Less Than 1% of Crypto Investors Declared Their Taxes to Authorities (Study)
According to a study conducted by the Swedish tax firm Divly, only 0.53% of cryptocurrency investors globally paid taxes on their trades last year.
The average share of people abiding by the rules varies in different countries. For example, over 4% of Finnish investors have paid taxes, while only 0.03% of those in the Philippines have done so.
The Trends Across the Globe
Divly explored 24 nations to determine what chunk of people in each area declared their cryptocurrency trades to the relevant authorities and paid appropriate taxes in 2022. Finnish investors seem to be the strictest, with 4.09% settling their taxation policies. Finland also had the highest payment rate in Europe, while Italy was at the bottom with 0.26%.
One reason explaining the figures in the Southern European country could be the fact that Italians had to declare their crypto only if their holdings’ valuation was more than €51,645 (around $56,000). The 2023 budget has scheduled certain changes in that field, which could result in reducing the threshold.
The Philippines is the country with the lowest payment rate in the world, with just 0.03%. The lawmakers slam locals with a 35% tax, but only if their income from digital asset trading exceeds $4,500.
The USA – the nation with the most cryptocurrency taxpayers – saw 1.62% of its investors abiding by the rules, while its northern neighbor – Canada – marked 1.65%.
Japan was the Asian country with the highest tax payment rate at 2.18%. Singapore was second on the continent with 0.65%.
The analysis revealed that nearly 95.5% of global cryptocurrency traders had not paid their taxes in 2022. However, Divly believes the numbers could improve once governments impose amended regulations and seek better enforcement.
Some of the Crypto Tax Heavens
According to another research carried out by Coincub, Europe’s leading economy – Germany – has the best crypto tax legislation. The Ministry of Finance disclosed last year that it won’t tax private individuals when selling bitcoin or ether if they have held the assets for over a year. Prior to those amendments, digital currencies had to be kept for ten years to be exempt from taxation.
Italy ranked second, while Switzerland (where legislations vary in each canton) was placed third. However, most provinces of the Aplean nation do not require residents to pay taxes on crypto.
Singapore and Slovenia rounded up the top 5. While the residents of both countries are currently exempt from crypto taxes, Slovenes could be slammed by a 10% rate in the future.
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