Which countries have the best crypto tax laws?

“Europe is a huge hub for cryptocurrencies because of its strict regulatory approach that has allowed the industry to thrive,” said Coincub CEO Sergiu Hamza.

Image: KKSSR/Shutterstock

An in-depth report analyzing international tax jurisdictions around the world released yesterday by Coincub reveals that Europe has successfully established itself as a global cryptocurrency hub.

The report provides detailed information on each country's digital asset tax regime, and ranks countries and identifies trends.

Sergiu Hamza, CEO of Coincub, a startup that specializes in off-chain market data, said the company uses various data points from institutions such as Glassnode, PwC consultancy and the Tax Foundation for its research.

“The main trend that we see repeatedly is that Europe is a huge cryptocurrency hub because of its strict regulatory approach that allows the industry to thrive,” Hamza told reporters, noting that 11 of the top 20 countries are European. countries, including Monaco, Switzerland, Malta, and Hungary, among others.

While the UAE and Hong Kong get ample media coverage, it is Europe that is most likely to benefit the most from the current U.S.-led exodus of cryptocurrencies, according to Sergiu.

"There is definitely competition between countries to attract talent," he said, emphasizing his surprise at what Germany, Romania and Bulgaria are doing for the industry despite their lack of media exposure.

Hamza noted that “the Caribbean is moving forward,” according to him, “to some extent to be expected because of their historical financial experience.” The Coincub co-founder was also surprised to find that Poland or Countries like Spain are strong pillars of Web3.

A large section of the Coincub report is dedicated to the United States, breaking down individual tax rates by state and the federal regime that applies.

Countries around the world differ not only in tax rates, but also in digital-asset-friendly regulatory frameworks, the report said.

It lists countries like El Salvador or the Bahamas as highly crypto-positive countries with zero tax rates; Bulgaria and Hong Kong in the “crypto-positive” group with low taxes (19% or less); crypto-friendly countries like Brazil or Estonia The ratio is 20-29%.

Further down the list are some countries with higher tax rates (such as Switzerland or Canada), but they are “cryptocurrency advocates,” completing the report alongside countries with uncertain regimes or outright bans on cryptocurrencies (such as China).

Sergiu said that Coincub was born in 2021 out of "frustration of not being able to find good off-chain information." According to the CEO, the company's target market is Web3 business leaders, although many of their clients are major banks, venture capital firms, and major analysts such as Moody's.

Published annually, yesterday's report aims to gain macro-level insights into the Web3 space. Hamza announced that it will be included in the macro Web3 index, which will be released in the third quarter of this year, which includes cryptocurrency banking data, employment, VASP registrations, adoption numbers and more.