A recent research report by Coincub and Blockpit highlights how varying tax policies, from zero taxes in the UAE to high rates in the U.S., shape crypto investment strategies.

Global Crypto Taxation Landscape

The crypto taxation landscape varies widely across the globe. Data from Blockpit and Coincub reveals that the UAE remains an attractive destination for crypto investors, with no personal income or capital gains tax on cryptocurrency gains for individuals. Similarly, Switzerland positions itself as a tax haven, offering zero personal income and capital gains tax on crypto gains.

Europe’s Mixed Tax Policies

In Europe, the situation is more mixed. While some nations provide favorable tax conditions for long-term holdings, others maintain elevated tax rates. For example, Denmark has one of the highest personal crypto tax rates globally, with up to 53% of long-term and short-term capital gains from crypto being taxed by the local watchdog.

The old continent “has the most tax breaks for long-term hodling your Bitcoin.”

The report notes that, on average, many European countries impose relatively high taxes on crypto gains. Despite this, Europe offers significant tax breaks for long-term crypto holders.

High Taxation in the United States

The United States has the highest total gains and average tax rates of 17.5% (long-term) and 23.5% (short-term). Analysts estimate that this could potentially bring in tax revenues of approximately $1.87 billion. However, they warn that high taxation could discourage investment, pushing crypto activities underground or forcing investors to relocate to more tax-friendly jurisdictions.

Nations like Vietnam, Turkey, and Argentina might prioritize attracting crypto investment, fostering technological innovation, and providing alternatives to unstable local currencies over immediate tax collection.

Future Changes in Global Crypto Taxation

Analysts indicate that the global approach to crypto taxation is set to undergo significant changes starting in 2025, driven by international initiatives such as the Crypto-Asset Reporting Framework (CARF) and the Tax Administration for the Reporting of Crypto-Asset Activities (TARKA).

Developed by the Organization for Economic Co-operation and Development, CARF aims to enhance tax transparency and combat tax evasion by creating a global framework for reporting crypto transactions. In parallel, TARKA is designed to facilitate cooperation among tax authorities in the 48 participating countries, according to the report.

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