Business and Taxes
April 8, 2024
Reading Time: 12 min

Crypto tax-free countries: how to optimise taxes on your crypto assets

The first cryptocurrency emerged in 2009, and as this market is young, governments are still developing rules for handling crypto.

While there are countries that ban cryptocurrency or impose taxes on it, there are countries with no crypto taxes.

The list of the most crypto-friendly countries as of December 2023 includes Portugal, Malta, the UAE, Germany, Bermuda, the Cayman Islands, El Salvadore, Georgia, Singapore, Hong Kong, Malaysia, Puerto Rico, Switzerland, the British Virgin Islands, and Gibraltar.

Albert Ioffe
Albert Ioffe

Told about crypto tax regimes in different countries

Crypto tax-free countries 2023

Crypto tax-free countries: how to optimise taxes on your crypto assets

What taxes you might have to pay as a crypto holder

Crypto is taxed differently around the world. However, most governments treat it like a capital asset rather than a fiat currency. So, to the government, if you hold crypto, you do not own money, like dollars, but have assets, like shares or bonds. And taxes you have to pay are applied accordingly.

As crypto taxes may be rather high, crypto holders look for ways to reduce them legally. One of the ways is to get tax residency in a country with low crypto taxes or a crypto tax-free country.

To change tax residency, one should obtain citizenship or a residence permit in the chosen country and spend at least 183 days a year there. In some countries, like Malta, Portugal, and the UAE, foreigners may acquire residency by investment.

After getting the status, the investor can move to the country, become a tax resident, and optimise taxes on their crypto assets.

In general, you do not pay taxes just for holding crypto. Taxable events occur when you earn or spend it from your wallet. Most countries apply an income tax and a capital gains tax depending on the type of profit you get.

An income tax is paid when you earn cryptocurrency. Sources of income may include the following:

  • getting paid in crypto, for example, receiving a salary or getting crypto in exchange for services or goods;

  • mining crypto, i.e. verifying crypto transactions and entering new units of crypto in circulation for a reward;

  • staking crypto, i.e. locking up crypto units to maintain the security of a blockchain network for a reward;

  • getting airdrops — small amounts of coins or tokens of a new cryptocurrency as a part of a crypto promotion campaign;

  • earning interests and other incentives in crypto, such as referral bonuses for friends you attracted to the crypto exchange.

A capital gains tax is applied when you earn profit by disposing of the crypto you own. This may occur in the following cases:

  • selling crypto for a fiat currency, like dollars, for more than you initially paid for it;

  • exchanging one cryptocurrency for another;

  • spending crypto on goods and services because this is usually regarded as a crypto-selling transaction.

The same amount of crypto may be taxed twice, depending on the legislation: when you earn it, you might be obliged to pay an income tax, and when you dispose of it, you might have to pay a capital gains tax.

Main factors that make a country crypto-friendly

Cryptocurrency is legally accepted. Some countries have entirely banned cryptocurrency. These include China, Egypt, Algeria, Bangladesh, Ethiopia, and Iraq.

In most African countries, as well as in Indonesia, Kazakhstan, Turkey, Ecuador, Bolivia, and Saudi Arabia, cryptocurrency is banned partially. This means that banks can’t offer crypto services, and apps for buying and selling crypto can’t legally operate.

Thus, recognising and legalising crypto is one of the main criteria of a crypto-friendly country.

Minimum or zero tax rates on crypto. When the government legally recognises crypto, it works out an approach to its regulation and taxation. Most crypto-friendly countries impose very low or zero tax rates or offer conditions allowing crypto assets to be exempt from taxes.

15 crypto tax havens

The crypto market is still developing, so regulations in different countries can change. To make sure you have up-to-date information, check the most current data on the governmental portal of the country you are interested in. For example, you can find information on cryptocurrency on the Malta Financial Services Authority website.

Below are the 15 best countries for crypto taxes as of December 2023.

#1. Portugal was one of the most popular crypto tax-free countries until recently. Since 2023, the country has been applying a 28% tax for short-term crypto gains from selling crypto held for less than a year. Long-term gains are still tax-free. Additionally, you will not have to pay taxes for crypto-to-crypto sales as well as for non-fungible crypto assets such as NFTs.

Foreigners wishing to move to Portugal can benefit from more straightforward ways of getting a residence permit. There are residency by investment and passive income visa programmes operating in the country.

The Portugal residence permit by investment, or the so-called Golden Visa, is granted to foreigners who invest at least €250,000 in the country’s economy. Available investment options include supporting arts and cultural heritage, financing research activities, purchasing investment fund units, opening a company or investing in an existing business.

A residence permit is granted for two years and can further be extended. After 5 years, the investor and their family can apply for citizenship.

The Portugal Passive Income Visa, officially named the D7 visa, is granted to financially independent foreigners.

To qualify, a person should rent or buy property in Portugal and confirm having a passive income. The minimum passive income depends on the minimum salary in Portugal. In 2023, it is €760 per month. From January 1st, 2024, the required minimum passive income will be €820 a month.

The residence permit is given for 2 years and can be extended for extra 3 years. After 5 years, a person can obtain citizenship.

#2. Malta is called a blockchain island because it recognises crypto as a medium of exchange and a store of value — the country headquarters popular crypto exchanges such as Binance.

Crypto investors in Malta do not pay capital gains taxes for any profits on their long-term investments. However, professional crypto traders engaged in frequent and short-term transactions might have to pay a business income tax. The usual tax rate is 35%, but this can be reduced to 0—5% depending on the residency status of the trader and the amount of profit they made from crypto.

To enjoy all the benefits of Malta crypto taxation, a person should spend at least 183 days a year in the country to become a tax resident. For a more straightforward relocation to Malta, wealthy foreigners can obtain residency or citizenship.

To obtain the Malta residence permit, one should rent or buy real estate and pay administrative fees. The minimum investment amount is €8,750 per year for a property rental option and €220,000 for a purchase option.

Upon receiving a residence permit, the investor becomes a tax resident of Malta and pays taxes under the special tax regime:

  • 15% — on the income earned outside Malta and transferred inside the country;

  • 0% — on global income not transferred to Malta;

  • 35% — on the income earned in Malta.

Malta permanent residence is granted to foreign investors who fulfil all the required conditions:

  • rent or buy real estate in the country;

  • pay a €40,000 administration fee;

  • pay a contribution fee of €58,000 in case of real estate rental or €28,000 in case of real estate purchase;

  • make a €2,000+ charitable donation.

Price thresholds for renting and purchasing real estate depend on the property’s location. For rent, €10,000 a year is the minimum monthly payment if the property is in the south of Malta or Gozo, and €12,000 a year is the minimum for properties in the north and centre of Malta. The minimum purchasing price is €300,000 and €350,000, correspondingly.

Applicants should also confirm having €500,000 in available assets, including €150,000 of liquid financial assets, such as deposits, stocks, or bonds.

Malta citizenship can be acquired by naturalisation for exceptional services by direct investment. To qualify, applicants must invest at least €690,000 and fulfil the following conditions:

  • contribute €600,000+ to the National Development and Social Fund;

  • make a €10,000 charitable donation;

  • rent real estate for 5 years for €16,000 annually or purchase one for €700,000.

First, investors get a residence permit for 1 or 3 years, and after this time elapses, they can apply for a passport.

Individual cost calculation of the Maltese citizenship

Individual cost calculation of the Maltese citizenship

#3. Switzerland is considered to be a top crypto tax haven and is called “a crypto valley.” The country is home to some major crypto projects such as Bitcoin Suisse and Ethereum.

There are certain crypto taxes to be paid, but they depend on the tax bracket and the activities of a crypto investor. Qualified crypto traders and miners have to pay a 0—13.2% income tax and a 0.5—0.8% wealth tax that depends on the total annual revenue.

Individual investors are exempted from capital gains tax and can trade crypto tax-free. At the same time, if crypto is held as a part of an individual’s business assets, it is subject to a capital gains tax.

Financially independent foreigners can obtain a Switzerland residence permit. To qualify, they have to pay a lump-sum tax. The tax amount depends on the canton and the family’s expenses and ranges from ₣450,000 to ₣1,000,000 per year. Except for the lump-tax, the investor pays ₣18,000 social security contributions per each adult family member and additional costs such as medical insurance.

The residence permit should be renewed every year. It allows the investor and their family to live in Switzerland without the right to work in the country.

Countries that do not tax crypto in 2023

#4. The United Arab Emirates is an emerging crypto and blockchain hub. In the beginning of 2023, Ras Al Khaimah, one of seven Emirates, launched a free zone for digital and virtual asset companies with 100% foreign ownership, no corporate or personal income tax, and 0% customs duties.

Individual investors in the UAE do not pay income or capital gains tax on their crypto. However, it is worth remembering that the cost of living in the UAE remains high, and goods and services, including those purchased with cryptocurrencies, are subject to a 5% VAT.

Foreigners wishing to move to the UAE can obtain a residency visa by investment.

The UAE Golden Visa is granted for 2 or 10 years and is available to those who purchase real estate in the country. To get a 10-year visa, an investor should buy property for AED 2,000,000, or about $545,000. A 2-year visa is granted for AED 750,000, or $204,000, property investment.

Real estate is bought in the Freehold Zones, special areas where foreigners are allowed to purchase property. An investor may take a mortgage provided the down payment is 50%.

Individual cost calculation of the UAE Golden Visa

Individual cost calculation of the UAE Golden Visa

#5. Germany is not totally crypto-tax-free, but it allows crypto holders to avoid taxation legally. The legislation considers crypto a private asset, so all crypto transactions have the status of private sales and are only subject to an income tax.

If you hold crypto for more than a year, you will not have to pay taxes for profit from selling it. If crypto is sold before a year elapses, any profit below €600 is also exempt from taxation. When staking, an income tax is paid when crypto is held for less than 10 years.

Germany still imposes taxes on those who get paid in crypto and for mining crypto. Income tax rates in Germany range from 0 to 45% and depend on the total annual income and the relationship status of the taxpayer.

#6. Georgia is one of the top crypto-friendly countries. For individual investors, it is completely crypto tax-free: there is no income tax on profits from sales, and as crypto is not considered to be "Georgian-sourced", no capital gains tax is applied.

Businesses holding crypto pay a 15% corporate tax, which is relatively low compared to other countries.

Top crypto-friendly countries in 2023

#7. Bermuda was one of the first countries to make it possible to pay taxes with cryptocurrency. Crypto itself and transactions involving it are free from income, capital gains, withholding, and any other taxes.

Foreigners wishing to move to Bermuda in order to pay no taxes on their crypto assets may face one substantial drawback: the cost of living in this country is very high. As of mid‑2023, the country is ranked No.1 in the world per the cost of living index.

#8. The Cayman Islands have long been known for being a tax haven with no corporate taxes for businesses and no income or capital gains taxes for residents. The same tax laws apply to crypto, so the country can be a good choice for crypto investors.

One of the main disadvantages is the very high cost of living: the country is ranked 3rd in the Global Cost of Living Index. This is mainly due to high import duties of around 25% that are imposed on all the imported goods.

#9. The British Virgin Islands is known as a leading offshore finance centre featuring an agile and innovative approach to regulatory changes. Currently, the country is tax-friendly to businesses and individuals working with cryptocurrencies. The income tax is set to 0%, so owning and trading crypto is tax-free.

Mining activities still need to be officially regulated, which means that they are not taxed. However, electricity costs in the British Virgin Islands are quite high, so it might not be challenging to mine cryptocurrency there.

Best countries for crypto taxes in 2023

#10. Hong Kong is another crypto-friendly area for individual investors. During the last several years, Hong Kong’s regulation authorities have been working on a harmonised regulatory framework that would help the territory become a regional crypto hub.

Currently, long-term individual investments are considered capital that is exempted from a capital gains tax. However, if a person receives a salary in crypto, they should pay the same income tax as if it were a regular remuneration.

Businesses and crypto professionals trading cryptocurrency on a regular basis are obliged to pay an income tax.

#11. Singapore is a very crypto-friendly country for individual investors. There is no capital gains tax, so any profit you gain from selling or trading crypto is not taxed. Additionally, crypto is considered to be an intangible asset: when you pay for goods or services in crypto, this is regarded as a barter deal rather than a sale.

As for companies, the legislation could be more friendly. Businesses do not pay capital gains tax, but they have to pay an income tax if they accept crypto for goods and services or if their main activity is crypto trading. In this case, the tax rate is 17%.

#12. Malaysia is tax-friendly for individual crypto investors: there is no capital gains tax, so you will not be taxed for any profit from selling crypto. However, if you trade crypto on a regular basis or if such trading is your main source of income, you will not qualify for this exemption and will be obliged to pay income tax.

Businesses also pay income taxes for any profits generated from crypto.

Crypto tax haven countries 2023

#13. El Salvador is the first-ever country to accept Bitcoin as a legal tender. In other words, in this country, you can legally use crypto to pay for goods and services you buy. The government did this to attract investments into the country’s economy.

There is also no crypto tax, and foreigners who move to the country are exempted from paying capital gains taxes on their Bitcoin earnings.

#14. Puerto Rico, a US territory with its own tax policy, offers more favourable conditions for crypto holders than many other countries, particularly the US. Residents of the territory pay much lower income tax compared to the US Federal Income Tax rate.

Crypto investors who acquired cryptocurrency inside Puerto Rico while being its residents pay no capital gains tax on any profit earned from this crypto. Any crypto bought outside Puerto Rico is to be taxed according to the legislation of the country of purchase.

#15. Gibraltar has a positive policy regarding cryptocurrency. It was the first country to introduce comprehensive and clear regulations for cryptocurrency businesses. Individual crypto investors are not subject to any capital gains, value-added, or withholding taxes.

However, for businesses, the country is partially crypto-tax-free. Companies that deal with crypto have to pay a 12,5% corporate tax on all profits that are accrued in or derived from Gibraltar, which is significantly lower than in many other countries.

Tax-free crypto countries 2023

5 worst countries for crypto taxes

While some countries create a friendly environment for crypto investments, others choose to restrict crypto flows and impose high taxes on crypto holders.

The Netherlands. Crypto holders are obliged to pay tax for crypto regardless of whether it was sold in the Netherlands or not. This means that even when you hold crypto, you have to pay taxes for gains you might have received if you had sold your assets. Additionally, crypto activities such as staking and mining are considered income and subject to an income tax.

India. In this country, crypto investors have to pay a 30% flat tax for all cryptocurrency incomes and capital gains. No discount for long-term gains and no tax benefits for cryptocurrency capital losses are applied.

France. In general, the French government supports blockchain-based technologies, but conditions for investors are not favourable.

Applied taxes depend on the investor’s applicable tax statute. Individual investors are taxed at a flat rate of 30%. In contrast, professional investors are subject to the progressive tax scale: the total rate of income tax and social security contributions can reach 60%.

Spain. The country is cautious and conservative regarding crypto. As of January 1st, 2024, crypto investors will be obliged to report their possession of cryptocurrencies as well as operations carried out with their use. Reports should cover balances in virtual currencies, transactions with those, and virtual currencies located abroad.

As for taxation, investors pay up to 47% of tax on cryptocurrency income and can use only 25% of capital losses to offset capital gains.

Japan. The country considers profits from selling crypto as “miscellaneous income, ” which is taxed at a progressive rate from 5% to 45%. Additionally, you will have to pay 10% of your income to the local government as an inhabitant tax. There is also an inheritance tax that is imposed upon the assets of a deceased person, including their crypto assets.

Summary of the best tax-free crypto countries

  1. The cryptocurrency market is actively developing, and governments are still working out their approaches to regulation of this new area.

  2. To attract foreign investments and to develop the digital sphere, many countries apply 0% taxes on crypto incomes and crypto capital gains.

  3. The list of the most crypto-friendly countries includes Portugal, Malta, the United Arab Emirates, Germany, El Salvador, Georgia, Switzerland, and others.

  4. Such countries as the Netherlands, France, Spain, and India do not welcome active crypto development and impose high taxes on crypto investors.

  5. To enjoy tax benefits provided by crypto-friendly countries, a person should move to the chosen country and become a tax resident there. For a more smooth and quicker relocation, one can participate in a government programme for investors, for example, obtain a Portugal residence permit by investment, get the UAE Golden Visa, or become a citizen of Malta by naturalisation for exceptional services by direct investment.

Immigrant Invest is a licensed agent for citizenship and residence by investment programs in the EU, the Caribbean, Asia, and the Middle East. Take advantage of our global 15-year expertise — schedule a meeting with our investment programs experts.

Frequently Asked Questions

  • Which country has no crypto tax?

    Several countries do not tax cryptocurrency. The list includes Portugal, Malta, the United Arab Emirates, Germany, El Salvador, Georgia, Singapore, Hong Kong, and others.

  • How do I legally avoid crypto tax?

    To optimise taxes on your crypto income, you should become a tax resident of one of the crypto-friendly countries.

    To the most efficient tax optimisation, explore tax exemption conditions in different countries and choose one that is best for you.

  • Is Dubai crypto tax-free?

    Yes, Dubai is crypto-free. Individual investors in the UAE do not pay income or capital gains tax on their crypto.

  • Which country is best for crypto tax?

    The list of the most crypto-friendly countries includes Portugal, Malta, the United Arab Emirates, Germany, El Salvador, Georgia, Singapore, Hong Kong, and others.

    The best country for crypto tax depends on how you handle your crypto. Some countries, such as Belarus, impose no taxes on any crypto incomes and capital gains. In contrast, in other countries like Malta, individual investors are exempted from taxes, but professional investors and miners are required to pay an income tax.

  • Is Portugal crypto-tax-free?

    In Portugal, no tax is applied to crypto to crypto sales and NFTs as well as to long-term crypto investments. If you hold crypto for less than a year before selling it, you will have to pay a 28% capital gains tax.

  • Is Japan crypto-friendly?

    No, since Japan is currently one of the least crypto-friendly countries. According to Japanese legislation, crypto investors have to pay up to 45% as a capital gains tax plus 10% as an inhabitant tax.

  • Which European country is most crypto?

    Malta is one of the best countries for crypto in Europe. It was nicknamed “a blockchain island” and headquarters some popular crypto exchanges such as Binance.

    Long-term individual investments are not taxed, and professional crypto traders have an opportunity to reduce their crypto income tax to 0—5%.

  • Is France crypto-friendly?

    In France, tax conditions for crypto investors are not very favourable. Individual investors have to pay 30% income tax. Professional investors are taxed at a progressive rate, which, along with social security contributions, can reach 60%.