Every time digital financial market led by cryptocurrencies is leading the way towards a future where the economies and finances of the world can be oriented towards using crypto assets as investment tools and economic growth not only for individuals but also for corporations.
It is exciting and surprising at the same time that there are many countries where you can live without having to pay taxes on your crypto income. For additional information, you might want to consider knowing the reasons why you need a crypto wallet.
What is a crypto tax haven?
Just as some countries impose high rates on crypto investors for the concept of crypto profits, there are also countries considered friendly with digital assets, where on many occasions, the payment of said taxes can be tiny sums or equal to zero. It is how the so-called crypto tax havens arise.
There are many users of these digital financial instruments who want to live with the possibility of not having to pay taxes on profits or income obtained from investments or negotiations of exchange, purchase, and sale of crypto assets in these countries exist.
Even though many governments do not see with the best eyes and intentions the possibility of linking the digital financial market with the economy and traditional finances, they have established specific regulations that allow the coexistence of both markets.
Such is the case of the personal income of any individual when they come from abroad, whether in the nations of Southeast Asia or the American continent; the possibility of living without paying taxes is possible, although crypto assets lack legality.
On many occasions, people linked to the management and investment in cryptocurrencies are often questioned regarding the transparency and legality of their funds.
Benefits offered by tax havens to crypto investors
The revaluation of cryptocurrencies in recent years has led to an increase in their market capitalization, where many investors have managed to obtain fortunes that lead them to long-awaited financial freedom.
Just as investors of crypto assets benefit, governments are not so innocent as not to want at least a small portion of the profits, and there is no other way than the fiscal one.
Governments have designed various strategies for payment and tax exemption for all those beneficiaries of cryptocurrencies where the best way is usually not to declare cryptographic operations.
The most convenient if after having obtained profit from digital financial investments and converting them into Fiat currencies, they should be declared to avoid future inconveniences before government entities.
10 Crypto havens in the world
Below are the top countries that are considered to be crypto-friendly.
In the case of this country, individuals cannot declare the profits obtained because of crypto investments, unlike companies that must report the tax on capital gains.
The profits from long-term investments for the purchase of cryptocurrencies are not subject to payment of taxes, unlike regular investments, which have to pay taxes.
- United Arab Emirates
The income tax rate in Dubai for crypto operations is equal to 0.
A rate of less than or equal to 5% is paid for cryptocurrency purchase and sale operations.
- The Bahamas
There is no tax on this operation; even paying other taxes with crypto assets is accepted.
Although earnings are not taxable, cryptocurrency trading is subject to a 35% tax.
- Puerto Rico
It adheres to the illicit use of digital currencies following the country’s regulations and, in turn, does not pay any tax on the profits obtained.
Cryptocurrencies are not considered assets, which is why they are exempt from paying taxes, plus regular activities carried out by traders must pay taxes.
- El Salvador
It is the first country to adopt Bitcoin as a legal tender, so it frees foreigners from paying taxes.
No tax is paid, but crypto investment activities must be declared.
Although more than a decade has passed since cryptocurrencies were created, many things could be improved regarding how the relevant fiscal controls should be exercised. It is there that most governments begin to create regulatory instruments for them.