Legal Experts Identify Crypto-Friendly Tax Jurisdictions

The law firm Manimama analyzed the tax systems of various countries to determine which are most favorable to cryptocurrency holders. 

The experts identified seven jurisdictions offering incentives to participants in the crypto market.

These include:

1. Lithuania: a basic corporate tax rate of 15%, with 0-5% for small businesses. Capital gains tax does not apply to crypto asset transactions.
2. Germany: 15% profit tax and 3.5% trade tax. However, taxation also depends on municipal trade tax rates.
3. Portugal: incentives for small and medium-sized firms, and a zero rate for the first €50,000 of total taxable income.
4. Switzerland: 8.5% federal tax and cantonal taxes ranging from 11% to 21%.
5. Dubai: 9% corporate tax, with a 0% rate in free zones. A zero rate also applies to the first 375,000 dirhams ($100,000) of total taxable income. Additionally, the jurisdiction offers tax residency to company owners.
6. Singapore: 17% corporate tax, with differentiated rates for various income levels and tax incentives for individual investors.
7. Malta: zero rates on income up to €9100 for singles and €12,700 for married couples. Capital gains tax is not levied on long-term income from cryptocurrency sales if considered a “store of value.”

The study caught the attention of Ukraine’s Deputy Minister of Digital Transformation for IT Development, Oleksandr Bornyakov.

He stated that Ukraine should also offer incentivizing taxation for crypto asset operations.

“Such an approach will promote the development of the digital economy and improve the investment climate in the country,” Bornyakov wrote.

The Ministry of Digital Transformation is the author of an alternative bill on the taxation of bitcoin operations. It proposes a gradual increase in rates for individuals and exemption from VAT for legal entities, except for operations with tokenized assets.