Today, through this article, we will know about the crypto tax rate of the USA, UK, Italy, Germany, Portugal, Singapore, and India countries. And together we will compare different countries.
You must be aware that Crypto has become popular all over the world for the last few years. Many countries have started applying tax brackets to digital assets in order to regulate them and treat them at par with existing financial assets.
Table of Contents:-
Comparison of crypto tax rates by countries USA, UK, Italy, Germany, Portugal, Singapore, India
Here we give you some examples of how some countries approach crypto taxes. Which is the main point to keep in mind while reporting cryptocurrency taxes:-
- Capital Gains and Losses: Whenever you sell, trade or exchange your cryptocurrency, you incur capital gains or losses. All of these gains or losses must be reported on your tax return.
- Cost Basis: Your cost basis is the original value of the cryptocurrency. when you achieved it. This is used to calculate your capital gains or losses.
The crypto tax rate in the USA
- Cryptocurrencies in the US are considered property for tax purposes. Any transaction involving cryptocurrencies must be reported in the tax return.
- Selling crypto for fiat, token airdrops, mining or staking crypto, and buying one token with another are all taxable in the United States. Rates for capital gains and income tax can vary between 0-37%.
- Calculating cryptocurrency tax is up to users, who can choose to calculate crypto by FIFO or LIFO tax. The FIFO (First In, First Out) method means that the total profit is calculated based on the tokens purchased first. The LIFO (Last In, First Out) method means that net profit is determined based on the last token purchased at the time of sale.
The crypto tax rate in the united kingdom
- In the UK, income earned in crypto or capital gains is taxed. Applicable tax rates range between 10-20%.
- Selling crypto to withdraw fiat, trading one token for another, using crypto to pay for real-world assets, and compensation earned in crypto are all taxable.
- There are 3 ways to calculate taxes on crypto:- 1. Calculating profit/loss on crypto traded on the same day 2. Calculating profit/loss on crypto traded within a month
The crypto tax rate in Italy
- In Italy, cryptocurrency is considered a financial instrument and is subject to capital gains tax. If the value of the portfolio exceeds 2000 Euro, a 26% capital gains tax applies.
- Selling crypto to withdraw fiat, trading one token for another, etc. Using crypto to pay for real-world assets, and compensation earned in crypto are all taxable.
- The LIFO method is applied to calculate capital gains tax.
- Individuals are required to report the value of their cryptocurrency holdings at the end of the tax year, including gains or losses from the previous year.
- If users do not wish to calculate capital gains or fail to do so, they may pay a flat tax of 14% on their portfolio value.
The crypto tax rate in Germany
- In Germany, cryptocurrency is personal property and subject to income tax. Capital gains tax usually applies to businesses, not individuals. An individual’s profit is tax-free as long as it is less than 600€.
- Mining and staking income may be taxed as business income. Token airdrops, NFTs, using crypto to buy fiat, other tokens, or real-world assets, compensation earned in crypto, and DeFi lending are all taxable.
- Users in Germany are required to report all transactions regardless of their value. German tax law states that personal assets are subject to income tax. Tax rates are 0-45%.
- Germany prefers to calculate crypto taxes with the FIFO method.
The crypto tax rate in Portugal
- In Portugal, cryptocurrency qualifies as capital income or self-employment income.
- Passive income from crypto is taxed at 28%. Crypto mining, verification, and token issuance are to be taxed between 14.5-53%
- Portugal crypto users calculate taxes using the FIFO method.
- Individuals and businesses that buy, sell, or hold cryptocurrencies in Portugal must report their transactions, including any gains or losses from cryptocurrency transactions.
- In addition to capital gains tax, individuals and businesses may also be subject to VAT (value-added tax) on their cryptocurrency transactions.
The crypto tax rate in Singapore
- In Singapore, cryptocurrency is treated as a commodity and is subject to Goods and Services Tax (GST) when used to purchase goods and services. Capital gains from cryptocurrency are currently not taxed.
- In Singapore, cryptocurrency transactions are subject to the same tax as other forms of income.
- Trading crypto, mining crypto, and purchasing goods and services with crypto are taxable. Income tax is charged on the fair market value while capital gains are taxed by deducting the cost basis of the token from the sale price.
The crypto tax rate in India
- Clear regulations and an efficient taxation system for the cryptocurrency sector in India can help establish a stable and safe investment environment.
- This will attract more investors and businesses to the region, leading to the growth of industry and the creation of new job opportunities.
- Additionally, proper tax collection from the crypto sector can also help the government generate revenue and support the country’s economy.
Note:- These are general guidelines and tax laws may change over time in respective countries. So be sure to consult a tax professional for more specific tax advice.