A new study by trading platform Atmos has provided an in-depth look at global crypto tax policies, identifying the countries with the highest taxation rates on cryptocurrency gains. The research reveals that Iceland stands at the top of the list, followed by Belgium and Ireland, with many European nations dominating the high-tax rankings. With over 420 million crypto holders worldwide, governments are looking at significant tax revenue opportunities. However, excessive taxation could push investors towards more favourable jurisdictions.
The cryptocurrency landscape is rapidly growing, with an estimated 420 million individuals now holding digital assets across the globe. As cryptocurrency adoption expands, governments are keen to tap into this burgeoning sector through taxes. However, the tax burden varies significantly from country to country.
A new report by trading platform Atmos sheds light on the most taxing countries for cryptocurrency investors, revealing that European nations, particularly Iceland, dominate the top ranks for the highest crypto tax rates. With over $1.2 trillion in potential tax revenues globally, the research highlights how governments are capitalising on this growing market.
At the same time, the study suggests that overly aggressive tax policies might push crypto investors and businesses to seek more tax-friendly jurisdictions. Nick Cooke, CEO of Atmos, explains, “The cryptocurrency tax race mirrors what happened with corporate tax havens decades ago: capital flows to the most favourable jurisdictions.”
As countries continue to adjust their tax rates, they will have to find a balance between collecting revenue and maintaining an environment conducive to innovation and investment.
The global landscape of crypto taxation
The study analysed the tax policies in 48 countries to determine how much investors pay in taxes when they make a $15,000 profit from cryptocurrency trading. Countries were ranked from highest to lowest based on the tax amount deducted from this standard profit.
The research found that Iceland imposes the highest tax rate globally, with a staggering 46% tax on cryptocurrency capital gains. This means that Icelandic crypto owners would be taxed $6,900 from every $15,000 capital gain, leaving them with just $8,100 in profits.
Iceland’s progressive tax system applies a 40% rate on gains up to $7,000 and 46% on amounts exceeding this threshold. This high tax rate, coupled with a low crypto adoption rate of just 0.97%, may deter many potential investors from entering the crypto market.
Belgium and Ireland: Complex systems with high tax rates
Belgium and Ireland both follow closely behind Iceland in terms of high tax rates. In Belgium, the tax on cryptocurrency gains ranges from 0% to 50%, depending on the classification of the investor’s activities. However, typical Belgian crypto owners face a tax charge of $4,950 on every $15,000 capital gain. This tax rate leaves them with a net profit of $10,050, after taxes. Belgium reports a 1.44% crypto ownership rate, equating to approximately 168,000 crypto holders.
Similarly, Ireland applies a flat 33% tax rate on cryptocurrency profits, resulting in $4,950 in taxes for every $15,000 gain, allowing Irish crypto owners to keep $10,050 in profits. With just 1.1% of the population owning cryptocurrency, Ireland also faces low crypto adoption compared to other countries.
The Netherlands and Finland: Moderate tax rates and growing crypto adoption
The Netherlands ranks fourth on the list with a 31% tax rate on crypto gains. Investors here are taxed $4,650 from every $15,000 capital gain, leaving them with $10,350 in profits. The country enjoys a higher rate of crypto adoption, with 2.78% of the population owning digital assets, amounting to nearly half a million crypto investors.
Finland takes the fifth spot with a 30% tax rate on cryptocurrency profits up to $30,000. Finnish crypto owners are taxed $4,500 on a $15,000 capital gain, walking away with $10,500 in profits. Approximately 1.39% of Finland’s population, or about 77,000 people, own cryptocurrency.
France and India: Equal tax rates, different crypto adoption levels
France and India both impose a 30% flat tax on cryptocurrency gains. This results in $4,500 in taxes on every $15,000 profit, with investors in both countries left with $10,500. However, the two nations differ dramatically in terms of crypto adoption. France sees a relatively modest 4.72% ownership rate, with over 3 million people holding crypto. In contrast, India stands out with a significantly larger crypto user base, comprising 6.55% of the population—more than 93.5 million individuals.
India’s large crypto market presents a substantial revenue opportunity for the government, which stands to gain considerable tax revenue from its growing digital asset sector. As one of the largest crypto markets by user base, India has the potential to collect the highest crypto tax revenue globally.
Sweden, Portugal, and Austria: More affordable, but still significant taxes
Sweden, Portugal, and Austria follow with similar tax rates on cryptocurrency gains. Sweden charges a 30% tax, resulting in a $4,500 tax on every $15,000 profit. About 1.6% of the Swedish population, or 170,000 individuals, hold crypto.
Portugal applies a slightly lower 28% tax rate, meaning investors pay $4,200 on a $15,000 gain, leaving them with $10,800 in profits. The country has a crypto ownership rate of 2.7%, with around 276,000 people holding digital assets.
Finally, Austria rounds out the top ten with a tax rate of 27.5%, requiring investors to pay $4,125 on a $15,000 capital gain, resulting in $10,875 in profits. Crypto ownership in Austria stands at 1.34%, with approximately 120,000 holders.
Global implications and future outlook
The study by Atmos highlights the growing importance of cryptocurrency in the global financial landscape and the increasing interest of governments in tapping into this market through taxes. However, it also suggests that excessive taxation could drive investors and businesses to jurisdictions with more favourable tax policies. As Nick Cooke, CEO of Atmos, notes, “Governments need to recognise that crypto assets are highly mobile, and excessive taxation simply pushes wealth and innovation to more welcoming countries.”
As countries continue to adjust their tax rates to capture a piece of the cryptocurrency revenue pie, the global crypto community will likely keep a close eye on the shifting dynamics of tax policies. While high taxes in some nations may limit crypto adoption, others may find success by offering a balanced tax environment that encourages growth while ensuring fair taxation.
Shikha Negi is a Content Writer at ztudium with expertise in writing and proofreading content. Having created more than 500 articles encompassing a diverse range of educational topics, from breaking news to in-depth analysis and long-form content, Shikha has a deep understanding of emerging trends in business, technology (including AI, blockchain, and the metaverse), and societal shifts, As the author at Sarvgyan News, Shikha has demonstrated expertise in crafting engaging and informative content tailored for various audiences, including students, educators, and professionals.
