As per a study by Divly, a Swedish tax firm, last year, only 0.53% of the global cryptocurrency investors paid taxes on their trades. The percentage of people abiding by the rules varied in different countries, with only 0.03% of investors in the Philippines paying taxes and over 4% of Finnish investors abiding by regulations.
The Trends Across the Globe
Divly investigated 24 nations to determine the percentage of people in each area who paid appropriate taxes for cryptocurrency trades in 2022. Finnish investors were the strictest with 4.09% of them adhering to taxation policies. Italy had the lowest payment rate in Europe with only 0.26% of investors paying taxes, but the 2023 budget has planned changes that might reduce the threshold for declaring crypto holdings. The Philippines had the lowest payment rate globally with only 0.03%, and they tax locals with 35% only if their income from digital asset trading exceeds $4,500.
The USA and Canada had 1.62% and 1.65%, respectively, while Japan had the highest payment rate among Asian countries with 2.18%, and Singapore had 0.65%. The analysis revealed that almost 95.5% of cryptocurrency traders worldwide had not paid their 2022 taxes yet. However, Divly expects the numbers to improve as amended regulations are enforced.
Some of the Crypto Tax Heavens
According to another Coincub study, Germany has the best crypto tax laws in Europe. The Ministry of Finance announced that they won’t tax private individuals selling bitcoin or ether if they have held the assets for over a year. Italy and Switzerland ranked second and third, respectively, and most Swiss provinces exempt residents from crypto taxes. Singapore and Slovenia were on the top 5, exempting residents from crypto taxes, but Slovenes may have to pay a 10% rate in the future.