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How is Crypto Taxed Around The World?

Last updated: Friday, 1 October 2021

Crypto investor? Wondering how Crypto is taxed in your country? Join us on a trip around the world as we explore crypto taxes for individuals in the US, UK, Australia, Canada, Germany and Ireland.

United States

Cryptocurrency is viewed as property and is taxed in the United States as either Capital Gains Tax or Income Tax. You won't pay tax when you buy crypto, hold crypto, or move your crypto between wallets. Gifting crypto is tax-free, provided that your crypto gift does not exceed $15,000 in value. For gifts over this threshold, donors may have to file a Gift Tax Return Form 709. Similarly, donations are not subject to Capital Gains Tax, provided the donation is made to a qualified charitable organization. If the donation is more than $500, donors may need to submit Form 8283 signed by their chosen recipient.

How much will you pay?

In the United States, the amount of tax you pay on crypto gains depends on how long you’ve held your assets for, and your personal Federal Capital Gains Tax rate, and personal Income Tax bracket you're in. 

  • Allowances: If your income is under $40,000 a year, you'll pay no Capital Gains Tax. For married couples filing jointly, the limit is $80,000 a year. For the head of household, this limit is $53,600 a year.
  • Short-term capital gains: Any gain made from a crypto asset held less than a year is taxed at the same rate as you Federal Income Tax bracket. You could pay between 10% to 37% tax.
  • Long-term capital gains: Any gains or losses made from a crypto asset held for longer than a year incurs a much lower 0%, 15% or 20% tax depending on individual or combined marital income.
  • Losses: If your capital losses exceed your capital gains, the amount of the excess loss that you can claim to lower your income is the lesser of $3,000 ($1,500 if married filing separately) or your total net loss shown on line 21 of Schedule D (Form 1040). If your net capital loss is more than this limit, you can carry the loss forward to later years.

Cost basis

The default cost basis method used in the States in FIFO, however Speculative Identification can also be used along with LIFO and HIFO.

Capital Gains Tax

  • Profits from selling crypto for fiat.
  • Profits from swapping crypto with crypto.
  • Using cryptocurrency to purchase goods and services.

Income Tax

Cryptocurrency transactions that are classified as income are taxed at your regular Income Tax bracket. Some of these transactions may also be subject to Capital Gains Tax upon disposal. Income can come from:

  • Getting paid in crypto - like a salary.
  • Staking rewards and liquidity pools - like dividends.
  • Forks - excluding soft forks when no new coin is received.
  • Mining tokens - like income.
  • Airdrops - like bonuses.
  • DeFi interest - like bank account interest.
  • Referral bonus - like commission.

Stolen crypto

In the USA, crypto that is lost in scams, thefts, or hacks are complete tax losses. These losses can be claimed on form 8949 as $0 proceeds transactions. This means that if you bought one bitcoin for $35,000 and it was stolen through an exchange hack, you would be able to report a loss of $35,000.

How to report crypto tax in the USA

The IRS takes crypto tax very seriously and has stepped up its watch on undeclared profits. Crypto investors in the USA need to declare their profits, losses and income in their Individual Income Tax Return. Crypto can be declared to the IRS from 1 January 2022 to 15 April 2022.

How to report Capital Gains Tax

Fill in Form 8949 and add it to Form Schedule D: Form 8949 is the specific tax form for reporting crypto capital gains and losses. The Schedule D form is the main tax form for reporting overall capital gains and losses.

How to report Income Tax

Fill in Schedule 1 Form 1040: Any crypto earned as an income needs to be added to Schedule 1 Form 1040.

Want to know more about how the US taxes individual cryptocurrency investors? Koinly's USA Crypto Tax Guide covers it all. Check it out here.

Australia

In Australia, cryptocurrency is viewed a property and is taxed as either Capital Gains Tax or Income Tax. You won't pay tax when you buy crypto, hold crypto, or move it between wallets. Donations may also be tax-free provided the recipient is a deductible gift recipient.

How much will you pay?

In Australia, the amount of capital gains tax owed on crypto depends on how long you’ve held your assets and in which Income Tax bracket you are. 

  • Allowances: There are no specific allowances for Capital Gains Tax in Australia. However, if your total income is less than $18,200 a year, you won't pay any Income or Capital Gains Tax.
  • Short-term capital gains: Any gains or losses made from a crypto asset held less than a year are taxed at the same rate as whatever Income Tax bracket you’re in.
  • Long-term capital gains: Any gains from a crypto asset held for longer than a year receives a 50% Capital Gains Tax discount.
  • Losses: Losses can be carried forward and deducted from capital gains in later years.
    There is no time limit on how long you can carry forward a net capital loss.

Cost basis

The default cost basis method used in Australian in FIFO, however LIFO can also be used.

Capital Gains Tax

Income Tax

Cryptocurrency transactions that are classified as income are taxed at your regular Income Tax bracket rate. Income can come from:

  • Getting paid in crypto - like a salary.
  • Staking rewards and liquidity pools - like dividends.
  • Mining tokens - like income, only at trader level. Hobby miners do not pay income tax.
  • Airdrops - like bonuses.
  • DeFi interest - like bank account interest.
  • Referral bonus - like commission.

Stolen Crypto

In Australia, crypto that is lost in scams, thefts, or hacks might be claimable a capital loss. To claim a capital loss, the ATO will require evidence. See here.

How to report crypto tax in Australia

The ATO has gotten very serious about crypto tax of late, with numerous letters, press releases and measures taken to communicate their position. Crypto investors in Australia need to declare their profits, losses and income in their Individual Tax Return form. You can file from the 1st of July and the deadline is the 31st of October 2022.

How to report Capital Gains and Income Tax

File a Tax Return for Individuals Form: Capital Gains Tax and Income Tax are both reported under the same Individual Tax Return Form. You can do this online with MyTax. You can also watch our how to guide on filing your Australian crypto taxes here.

United Kingdom

Like most countries around the world, the UK does not treat cryptocurrency as currency or money. Instead, the HMRC views cryptocurrency as property and is taxed as either Capital Gains Tax or Income Tax. You won't pay tax when you buy crypto, hold crypto, or move it between wallets. Cryptocurrency gifts to your spouse are also non-taxed and can effectively allow you to double your tax-free allowance in a given tax year. Donations to registered charity are also tax-free.

How much will you pay?

In the United Kingdom, the amount of capital gains tax owed on crypto depends on how long you’ve held your assets and on Income Tax rate.  

  • Allowances: UK residents are allowed an allowance of capital gains that are non-taxed for individuals up to £12,000 in capital gains across all capital assets. (Annual Exempt Amount.) In addition, the standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.
  • Short-term capital gains: Your CGT tax rate will depend on your Income Tax band. The basic Capital Gains Tax rate for those earning less than £50,270 is 10%, while the higher rate for those earning more than £50,271 is 20%.
  • Long-term capital gains: Your long-term capital gains are taxed at the same rate as short-term.
  • Losses: The time limit for claiming capital losses is within four years of the end of the tax year in which the capital loss was realised.

Cost basis

To avoid investors selling assets at a loss and repurchasing them shortly after to reduce tax liability, the HRMC requires share pool accounting when calculating the cost basis of a coin disposal. These can be broken down into three simple rules:

  • Same Day Rule: coins acquired on the same day as the disposal are consumed first.
  • Bed and Breakfasting Rule: coins acquired in the 30 days following the day of disposal (provided the person making the disposal was resident in the UK at the time of the acquisition).
  • Section 104 Pool: all previous coins purchased, price averaged.

You can work through these rules one by one, as they apply to your assets.

The same day rule applies if you bought and sold an asset on the same day. If this is the case, the cost basis of your disposed asset is calculated as the average cost of the asset that day. If you sold more of the same crypto than you purchased on the same day, apply the 30 day rule.

The 30 day rule applies when you bought back the same asset you sold in less than 30 days. The cost basis method for the 30 day rule is FIFO. As above, if you sold more of the same asset than you bought within this time frame, use the section 104 rule.

The section 104 Pool rule applies to all other assets and is similar to the Average Cost Basis method. To start, investors should "pool" all their different assets. So for example, you would have a separate Bitcoin and Ether pool. To find the cost basis of each pool of disposed assets, multiply the average cost with the number of assets sold.

Capital Gains Tax

Income Tax

Cryptocurrency transactions that are classified as income are taxed at your regular Income Tax bracket. Income can come from:

  • Getting paid in crypto - known as 'money's worth' and is subject to National Insurance too.
  • Staking rewards and liquidity pools - like dividends.
  • Mining tokens - like income, only at trader level. Hobby miners do not pay income tax.
  • Airdrops - like a bonus in most instances.
  • DeFi interest - like bank account interest.
  • Referral bonus - like commission.

Stolen crypto

If you have no prospect of recovery and can prove this, a negligible value claim could be made with the HMRC. If you become a victim of a crypto scam, HMRC does not consider that to be a disposal event. This means victims of theft cannot claim a loss for Capital Gains Tax.

How to report crypto tax in UK

You need to report any gains from the previous year in your Self Assessment Tax Return by the 31st of January 2022.

How to report Capital Gains and Income Tax

All taxable assets are included in the same Self Assessment Tax Return form in the UK.

Alternatively, if you'd rather report real time Capital Gains Tax, you can use the Government Gateway service. Once you've reported your gains, HMRC will contact you with payment options.

Canada

In Canada, cryptocurrency is viewed as a commodity by The Canada Revenue Agency and is taxed as either Capital Gains Tax or Income Tax. You won't pay tax when you buy crypto, hold crypto, or move it between wallets. Donations to registered charities are also tax free.

It's important to establish whether you are trading as an individual or as a business - the lines get blurry.

How much will you pay?

In Canada, the amount of capital gains tax owed on crypto depends on your personal Income Tax rate.  

  • Allowances: Only half of your capital gain is actually subject to tax.
  • Short-term gains: Any gains or losses made from a crypto asset are taxed at the same rate as the Income Tax bracket you’re in.
  • Long-term gains: Your long-term capital gains are taxed at the same rate as short-term.
  • Losses: Capital losses can be used to offset capital gains for the year. If you have more capital losses than capital gains, it can be carried forward to reduce your tax liability in the future. The same 50% rule that applies to capital gains also applies to losses. You can only write off 50% of the losses.

Cost basis

Canada's CRA requires the use of the Adjusted Cost Basis (ACB) method when calculating crypto gains.

The Superficial Loss Rule is a wash-sale rule that prevents Canadian taxpayers from taking advantage of wash-sale style capital losses.

Capital Gains Tax

  • Profits from selling crypto for fiat.
  • Profits from swapping crypto with crypto.
  • Using cryptocurrency to purchase goods and services.

Income Tax

Cryptocurrency transactions that are classified as income are taxed at your regular Income Tax bracket. Income can come from:

  • Getting paid in crypto - like a salary.
  • Staking rewards and liquidity pools - like dividends.
  • Mining tokens - like income, only at business level. Hobby miners do not pay income tax.
  • Airdrops - like bonuses.
  • DeFi interest - like bank account interest.
  • Referral bonus - like commission.

How to report crypto tax in Canada

Any cryptocurrency transactions subject Income Tax or Capital Gains Tax should be reported on your Income Tax Return T1 General or a Schedule 3 Form by the 30th April 2022.

How to report Capital Gains and Income Tax

Any cryptocurrency transactions subject to Capital Gains Tax can be reported in a Schedule 3 Form. Any cryptocurrency transactions subject to Income Tax should be included in your Income Tax Return T1. You can file your taxes online using the CRA's My Account.

Germany

Cryptocurrency is viewed as a private asset in Germany by Bundeszentralamt für Steuern (BZSt), which means it attracts an individual Income Tax, rather than a Capital Gains Tax. You won't pay tax when you buy crypto, hold crypto, or move your crypto between wallets.

How much will you pay?

In Germany, the amount of tax you pay depends on how long you’ve held your assets and your personal Income Tax rate and solidarity surcharge.

  • Allowances: Profits up to €600 per year are tax-free.
  • Short-term capital gains: Any gains or losses made from a crypto asset held less than a year are taxed at the same rate as your personal Income Tax rate.
  • Long-term capital gains: As a 'private asset' in Germany, crypto gains are completely tax-exempt after a holding period of one year. When it comes to cashing in on staked crypto, that tax-free holding period is a minimum of 10 years.
  • Losses: The German Tax Act allows investors to offset gains with past years’ losses and/or carry losses forward to offset gains in future tax years.

Cost basis

The default cost basis method used in Germany is FIFO.

Income Tax

Provided you're seen to be trading as an individual as opposed to as a business, you'll pay Income Tax on a variety of crypto transactions in Germany. Remember, you'll only pay tax at the point of disposal, if that disposal is made within 1 year of acquiring the asset. Income can come from:

  • Profits from selling crypto for fiat.
  • Profits from swapping crypto with crypto.
  • Using cryptocurrency to purchase goods and services.
  • Getting paid in crypto - other income.
  • Staking rewards and liquidity pools - other income.
  • Mining tokens - other income.
  • Airdrops - other income.
  • DeFi interest - other income.
  • Referral bonus - other income.

How to report crypto tax in Germany

The BZSt wants to know about your crypto activity in terms of income and profits made from crypto trades, swaps and sales. You'll need to declare this in your annual tax return (Einkommensteuererklärung) between January 1 and July 31.

How to report Income Tax

Fill in Hauptformular and Anlage SO: To file your German cryptocurrency tax, you'll need 2 forms, one for general income, Hauptformular ESt 1 A, and one for your crypto income, Anlage SO.

Ireland

Cryptocurrency is viewed as property and is taxed in Ireland as either Capital Gains Tax or Income Tax. You won't pay tax when you buy crypto, hold crypto, or move your crypto between wallets. Gifting crypto in Ireland is subject to Capital Acquisitions Tax at 33%.

How much will you pay?

  • Allowances: As per Ireland's Capital Gains Tax rules, an annual exemption of €1,270 applies.
  • Short-term gains: Any gains are taxed at a 33% Capital Gains Tax rate.
  • Long-term gains: Long-term gains are taxed at the same rate as short-term.
  • Losses: If you make a loss when you dispose of an asset, this may be classified as an allowable loss if you made a gain on the same transaction. You can deduct allowable losses from any chargeable gains made in the same tax year. You can also carry forward losses to use against future gains.

Cost Basis

The default cost basis method used in Ireland in FIFO. An exception to the FIFO rule is where shares are sold within four weeks of purchase. In this case, the shares sold are deemed to be the most recently acquired shares, even though there may be an older holding of the same class of shares.

Capital Gains Tax

  • Profits from selling crypto for fiat.
  • Profits from swapping crypto with crypto.
  • Using cryptocurrency to purchase goods and services.
  • Capital Acquisitions Tax on any gifts.

Income Tax

Cryptocurrency transactions that are classified as income are taxed at your regular Income Tax bracket. Income can come from:

  • Getting paid in crypto - like a salary.
  • Staking rewards and liquidity pools - like dividends.
  • Mining tokens - like income.
  • Airdrops - like bonuses.
  • DeFi interest - like bank account interest.
  • Referral bonus - like commission.

How to report crypto tax in Ireland

Ireland Revenue wants to know about your crypto activity in terms of income and capital gains in your annual Income Tax Return, as well as a Form 12 or Form CG1 for Capital Gains Tax. The deadline is the 31st of October 2022.

How to report Income and Capital Gains Tax

You can report both Capital Gains Tax and Income Tax online using the Revenue Online Service. If you need to register, you'll need your tax registration number.

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