How Different Countries Tax Cryptocurrency: Global Guide 2025

Cryptocurrency taxes are not same in every country. In some countries, digital assets are taxed heavily, while in other countries they are not taxed at all. Different governments see crypto in different ways. Some call it property, others see it as currency, and some treat it like an investment.

For example, in many countries, if you sell crypto and make a profit, you have to pay tax on those earnings. In some places, even spending crypto to buy things is counted as a taxable action. On the other hand, some countries have crypto-friendly rules with very low or no taxes. This really encourages investors as well as businesses to move there.

How Does Crypto Tax Work?

In many countries, digital assets are treated like property or an investment. This means if you sell or trade it for a profit, you may have to pay capital gains tax, just like with stocks. In many countries, the income you generate from activities like crypto staking, mining, or receiving digital assets as payment is considered taxable.

As it is mentioned above that the crypto tax rules are not same in every country. We will first look at some general rules and then explain how taxes work in different countries. This is only for learning purposes, so if you are not sure about your own tax situation, it is always better to seek advice from a licensed tax advisor where you live.

When Must You Pay Tax on Crypto?

When you trade or invest in cryptocurrency, there are certain situations where taxes usually apply:

Selling for Cash: If you sell Bitcoin or another coin and make a profit, that profit can be taxed.

Trading Coins: Swapping one cryptocurrency for another, like ETH for SOL, is often seen as a taxable action.

Using Crypto to Pay: Buying products or services with crypto is usually treated the same as selling it, which can trigger tax.

Earning in Crypto: If you get crypto through mining, staking, or as payment for work, most countries count it as income and tax it.

When you sell a cryptocurrency asset, the actual realized gain or loss is determined/calculated by comparing the selling price with the cost or fair value through profit or loss, also known as FVTPL, depending on how the cryptocurrency asset is classified in the books of accounts. There are several methods used to determine which fair value or cost basis should be applied, like FIFO, LIFO, HIFO, Fair Value, etc. To know how these methods affect your profit or loss calculation and reporting to tax authorities, refer to our detailed guide on Cryptocurrency Accounting Methods.

Cases in Which Crypto is Tax-Free

Buying and Keeping Crypto: If you purchase cryptocurrency and just hold it without selling, you normally won’t have to pay any tax. However, in the UAE if your business owns cryptocurrencies and you have opted for paying taxes on unrealized gains or losses, you may be subject to 9% corporate tax, subject to detailed review of your accounts.

Moving Crypto Between Your Own Wallets: Shifting your coins from one personal wallet to another is usually tax-free.

How Different Countries Handle their Crypto Taxes

United States

Under U.S. tax regulations, digital assets are defined as property rather than currency. This means you may have to pay capital gains tax when you sell, trade, or use it. The tax rate you pay depends on how long you kept the crypto before selling.

• Profits from crypto held less than a year: These are taxed the same way as your normal income, with rates ranging from 10% up to 37%.
• Profits from crypto held for more than a year: These are taxed at lower rates, usually 0%, 15%, or 20%, depending on how much you earn.

When you earn cryptocurrency, like from mining or staking, it counts as regular income and is taxed at your usual income tax rate. Beginning in 2025, crypto brokers will be required to report transaction details to the IRS using Form 1099-DA. This new step is part of the government’s effort to improve transparency and make tax reporting easier to track. [

If you lose money on crypto, you can use those losses to reduce your taxable gains. You can also deduct up to $3,000 each year from your regular income.

Canada

In Canada, cryptocurrency is treated like a commodity, and the taxes you pay depend on what you do with it:

When you sell or trade crypto, it is taxed as a capital gain. Only half of the profit you make is added to your taxable income.

When you earn crypto, such as through mining, staking, or business activities, it is counted as business income and taxed at regular federal rates (up to 33%) plus provincial tax.

If you lose money on crypto trades, you can use those losses to lower your taxable income in the years ahead.

United Kingdom

In the UK, cryptocurrency is treated as a property. Any profits are subject to capital gains tax, and the rate depends on your income level.

• Basic Rate Taxpayers: Pay 10% tax on profits that go over the annual allowance (£3,000 from 2024).
• Higher Rate Taxpayers: You will be charged 20% tax on profits, which means one-fifth of your earnings go to taxes.

When you get crypto from mining, staking, or as payment for work, it is treated as income and taxed like regular earnings. If you make losses, you can use them to lower the gains you owe tax on.

Australia

In Australia, the Tax Office (ATO) treats cryptocurrency as property, and you will pay capital gains tax when you sell or swap it.

• Short-Term Gains (held for under a year): Taxed as normal income, which can be up to 45%.
• Long-Term Gains (held for more than a year): You only pay tax on half the profit because of a 50% discount.

If your earnings are in crypto, it is taxed like your regular income. If you lose money, you can use those losses to lower the tax on future profits.

Japan

Japan has some of the highest crypto taxes worldwide. The government treats profits from crypto as miscellaneous income, which means:

• Crypto profits are taxed at rates between 15% and 55%, depending on your income level.
• Losses from crypto cannot be used to lower taxes on other kinds of income. They can only be applied against crypto gains, not your salary or business earnings.

Japan’s taxes on crypto can be tough for investors. However, the government is considering changes to make it better for people who hold cryptocurrency for long-term.

United Arab Emirates (UAE)

The UAE is considered as crypto heaven, because there is no personal income tax on profits from trading, investing, or mining. Moreover, non-residents also don’t have to pay tax on foreign crypto gains. While VAT rules now apply to miners, regular crypto holders are not affected.

For businesses, profits over AED 375,000 are taxed at 9%, though companies in certain free zones may qualify for a 0% rate if they meet certain requirements. Crypto activities are not automatically included, so each case must be checked thoroughly. In short, if a business owns crypto assets or runs a cryptocurrency business, their profits may be taxed at 9% whereas individuals who only hold or trade casually don’t pay any tax.

Cryptocurrency accounting is not much different from how you account for capital market assets. However, it is much more detailed with additional accounting considerations as compared to accounting for other capital market assets.

Vertix Auditing has years of experience handling complex accounting for digital assets and capital market assets, such as, cryptocurrencies, NFTs, stocks, bonds, derivatives, futures, etc. Read one of our recent case studies on cryptocurrency backlog accounting where our cryptocurrency accountants successfully completed a complex backlog accounting of our client’s cryptocurrency transactions from inception till 31 December 2024 to enable them to file their first UAE corporate tax return.   

Malta

In Malta, long-term profits from crypto are tax-free, but if you trade in the short term, those earnings are treated as income and taxed between 15% and 35% respectively. This approach encourages holding rather than frequent trading. Malta also has clear rules that make it a popular place for crypto companies and cryptocurrency business.

Cayman Islands

The Cayman Islands does not impose income, capital gains, or corporate taxes on cryptocurrency, which makes it highly attractive to investors. Over time, it has also become a popular place for crypto hedge funds as well as block chain startups. This tax-friendly environment is one of the main reasons global companies choose to base their operations there.

Portugal

Portugal used to have zero tax on crypto, but the rules changed on January 1, 2023. Now, crypto held for less than a year is taxed at 28%, while crypto kept for more than 12 months can still be tax-free. NFT trades and professional crypto activities are also taxable under new rules. Investors need to check the latest regulations, as taxes can differ based on residency and the type of transaction.

Germany

In Germany, crypto is not fully tax-free, but it has very friendly rules for long-term holders. If you keep your cryptocurrency for over a year, you don’t pay capital gains tax when you sell your position. If you sell within 12 months, you can still avoid tax if your total profit stays under €600. But if your gains go above that amount, the whole profit is taxed at normal income tax rates. This rule is especially important for active traders making many transactions on a regular basis.

The Future of Crypto Taxes

Governments are updating tax rules as crypto keeps growing. Some major changes include:

• Clearer Rules: More countries are defining how crypto is taxed.
• Tighter Reporting: Many exchanges now have to share user transaction details with tax offices.
• Global Standards: International rules may be introduced to control and stop tax evasion.

Since these rules keep changing, it is important to follow your country’s latest tax updates to avoid tax compliance issues.

To Conclude

Crypto tax rules are not the same in every country. In some countries, crypto gains are taxed heavily, while in others, they are completely tax-free. If you trade or invest, it is important to understand your local tax rules. Tracking your transactions and getting advice from a tax professional like Vertix Auditing can help you stay compliant and avoid penalties. We have an expert team to handle VAT as well as Corporate Tax applicable to cryptocurrencies. Contact us for any complex accounting and tax matter relating to cryptocurrencies in the UAE.