Crypto Tax Bombshell: These Countries Are Taxing Crypto-to-Crypto Transactions!

By Cryptofab | Cointune | 6 Oct 2023


I would like today to write about a topic that's on the minds of many crypto investors: taxes.

As you know, the crypto market is constantly evolving, and so are the tax laws surrounding it. So I would like to give you a rundown of how crypto-to-crypto transactions are taxed in different countries.

Disclaimer: The information below comes from an article from Binance (link below). As there might be mistakes in this article, or as it might evolve, or the rules might be misinterpreted by the regulators of your country, please do your own research.

Countries that tax crypto-to-crypto transactions as ordinary income:

  • United States (for gains realized from the sale of assets held for less than 12 months)
  • Australia (for gains realized from the sale of assets held for less than 12 months)
  • Estonia

Countries that tax crypto-to-crypto transactions as capital gains:

  • United States (for gains realized from the sale of assets held for more than 12 months)
  • United Kingdom (for most cryptoassets)
  • Australia (for gains realized from the sale of assets held for more than 12 months)
  • New Zealand

Countries that exempt crypto-to-crypto transactions from taxation:

  • Germany (for investments held for more than 12 months)
  • Singapore
  • Switzerland
  • Portugal
  • France
  • Slovakia
  • Austria

Countries that defer taxation of crypto-to-crypto transactions until fiat conversion:

  • France
  • Slovakia
  • Austria
  • Portugal

Optimal Approach: Deferring Taxation to Fiat Conversion

Some countries, such as France, Slovakia, Austria, and Portugal, have implemented an exemption for crypto-to-crypto transactions, with gains only becoming taxable when a user sells digital assets for fiat currency (or pays for “real-world” goods or services with crypto). There are several significant benefits to this approach:

  • It can avoid complications in determining the value of a transaction conducted solely between virtual currencies.
  • It can reduce the administrative burden for users and tax authorities.
  • It can be easier to enforce compliance with tax liabilities.
  • It can reduce the risk of unfair outcomes for crypto investors.
  • It can incentivize the development of the crypto industry.

Conclusion

The taxation of crypto-to-crypto transactions varies widely from country to country. It is important to be aware of the tax implications in your jurisdiction before engaging in any such transactions. If you are unsure about your tax obligations, it is advisable to seek professional advice.

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Cryptofab
Cryptofab

Studying Bitcoin, Alts & Arts.


Cointune
Cointune

Crypto, DeFi and passive income.

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