For investors and businesses, these countries have favorable rules for the cryptocurrency.
Cryptocurrency is becoming popular all around the world at a rapid rate. As a long-term investment option, mode of payment, and trading, cryptocurrencies are witnessing an influx of audience. Many companies have also started to recognize crypto coins such as Bitcoins as a substitute for money.
However, the way cryptocurrencies are taxed around the world differs. Each country has its own crypto regulations that are either already established or are undergoing the process. This is where the confusion starts for entrepreneurs. What happens to their capital gains when they sell their crypto? China has indefinitely banned cryptocurrency in its region, but there are some countries that serve as tax-havens or are crypto-friendly. Naturally, these countries have more cryptocurrency investors, too.
The German government considers cryptocurrency to be ‘private money’. They are not subjected to VAT during transactions and are exempted from the long-term capital gains tax. So if an individual is selling their share of Bitcoins within one year, capital gains tax will only be applied if the value is more than 600 euros. But this rule only applies to resident investors. Businesses are still subjected to corporate income tax when dealing with cryptocurrency.
Zug is a city in Switzerland that is also known as the “Crypto Valley”. The city is a bustling center of innovative blockchain firms, businesses, shops, entrepreneurs, etc. Not just that, this crypto valley is also a tax-free zone for crypto investors. Back in 2016, Zug became the first country in the world to accept Bitcoin payments.
Cyprus doesn’t have set regulations for cryptocurrency yet, but this Middle-Eastern Island country encourages many cryptocurrency and blockchain startups. Right from casinos to ICOs, Bitcoins and other cryptocurrencies have made their place. Not just corporations, people in Cyprus also use Bitcoins in their day-to-day life.
Malta is also known as “Blockchain Island”. The Maltese government fully supports cryptocurrencies, despite the local banks not being onboard with the idea. Nevertheless, Malta has a set framework for companies and startups that work with blockchain. The country’s Prime Minister called cryptocurrency “the inevitable future of money”, and this immense support is the reason Binance has established its headquarters in Malta.
Singapore is also an investment haven. There is no capital gains tax in the country, so cryptocurrency is considered as an intangible property with no tax. This rule applies to individuals only and businesses that are involved in cryptocurrency trading will subject their profits to normal income tax rules. Singapore is already a favorable country for independent businesses and with these supportive cryptocurrency laws, it is only inviting more organizations and individual crypto investors.
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