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Less Than 1% of Crypto Investors Declared Their Taxes to Authorities (Study)

According to Divly, a Swedish tax firm, only 0.53% of cryptocurrency investors worldwide paid taxes on their trades last year.  The average percentage of people who follow the rules varies by country. For example, more than 4% of Finnish investors have paid taxes, whereas only 0.03% of Filipino investors have.

Divly investigated 24 countries to determine what percentage of people in each region declared their cryptocurrency trades to the appropriate authorities and paid appropriate taxes in 2022. With 4.09% settling their taxation policies, Finnish investors are the strictest. Finland also had the highest payment rate in Europe, with 0.26%, while Italy had the lowest with 0.26%.

One explanation for the figures in the Southern European country could be that Italians were only required to declare their crypto holdings if the value of their holdings exceeded €51,645 (approximately $56,000). Certain changes in that field are planned for the 2023 budget, which could result in a lower threshold.

With a payment rate of only 0.03%, the Philippines has the world’s lowest payment rate. Locals face a 35% tax, but only if their income from digital asset trading exceeds $4,500. The United States, which has the most cryptocurrency taxpayers, saw 1.62% of its investors follow the rules, while Canada had 1.65%.

Japan had the highest tax payment rate in Asia, at 2.18%. With 0.65%, Singapore ranked second on the continent.  According to the analysis, nearly 95.5% of global cryptocurrency traders did not pay their taxes in 2022. However, Divly believes that the figures will improve once governments enact new regulations and seek better enforcement.

 

Another Coincub study found that Germany, Europe’s largest economy, has the best crypto tax legislation. The Ministry of Finance announced last year that it will not tax private individuals who sell bitcoin or ether after holding the assets for more than a year. Prior to those changes, digital currencies had to be kept for ten years in order to be tax-free.

Italy came in second, with Switzerland (where laws vary by canton) coming in third. Most provinces in the Aplean nation, however, do not require residents to pay crypto taxes.  Singapore and Slovenia completed the top five. While residents of both countries are currently exempt from cryptocurrency taxes, Slovenes may face a 10% tax in the future.

 

Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Crypto is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Crypto market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.