The future of crypto taxation: Understanding the constantly changing landscape

The future of crypto taxation: Understanding the constantly changing landscape

Crypto taxation is still a controversial area, but some transparency should be expected.


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When we examine the current state in which crypto taxation is being applied around the world, it becomes clear that there has been a shift towards increased regulation and maturity. Many governments are now recognizing the benefits of blockchain technology across various sectors. The regulatory landscape around blockchain and cryptocurrency is changing rapidly as the industry continues to grow and become more mainstream.

Cointelegraph Research recently released its Cryptotaxation Database. This database takes a closer view at crypto taxation approaches on a national level, and includes the following features.

  • This is a comprehensive overview of crypto taxes by country, including tax rates, laws, and policies.
  • There should be a clear distinction made between taxable and non-taxable situations.
  • This information is useful for businesses, investors and policymakers who are interested in the taxation regimes of different jurisdictions.

In Europe, for example, blockchain technology has been actively promoted in the fields of finance, logistics, and healthcare. The European Securities and Markets Authority has published guidance on regulating Initial Coin Offerings. The European Parliament called for a holistic approach to regulation cryptocurrency.

Explore Cointelegraph Research’s Crypto Taxation Database

In Asia, South Korea has announced plans to tax cryptocurrency exchanges and implement a 20% crypto earnings tax that was delayed from January 2023 until 2025. Questions about how to tax and regulate cryptocurrency transactions are raised, which highlights the need for an integrated global approach.

The classification determines the tax treatment

It is vital that individuals comply with the tax laws in their jurisdiction by determining whether a cryptocurrency is an asset, currency, or property.

When a country treats a cryptocurrency like any other asset (such as bonds, stocks or commodities), it will be treated the same as other assets. Capital gains tax is applied to gains and losses resulting from the trading or sale of cryptocurrency.

When a country treats cryptocurrency as property, it’s treated like a car or piece of jewelry. In the United States, for instance, the Internal Revenue Service classifies cryptocurrency as a property, which means that taxpayers are required to report capital gains and losses in their tax returns.

Tax rates on cryptocurrency gains vary in the U.S. depending on the length of the gain (less than a year) and the amount (more than a year). In 2023, for example, standard income tax rates will range from 10 to 37% depending on an individual’s level of income. For 2023, the long-term capital gain tax rates would range between 0% and 20% depending on an individual’s income.

If you’re interested in learning more about the taxation rates for various crypto-activities around the world, be sure to use the data from the Cointelegraph Research Crypto Taxation Database.

How to deal with crypto mining and gains

Individuals and businesses are required to report tax in different ways. Some countries have passed legislation or issued guidelines to address these concerns.

In Germany, cryptocurrency is classified as an asset, and the profits from its sale or exchange are subject to capital gain tax. Germany also has a comprehensive guide for computing and managing tax, which covers topics such as decentralized finance (DeFi), nonfungible tokens and even tax-free income subject to certain exceptions.

If your profits from short-term investments are less than $600 per year, you do not have to pay tax. Or, if you keep your cryptocurrency for an entire year before you spend it, taxes are waived. Most countries are still determining the best way to handle cryptocurrency.

The taxation of crypto is largely influenced by the income from mining and staking. Some countries classify income from mining and staking under ordinary income while others treat it as capital gains. It can have an impact on how much tax you owe and how to report it. Income from mining and staking in the United States is taxed according to an individual’s marginal rate between 10%-37%. This is because it is a business activity, not a capital investment.

In Canada income from mining and staking are also treated as ordinary income. Income tax is levied at the marginal rate of taxation, which can range from 20,5% to 33% on a federal level, plus additional provincial taxes, which may vary from 0% up to 21%. Some countries, like Singapore, treat mining and staking income as capital gains, which are not taxed. However, individuals may be subject to additional taxes.

Keep up with the Changes

For example, a href=”,value%20of%20the%20held%20cryptocurrencies.” For example, Switzerland offers tax exemptions for crypto-related activities, including holding cryptocurrencies and transferring them between wallets, generally providing a well-defined regulatory framework for businesses operating within the digital currency sector.

To reduce tax burdens, individuals and businesses must be aware of the most recent regulations. They should also seek professional advice. An announcement by Chancellor of Exchequer Jeremy Hunt made on March 15, 2020, affects United Kingdom taxpayers, who will have to file their crypto profit separately from 2025.

This article is intended for informational purposes and does not provide advice or recommendations to any particular individual, or about any specific investment or security product.

To avoid any legal consequences, it’s important to stay up-to-date with all the taxation rules and rates in different jurisdictions and taxable events. Cointelegraph Research Taxation Database can help you stay on top of all taxation laws, rates and taxable events in different jurisdictions.