Cryptocurrency taxes or How much you will pay the government for a Bitcoin?

Ted Capwell

The issue of the taxation of cryptocurrencies is discussed for a long time. But the thing is, what actually cryptocurrency tax must be taken? Let’s look at examples of countries where actively trading cryptocurrency.

Taxes on investing in cryptocurrency (bitcoin, Ethereum, Litecoin, Ripple )


In America, bitcoin is considered as property, because the profit is generated from capital gains and not from differences in exchange rates. The rules of taxation government was installed in 2014. Since 1th of January 2018, according to the law on tax reform, which was signed by the President of the United States Donald trump, every operation with cryptocurrency becomes a subject of taxation. Owners of digital coins needed to pay taxes to notify the IRS (Internal Revenue Service) on current transactions with cryptocurrency.

If you are a miner, then you have to pay tax on gross income for а year, of course, if it was. And those who receive cryptocurrency for goods/services are required to include the cost of cryptocurrency into the declaration, taking into account the exchange rate on the day of its receiption. Even exchanging one cryptocurrency for another, the owner will be taxed during surgery. Moreover, coins are subject to income tax in the range of 10%-37%, depending on income level. And all those who owns a crypt for more than one year, must pay long-term tax on capital gains at 24%.


In Canada, payment for cryptocurrency goods and services will be considered a barter transaction and will be taxed accordingly. Cryptocurrency in this country is essentially equal to the product, from which the owner of the crypto currency will pay a tax on capital gains or on income entirely. Here everything will depend on how this profit was formed. Even wages in bitcoin will be taxed. Income tax will be paid also for commercial mining (but as far as the commercial purposes of miners are concerned, it will be subject to clarification on a case-by-case basis).


Singapore was the first who began to resolve issues with taxation of cryptocurrency. As a result, in 2014, according to IRAS tax office of Singapore, profit from the sale of crypto – coin is not taxed, since cryptocurrency is a digital asset and is included in the investment portfolio, where profit is capital gains. But, if cryptocurrency trading is considered a core activity, then profits will be subject to corporate tax. To dealers the tax applies to goods/services, making the coins not recognized as money, and services. It is important to know the fact that transactions through cryptocurrency exchanges are not subject to taxation. In taxation of cryptocurrencies, all nuances will be taken into account. For example, what goods are paid (real or virtual), who trades in the crypto (directly trader or broker), etc.


For today, this country has not yet developed specific rules on taxation of cryptocurrency traders. Everything is quite simple, the market Chinese traders pay income tax, income tax and capital gains. In addition, the sale of coins may be subject to VAT (value added tax). A small note: China is taking measures to gradually ban mining in the country due to the consumption of too much electricity and the speculative nature of the virtual currency.


Since April 1 2017, the government of Japan has officially recognized the cryptocurrency as a legal tender and a full-fledged currency. The goal was to make cryptocurrency trading cryptocurrency unhindered, thereby providing traders with easy access to it without such external factors as taxes. After all, earlier taxes were levied on income for cryptocurrency, namely: sales tax – 8%, profit tax and income tax.


The European Union (EU) considers cryptocurrency not as property, but as a currency. From what the owners will be subject to income tax and tax on capital gains, but not a tax on the additional cost. But we must not forget the fact that in different countries of the EU and taxation is different.

For example, Germany, like а Finland, imposes on cryptocurrency owners taxes on capital gains and “wealth”. The UK, in turn, does not collect tax on additional value from miners and for the exchange of cryptocurrency for pounds sterling, but the sale of goods/services for the crypto currency will be taxed, and the state collects corporate and income taxes, as well as capital gains tax.

Post-soviet Countries

The official status of the cryptocurrency and the procedure of its taxation are on the stage of determination in the post-soviet expanses.

Government of the Russian Federation and the Central Bank (CB) are working on the development of a regulatory legal act that will regulate the legal status of the cryptocurrency and the order of its circulation. Previously, the Federal financial monitoring service and the Central Bank often raises the question of the inclusion of cryptocurrency transactions classified as “doubtful,” citing the law “about counteraction to legalization (laundering) of incomes obtained in a criminal way and financing of terrorism”. As a result, already in October 2017, the Ministry of Finance, for tax purposes, proposed to introduce the registration of miners as individual entrepreneurs, as well as legal entities.So far, all this, in fact, at the stage of proposals and adjustments, and for implementation in practice, requires the introduction of a number of amendments in the budget and tax legislation of the country.

Ukraine collects the tax from physical persons who receive income in the form of cryptocurrency, whereas legal entities income tax. In General, there are no special tax rules.


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