cryptocoingossip

Cryptocurrencies revolutionize many sectors, especially financial activities such as buying, selling, investing, you name it.

Even cryptos make people’s lives easier. Many governments do not see cryptos with friendly eyes.

As a result, many countries banned crypto activities in their jurisdictions.

However, many countries put cryptos in grey areas by not fully banning crypto activities and many pass rules and regulations tax laws to involve any crypto activities.

So, in this post, I’m listing 10 crypto-friendly countries that have not banned crypto activities and imposed some laws and made it legal tender. By knowing the list of crypto-friendly countries, you can start any crypto business easily, or you can leverage their laws to elevate your existing business or crypto activities.

#1. El Salvador.

El Salvador is a small Central American country that became the first country in the world to make Bitcoin a legal tender.

In June 2021, El Salvador’s president Nayib Bukele announced they recently passed a law that has made bitcoin legal tender which will come into effect from September 2021.

Also, the president announced that the government gives away $30 worth of Bitcoins to every El Salvador’s adult citizen when they download and register the government’s cryptocurrency app.

Before Bitcoin US Dollar was the official currency in El Salvador since 2001; now Bitcoin will join, not replace, as a legal tender.

#2. United States.

The US did not consider Bitcoin or any cryptos as a legal tender but not even against the digital asset.

US Internal Revenue Service(IRS) issued some tax guidance to crypto income.

And made crypto exchanges legal by imposing Bank Secrecy Act (BSC) which requires licence from FINCEN, implement an AML/CFT and sanction programs, maintaining appropriate records and submit reports to the authorities.

Meanwhile, the US Securities and Exchange Commission (SEC) indicated that it considers cryptocurrencies to be securities and apply security law.

Plus, the Commodities Futures Trading Commission (CFTC) has adopted a friendlier approach towards cryptos, recognizing Bitcoin and Ethereum as commodities allowing other virtual and cryptocurrency derivatives to trade publicly on the exchange that it regulates or supervises.

#3. Singapore.

Singapore is considered a tech and investment-friendly country, not having any capital gain tax.

The country has been crypto-friendly from the early days of crypto; their Inland Revenue Authority decided to put Bitcoin in the goods category, not treated as currency. Therefore any company dealing with Bitcoin is required to pay 7% GST (Goods and Services Tax) when trading Bitcoin or using it for purchases.

And the Monetary Authority of Singapore (MAS) closely monitors cryptocurrencies activities like ICO’s, exchanges AML/CFT also warn consumers of any risks.

Even being a small country, Singapore has 10 crypto ATM’s in different locations.

#4. Malta.

Malta is a small EU member and crypto-friendly nation.

Malta is known for welcoming several exchanges, including Binance, one of the largest crypto exchanges, while their host nations tighten the rules.

Also, Malta is one of the few EU countries which does not impose a property tax and foreign residents do not have to pay any income tax on income generated outside Malta. However, Business taxes for “global residents” are 35%.

In 2018 Maltese government created the new Malta Digital Innovation Authority, which provides a comprehensive regulatory framework for crypto businesses and certifies blockchain platforms used by companies. It will also improve the verification processes for crypto platform users.

#5. Switzerland.

Switzerland is known for their Banking system, which gives the highest privacy with low risk.

Country’s Zug Canton is home to crypto startups like Shapeshift, Xapo and called “Crypto Valley”.

Switzerland doesn’t have specific tax laws for cryptos, but different cantons define crypto tax laws differently.

However, on 27 November 2019 Swiss Federal Council proposed new rules for digital assets called Developments in Distributed Ledger Technology (DLT bill) concerning, inter alia, the amendments to the Swiss banking regulation, financial market infrastructure regulation and the anti-money laundering regulation.

The Swiss Parliament adopted the DLT Bill in September 2020 and will enter into force on 1 August 2021.

In October 2020, the Swiss Federal Tax Administration amended its relevant guideline for Swiss value added tax (VAT) that treats crypto payments in the same manner as the use of fiat currency, the transfer of asset tokens and utility tokens is generally considered as a supply for VAT purposes.

#6. Germany.

Germany is a heaven for individuals who want to hodl cryptos long term, meaning more than a year because there is no tax for holdings cryptos over a year by a corporation as there is for individuals.

Even Germany’s National Tourist Board approved Bitcoin as an acceptable means of payment in 2018.

The country took a more liberal stance on cryptocurrencies in 2020, allowing banks and financial institutions to manage cryptos on behalf of clients.

#7. Portugal.

Portugal doesn’t have specific laws or regulations related to crypto issuance and transfer. Hence cryptos are not prohibited, and investors are allowed to purchase, hold and sell cryptos.

In 2016, the Portugal Ministry of Finance issued a notice stating that retail trades of cryptocurrencies would be non-taxable and that only trades or income generated from professional activities would be taxed.

Portugal has continued its stance toward cryptos since then. Also, in 2019 Portugal’s Tax and Customs Authority declared that mining rewards and crypto payments are not subject to VAT in Portugal.

But ICO’s are analyzed on a case-by-case basis meaning some ICOs fall under the consumer protection regulations, some under security regulations.

#8. Bermuda.

Bermuda is considered as the tax haven; there are no VAT, nor any corporate, income, wealth or capital gains taxes. Bermuda has only a minimal payroll tax, which is around 10% on the high end, as well as high consumption taxes on goods and services.

The same tax structure applies to cryptos as well, so there are no income, capital gains, withholding or other taxes imposed in Bermuda on digital assets or any transactions involving them.

But for monitoring crypto activities like ICO’s, Crypto Exchanges, Wallet services, or issuing licences Digital Asset Business Act (DABA) came into force in 2018.

#9. Belarus.

In 2018 to boost the development of a digital economy and technological innovation, Belarus waived all the taxes on cryptocurrency transactions and income for five years (so until 2023).

Until 2023 all the crypto activities like Mining, Trading, even gifting inheritance are also exempt from the taxes on Belarus.

As A result of this liberal stance on cryptos, the country was recently ranked third in Eastern Europe and 19th globally in levels of P2P crypto trading.

#10. Japan.

Japan recognized Bitcoin as real money in 2016.

And all the cryptos considered as “Crypto Assets”, profits or income from the crypto asset fall under the tax structure.

Anyone earning above 20m JPY annually or making a profit over 200k JPY will be eligible for tax or If an income tax is accrued on the profit made by cryptocurrencies, it is categorized as miscellaneous income and becomes part of aggregate income in the tax year.

The country has a 7-tiered system of taxation. Tax rates range between 5 and 45 percent, based on annual earnings.

For monitoring crypto exchanges and capital requirements, the Virtual Currency Act went into effect on the 1st of April 2017.

Conclusion.

Above are the countries seeing cryptos with a friendly eye.

Some already passed laws regarding crypto activities, some not bothered by cryptos, and some welcomed cryptos with smiles and big hugs, allowing every crypto activity.