Cryptocurrencies are typically taxed as either Income Tax or Capital Gains Tax. However, the specific application varies depending on the country you live in and the types of transactions you perform. Let’s explore how different nations handle cryptocurrency taxation.
United States
Cryptocurrencies are treated as property and subject to either Income Tax or Capital Gains Tax.
- Transactions like selling, swapping, or spending cryptocurrencies are subject to Capital Gains Tax.
- Income from activities such as mining or staking is subject to Income Tax.
- Buying crypto with USD, holding crypto, transferring crypto, and gifting crypto are tax-free.
- Donations of crypto to qualifying charitable organizations may be tax-deductible.
- Tax rates:
- 10%-37% for short-term gains or income.
- 15%-20% for long-term gains or 28% for NFTs considered collectibles.
- You can offset losses against gains, carry losses forward, and deduct up to $3,000 in losses from ordinary income annually.
Australia
Cryptocurrencies are classified as property and subject to either Capital Gains Tax or Income Tax.
- Transactions like selling, swapping, spending, or gifting crypto incur Capital Gains Tax.
- Staking rewards are subject to Income Tax.
- Buying crypto with AUD, holding it, and transferring it are tax-free.
- Donations of crypto to deductible gift recipients may be tax-deductible.
- Tax rates:
- Up to 45% for short-term gains and income.
- Long-term gains receive a 50% Capital Gains Tax discount.
- Losses can offset gains and be carried forward.
United Kingdom
Cryptocurrencies are considered property and subject to either Capital Gains Tax or Income Tax.
- Transactions such as selling, swapping, spending, or gifting crypto incur Capital Gains Tax.
- Gifting crypto to a spouse is tax-free.
- Income from mining, staking, or other activities is taxed under Income Tax.
- Buying, holding, and transferring crypto with GBP are tax-free.
- Tax rates:
- 10%-20% on capital gains, depending on your Income Tax band.
- Up to 40% on income from crypto.
- A £3,000 tax-free allowance for capital gains will apply starting in 2024.
- Losses can be offset against gains and carried forward.
France
Cryptocurrencies are classified as moveable assets and subject to Income Tax.
- Buying crypto with EUR, trading, holding, or transferring it is tax-free.
- Occasional traders pay a flat 30% tax on profits from selling crypto, staking rewards, and other activities.
- Professional traders face a 45% BIC tax.
- Crypto mining is subject to a 45% BNC tax.
- Capital losses can only offset gains within the same fiscal year and cannot be carried forward.
Japan
Cryptocurrencies are considered property and generally taxed as Miscellaneous Income.
- Income from crypto is taxed at rates up to 55%.
- Taxable transactions include selling crypto for JPY, trading, spending, mining rewards, and more.
- If annual crypto profits are below 200,000 JPY and no tax deductions are claimed, reporting is not required.
- Losses are not deductible.
- Buying crypto with JPY, holding it, and transferring it are tax-free.
India
Cryptocurrencies are classified as Virtual Digital Assets (VDAs).
- Profits from selling, swapping, or spending VDAs are taxed at a flat 30% rate.
- Losses are not deductible.
- A 1% TDS (Tax Deducted at Source) applies when buying crypto. Indian exchanges automatically deduct it, but P2P and international transactions require buyers to deduct TDS themselves.
- Income from mining, staking, or airdrops is taxed up to 30%.
- Holding, transferring, and receiving crypto gifts are tax-free.
Brazil
Cryptocurrencies are considered moveable property.
- Profits from selling or exchanging crypto are subject to Capital Gains Tax of up to 22.5%.
- Transactions exceeding R$35,000 in a month are taxed.
- Current rules only apply to assets within Brazil, but international assets may soon be included.
- Mining rewards may incur Income Tax of up to 27.5%.
Related: Hong Kong Exempts Crypto Taxes, Following Donald Trump’s Lead
While most countries impose taxes on cryptocurrencies, a few stand out as “tax havens” for crypto enthusiasts, including El Salvador, Singapore, Malaysia, and Belarus.
