As the crypto industry evolves, governments have been compelled to develop specific tax legislation. We examine the current state of affairs in major jurisdictions.
United States
In the US, cryptocurrencies are taxed similarly to traditional securities. The specific rate depends on how the assets were acquired and how long they are held.
Profits from investments held for less than a year are taxed at rates ranging from 10% to 37%. For those holding assets longer, the rate is 0%, 15%, or 20%, depending on income levels.
Purchasing or receiving cryptocurrencies as a gift does not incur taxes. Instead, the IRS focuses on realized gains or losses from their sale, including exchanges for other digital assets. Their use in staking or payments for goods and services is also considered.
Receiving cryptocurrency as salary or payments is considered income and is taxed accordingly. The same applies to mining, where the tax authority considers the value of coins at the time of receipt.
Recorded losses from digital asset transactions and donations to registered charities may qualify for tax deductions.
European Union
Despite the implementation of MiCA as a common standard for crypto regulations in the European Union, as of the end of 2024, most member states apply their own rules.
“Most European countries classify cryptocurrency as property, taxing income from sales, exchanges, payments, and so on. However, the specifics of these taxes vary significantly across countries,” explained Elisenda Fabrega, chief legal officer of the Brickken platform, explained.
In Italy, cryptocurrencies are classified as “a digital representation of value or rights that can be transferred and stored electronically using distributed ledger technology or similar.” Since 2023, the country has imposed a 26% tax on capital gains exceeding €2000 ($2145) from cryptocurrency trading. The government plans to increase the levy to 28%.
In Germany, cryptocurrencies are considered “private money,” and profits from transactions are not taxed if the holder kept the assets for more than a year or earned less than €600. In other cases, the levy can reach 45%.
In Spain, earnings from digital assets are considered “general income,” subject to a tax of 19% to 28%. Income from mining is taxed at 19% to 47%.
In Portugal, taxes on cryptocurrency income can reach 53%, including a 28% standard capital gains tax. At the beginning of 2024, the country offered incentives for small and medium-sized firms.
In the Czech Republic, in December 2024, the tax on earnings from bitcoin operations was completely abolished for those who held coins for more than three years.
In Denmark, the capital gains tax on cryptocurrency ranges from 27% to 42%. The rate for income from mining and staking reaches 56%. Losses can be declared for tax deductions, but this applies only to similar transactions—losses from bitcoin trades can offset profits from trading other cryptocurrencies. The government also plans to tax unrealized gains.
United Kingdom
According to British regulations, taxes apply to the sale, use for payment of goods, exchange for other assets, and gifting of cryptocurrencies.
Transferring assets between one’s own wallets, as well as transferring to a partner or spouse, is not taxed.
Depending on income levels, the rate can reach 45%. The first £3000 is tax-free.
Losses from cryptocurrency operations, similar to US regulations, qualify for tax deductions.
Earlier, on December 12, a crypto trader in the US was sentenced to two years in prison for submitting false income data from bitcoin sales.