzerland can be an excellent option for those looking to relocate and get the most out of their investments.
United Arab Emirates
The United Arab Emirates, home to the hypermodern city of Dubai, does not implement income or capital gains tax for individual investors. Do note that cost of living is high however, and goods and services are subjected to a 5% Value Added Tax (VAT).
What are the worst countries for crypto tax?
Now that you know the best countries to buy and sell crypto in 2023, let's go over a few of the worst. Far from tax havens, the following countries scrutinize crypto transactions and subject crypto gains to relatively heavy taxation.
Scandinavian countries are known for their high income tax, and Denmark is a prime example. Danish taxpayers pay an average of 45% of their income in income tax, which includes crypto earnings. In addition, only 30% of your losses can be offset by capital gains.
Netherlands crypto tax is fairly unique. The Netherlands has an atypical policy of taxation on not only crypto but all capital assets. Each year on January 1, the taxable base of a Dutch taxpaying individual's assets is reset and a wealth tax is applied to the deemed yield on the value of assets of the prior tax year. This means crypto holders pay taxes on their holdings whether they’ve realized gains or not.
India crypto tax regulations are relatively unfavorable. All cryptocurrency capital gains and income are subjected to a hefty 30% flat tax in India. When you’ve reached a certain threshold, every time you buy crypto there is a 1% tax deduction at source (TDS) added. The TDS requirement can pose logistical and accounting challenges for Indian crypto exchanges and traders.
In Spain crypto investors can expect to pay up to 47% on their crypto income. Spain also imposes wealth taxes on residents with net worths of over €700,000, including crypto assets. In addition, Spanish taxpayers can only use 25% of capital losses to offset capital gains.
Make filing your crypto taxes easy with TokenTax
Crypto taxes can be overwhelming, even for savvy and experienced investors. There’s a lot to track, and regulations change every year around the world. This is why we created TokenTax: to help make tax season easy for crypto investors. We are both an online crypto tax platform and a full-service crypto accounting firm.
Wherever you pay taxes, TokenTax can help ensure your tax filing is thorough, accurate, and submitted by your country’s deadline. Check out our plans and start making the most of your crypto investments with TokenTax.
Frequently asked questions
Here are answers to some frequently asked questions around crypto tax free countries and countries that don’t tax crypto.
Can crypto be tax-free?
If you are residing and making money off of crypto in the United States, there is no legal way to avoid paying taxes on crypto. Other countries however have different laws, and there are a number of countries that offer zero capital gains or Income tax.
How can I avoid crypto tax?
Crypto holders naturally wonder “how can I avoid paying taxes in crypto?” If you’re a U.S. Citizen, you can’t avoid paying taxes on crypto short of renouncing citizenship and relocating. For American citizens, Puerto Rico crypto tax rules are very favorable for bona fide residents. The only other country that taxes citizens globally is Eritrea, so for nationals who aren’t Eritrean or American, a clear way to avoid crypto tax is to move to a crypto tax free country.
Which countries have no tax for crypto?
Which countries and territories are crypto tax free? Countries and territories with no capital gains or income tax on crypto for individuals (with some variables) include:
British Virgin Islands
The United Arab Emirates
For further details, see the list in this article above.
Is crypto tax free in Dubai?
Dubai, as a part of the United Arab Emirates, has no tax of any kind on crypto for individual investors.
Is crypto tax free in Switzerland?
Crypto is entirely tax free for individual investors in Switzerland. This changes if you are considered a “professional” but the rates are low.
Is crypto still tax free in Portugal?
The answer now is no, crypto is no longer tax free in Portugal. In 2022, the Portuguese Parliament approved a specific tax regime that came into effect on January 1, 2023.
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