UAE and Switzerland lead as premier locations with no crypto tax, research finds

A recent research report produced by Coincub in collaboration with Blockpit provides valuable insights into how the varying tax policies implemented across different countries—from the absence of taxes in the United Arab Emirates to the significantly high tax rates found in the United States—have a substantial impact on the investment strategies adopted by cryptocurrency investors.

The study highlights that the global landscape of crypto taxation is characterized by considerable diversity, as indicated by the findings from Blockpit and Coincub. Notably, the UAE emerges as an exceptionally attractive destination for those involved in cryptocurrency investments, as it imposes no personal income tax or capital gains tax on profits derived from cryptocurrency transactions for individual investors. Similarly, Switzerland is recognized as a favorable tax haven, offering the same advantageous conditions by not taxing personal income or capital gains associated with cryptocurrency investments.

In contrast, the situation in Europe presents a more varied and complex picture. While certain countries provide advantageous tax conditions that favor long-term cryptocurrency holdings, there are others that maintain considerably high tax rates, which can be quite burdensome for investors. For example, Denmark stands out with one of the highest personal crypto tax rates globally, imposing taxes of up to 53% on both long-term and short-term capital gains that are generated from cryptocurrency investments, as assessed by local regulatory authorities.

The report highlights that, on average, numerous European nations impose relatively high taxes on cryptocurrency gains; however, the continent also offers the most tax incentives for individuals who hold their Bitcoin for the long term.

In contrast, the United States stands out with the highest overall gains and average tax rates, which are estimated at 17.5% for long-term holdings and 23.5% for short-term holdings. Analysts project that these tax rates could generate approximately $1.87 billion in revenue. However, they caution that such high taxation might deter investment, leading to a potential underground market for cryptocurrency activities or compelling investors to move to more tax-friendly jurisdictions.

“Nations like Vietnam, Turkey, and Argentina might prioritize attracting crypto investment, fostering technological innovation, and providing alternatives to unstable local currencies over immediate tax collection.”

Blockpit

Analysts predict that the global landscape of crypto taxation is poised for substantial transformations beginning in 2025, largely influenced by international initiatives like the Crypto-Asset Reporting Framework (CARF) and the Tax Administration for the Reporting of Crypto-Asset Activities (TARKA).

CARF, developed by the Organization for Economic Co-operation and Development, aims to improve tax transparency and address tax evasion by establishing a comprehensive global framework for reporting cryptocurrency transactions. Concurrently, TARKA is intended to foster collaboration among tax authorities across the 48 participating countries, as outlined in the report.