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6 Most Crypto-Friendly Countries for Trading Cryptocurrency in 2021

Cryptographic money is quickly acquiring fame throughout the planet. Digital forms of money are gaining popularity as a drawn-out venture choice, a strategy for investment, and a method for trading. Numerous organizations have started to acknowledge cryptocurrency, like Bitcoins, as a type of investment.

Digital currencies, then again, are taxed contrastingly throughout the planet. Every nation has its own crypto guidelines, either being set up now or back when the industry was gaining popularity. However, it is also the topic where a business person currently trading in cryptocurrency’s disarray starts. When they sell their crypto, what befalls their capital additions?

There are many countries that have built a friendly attitude towards cryptocurrency. This article entails a list of the most crypto-friendly countries. Continue reading to know more.

1. Singapore

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In terms of political stability, this high-ranking country is one of the few that supports a zero-capital-gains policy on bitcoin earnings. The Singapore Monetary Authority also enables some cryptocurrency companies to operate without a license for a six-month grace period. The most recent Payment Services Act permits firms to trade in cryptocurrency without a permit and flood themselves in gains.

The country’s regulatory body has also taken some crypto-friendly steps, such as publishing guidelines for initial coin offerings (ICOs) in 2017. Singapore is even more appealing to crypto users and investors because individuals can spend BTC and other cryptocurrencies at a variety of businesses throughout the country.

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2. Switzerland

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Switzerland is known as Europe’s crypto-valley and an innovation hotspot. Crypto transactions are treated the same as ordinary cash transactions by the Swiss Federal Tax Administration, which exempts them from tax reporting.

Cryptocurrency investors love Switzerland because of the lack of taxation on crypto trading revenues. Ethereum, Tezos, and the Diem Association are among the significant crypto foundations that have selected Switzerland for their global headquarters.

Profits from crypto businesses and professional trading, on the other hand, are subject to income taxation, which varies by location, as well as annual wealth tax.

3. Germany

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Germany is one of the most crypto-friendly countries globally, as it is one of the few crypto-tax-free nations.

In contrast to the rest of the EU, Germany has a unique approach to cryptocurrency taxes that favors individual investment. The laws protect bitcoin and other cryptocurrencies from capital gains tax if held for more than a year.

If you swap the funds for cash or other cryptos within a year, you are still free from paying tax if your profit is less than €600 ($700). Investors must report their income for tax purposes if their gains exceed that limit.

On the other hand, businesses must record and pay corporate income taxes on crypto gains, just like any other asset.

4. Malta

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The famed blockchain island of Europe, which is home to many crypto and blockchain startups, has various rules that encourage crypto investors and entrepreneurs.

Overseas enterprises operating in Malta, as well as foreign citizens, enjoy a number of benefits. For long-term investments in digital currencies, they do not have to pay income or capital gains tax in Malta.

On the other hand, Crypto trades are subject to a 35 percent income tax because they are legally defined as stock trading. However, if you take advantage of the country’s financial system’s structuring possibilities, you can reduce this to 0–5%.

Bitcoin and other financial tokens are treated differently in Malta. Dividends, interest, and premiums are examples of monetary tokens and are subject to standard income tax.

The income tax rate for non-domicile corporations is 5%. Malta is a tax haven for foreign corporations, companies, and residents, as well as one of the most crypto-friendly countries.

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5. Portugal

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The tax authorities in Portugal have chosen to take a lenient approach to bitcoin investing. The Portuguese legal system is well-known for being cryptocurrency-friendly. Individuals who benefit from purchasing and selling cryptocurrencies in Portugal are not subject to capital gains taxes. Furthermore, there is no taxation on the trade of crypto coins for other currencies.

Individual investors concerned about income taxes charged on bitcoin payments will find Portugal a desirable option. The situation is different for enterprises in Portugal that receive bitcoin payments and must pay conventional capital gains taxes. The idea is that if you are paid in bitcoin, you may avoid paying high capital gains taxes. “An exchange of cryptocurrency for ‘real’ currency is an on-demand, VAT-free exercise of services,” according to the Portuguese tax authorities.

In a nutshell, individual bitcoin investors would be advised to explore Portugal because of its favorable tax policy. Companies aren’t given the same leeway, so it’s unlikely that a slew of businesses will relocate to Portugal shortly to reap the benefits.

6. Belarus

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Belarus’ president, Alexander Lukashenko, intends to transform the country into a digital economy based on cryptocurrency. As a result, he enacted a new law legalizing cryptocurrencies in 2017. Until 2023, when the law will be reviewed, the legislation exempts enterprises and individuals from crypto taxes.

Income tax and capital gains exemptions apply to crypto mining and investing. Belarus seeks to promote technological innovation, and its legislative approach to crypto trading makes it one of the most crypto-friendly countries on the planet.

Conclusion

There are undoubtedly more countries that have a favorable stance toward cryptocurrencies than those listed here. Nonetheless, the common thread that runs across all the countries mentioned above is that they are not overly taxed or regulated, and individuals are free to own these assets. Is this, though, sufficient? Will these nations continue to be crypto-friendly in the future? Or will they start working against it, erecting higher barriers? It’s difficult to tell right now.