Why Countries Germany, Switzerland and Malta All Have Crypto-Friendly Tax Laws
Every country has its own cryptocurrency laws and some are certainly friendlier than others.
Though there are many different laws, those dealing with tax are often of the greatest concern due to the implications they can have on one’s investment. Here are a few countries with friendly cryptocurrency tax laws:
German Federal Government representatives do not view cryptocurrency as a threat to financial stability, according to a report by Cointelegraph auf Deutsch. Even then, the government does find it to be important to monitor cryptocurrency development. The country considers cryptocurrency to be private money, similar to foreign currency. As a result, when it is sold in a private sale under 23 EStG rules, there are tax-free benefits.
Further, the government does not tax cryptocurrency when it is used as a form of payment. In a European Court decision from 2015, the court held:
“So-called virtual currencies (cryptocurrencies such as Bitcoin) are considered equal to the legal means of payment, as long as these so-called virtual currencies have been accepted as alternative and contractual means of payment by the parties involved in the transaction and have no other purpose than being used as a means of payment.”
This Southern European island has been designed as friendly to cryptocurrency when it comes to taxes. Joseph Muscat, the country’s prime minister, has also been seen as heading the way as making his country a go-to choice for cryptocurrency and blockchain fintech companies.
Malta is a member of the EU Blockchain partnership, which ahs three new bills that were adopted by the Maltese government and they feature cryptocurrency-friendly tax policies.
One of the bills enables the country’s Financial Services Authority to publish cryptocurrency rules and to enforce them. The bills include the Malta Digital Innovation Authority Bill, the Innovative Technology Arrangements Bill, and the Services and Virtual Financial Assets Bill.
Further, cryptocurrencies are currently unregulated in the country, which makes it much easier for those who invest in cryptocurrency.
Switzerland treats cryptocurrencies as cash or moveable assets, and as a result, they must be listed in Schedule of Securities and Assets on a Swiss tax return. However, they are not taxed as a capital gains tax and as a result, the country is perceived to be a friendly jurisdiction for cryptocurrencies.
Moreover, when it comes to trading, cryptocurrencies are not guided by any sort of regulations. But, they are subject to securities regulation, anti-money laundering rules, and taxes. Overall though, the country has a progressive approach toward cryptocurrencies and blockchain technology.
These are the three prime countries that cryptocurrency enthusiasts seem to flock to due to the friendly approach to cryptocurrencies that they exhibit.