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  • Writer's pictureCarolina Pérez

Crypto Taxation

As a bitcoin trader or Hodler, there are things you must know besides what to do on a bull run or how to store your crypto. A crucial thing people tend to forget is taxes. Yes, taxes, the one thing that everyone hates. Unfortunately, crypto does not 100% escape taxes. Once you sell your crypto and profit from it, there is a good chance depending on what country you reside in; you must declare your earnings, thus pay taxes to the government.

Many forget this and then deal with the nightmare of paying and declaring.

Although there are many countries where you must pay, some recognize crypto but yet to declare taxation upon them.

These are some countries where citizens don't pay taxes.


Bitcoin transactions are exempt from VAT, and if you hold crypto for more than one year, you are exempt from capital gains too. Any EU citizen can move there and benefit.


Businesses and individuals who hold crypto for long term investment do not face capital gains tax.


Crypto is exempt from VAT and personal income tax, although businesses need to pay tax on profits from crypto trading.


Day trading crypto is taxed as business income, but buying and holding by retail investors is not taxed.


Doesn’t have a capital gains tax.


Crypto mining and investment is not taxed.


Professional crypto trading is subject to business tax, mining is treated as self-employment income but individuals who invest and trade are exempted from capital gains tax.

Examples of countries with crypto taxation:


According to the IRS, crypto is classified as property and taxed in the same way that stocks are. If you buy it and hold for more than a year, you’ll pay between 0-20% depending on your income tax level.


Like many countries, Australia sees every trade as a capital gains event, requiring precision record keeping and ongoing conversion at the time of a trade into Australian dollars.

Profits are taxed it at the same rate an individual pays income tax – with a 50% discount to this rate if the cryptocurrency is held longer than a year.

Many countries weren't taxing crypto investments because there was a lack of understanding or because it was still under the radar. Nonetheless, crypto has gained a spot in the financial market, and its bull runs have had everyone's eyes set on the digital currencies.

In Chile, for example, we have a crypto law that is effective since last year.

Here is how it works in Chile:

“…the profits obtained from the purchase and sale of cryptocurrencies are subject to eventual tax payments, and it is the responsibility of each user to declare and pay them, if applicable.”

“However, the eventual payment of taxes will depend on other factors, such as the total income declared by you during the year, so we recommend that you consult with a tax advisor so that you have complete clarity on this matter.”

“Regarding your particular tax situation, you should first check if, with the eventual profits obtained from the disposal (purchase and sale) of cryptocurrencies; plus the other income you have obtained during the year (either as a dependent or independent worker), you exceed by total the 13.5 Annual Tax Units (approximately $ 7,960,000 during the year). Under this amount, you should not pay taxes on that profit because you are in the exempt section of the complementary global tax established by law.”

Crypto is being introduced in different markets and is being used to purchase goods and services; recently, I found a site where you pay your telephone service. Why is this positive bedside’s you being able to pay with crypto? More options where you can use crypto means you don't need to sell and transform your crypto to fiat cash.

It is essential to keep up today on new laws and regulations if you are investing in crypto. This will save you a headache if you leave it to the last minute, where you might run into some unpleasant surprises.

By: Carolina Pérez

Twitter: @carolinanianap

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