Taxation on Cryptocurrencies in EU – 28 countries overview

EU does not have a united opinion on a tax policy for cryptocurrencies yet. The only decision that has been made was in the end of 2015 when EU’s Court of Justice stated that  the exchange of traditional currencies for Bitcoin is an exempt from VAT.  The absence of EU guidelines led to different ways for crypto taxation among the countries and caused additional challenges to investors.

Austria does not tax cryptocurrencies for individuals if they are holding them for more than one-year. If realized during the “speculation period” then it it taxed as income at up to 50% rate (tax exemption of 440 EUR applies). The rule of one year does not apply if cryptocurrencies are being “rented out” to receive an interest. In this scenario it is an investment income and needs to be taxed at 27.5%.

Belgium tax capital gains at 33% if they are made outside the normal management of private estate, which they defined as speculation to buy/sell quickly, borrow to have leverage while investing large amounts. If investment in cryptocurrency is made by a business or profits are made from day trading then it is treated as income from business and standard income tax rates are applied (25-50%). The only exemption from being taxed can be made for individuals who prove that all the transactions were a normal management of private assets.

Bulgaria treats the capital gain from cryptocurrency the same as from any other financial asset. Individuals who pursued such gains should be taxed at 10% a year.

Croatia taxes cryptocurrency investors on realizing their profits at a rate of 12% a year or 18% if more than 500 000 USD per year.

Cyprus has not taxes on cryptocurrencies.

Czeck Republic implemented exact same income tax on selling goods for cryptocurrency as for fiat. Mining profit is taxed at 19%. The profit is equal to Income in CZK from selling crytocurrencies + Value of cryptocurrencies (indicated in CZK) – expenses in CZK (hardware, energy, administrative costs, utilities)

Denmark applies a basic tax law “Statsskatteloven” to crypto. Hence, if it was bought for an intention to sell later and receive profit then gains will be taxed as personal income.

Estonia treats cryptocurrency as a property and income tax is applied accordingly.  Each transaction is looked at separately as an object of taxation. Incomes from mining are taxed as business income. For wages income or business tax has to be applied.

Finland issued some instructions in 2013 where Finish Tax Authority (Vero Skatt) states that capital gain needs to be taxed. They look at it as a trade.

France considers cryptocurrency as movable property so, it is taxed 19%. Miners are taxed up to 45% as it is classified as non-commercial profits. All commercial activities are also taxed at a higher rate.

Germany classifies cryptocurrencies as unit of account, financial instruments. In a scenarios when it is used for payments it is nontaxable. Cryptocurrency holders are obligated to pay up to 45% private property tax. The private property tax exemption applies if you hold your cryptocurrency for at least 12 months.  Mining counts as a business so all taxed applied are the same as for other businesses.

Greece has not issued any policies regarding taxes on cryptocurrency. The only official opinion was released by the Bank of Greece in 2014.

Hungary applies personal income tax which is 15% and Health Contribution tax which is 22%.

Ireland taxes capital gains involving cryptocurrencies at rate 33% (for investors). While up to 52% tax is applied to traders.

Italy issued its guidance for applying taxes on crypto in 2016. Individuals who do not hold cryptocurrency for commercial or corporate purpose are tax exempt. The rest has to pay corporate income tax.

Latvia classifies cryptocurrency as a digitally transmitted value. Income tax of 20% is applied.

Lithuania stated that if cryptocurrrency is used to buy goods and services then the VAT has to be added, if it sold and there is a profit then income tax 15% has to be applied unless the difference between buy and sell price was lover than 2500 EUR. The tax is applied the same as in Forex market. All operations have to be recorded and the gain will be taxed at the end of the tax year.

Companies have to pay a 15% taxes from a profit made in a year.

Luxembourg treats cryptocurrencies as actual currencies as they are used for buying goods and services. No clear tax policy is implemented.

Malta is definitely a crypto friendly country. International businesses related to cryptocurrencies pay as little as 5% tax.

Netherlands do not tax capital gains on crypto, but it include cryptocurrency in your wealth and taxes it if the total amount exceeds 30 000 EUR (for couples double exemption). Businesses which own assets, such as Bitcoin or other cryptocurrencies, remain untaxed. On the balance sheet it is represented at the cost price as current assets or inventory. If the company sold good for cryptocurrency then it has to be included in the company’s turnover.

Poland on 24th of August announced the guideline for paying taxes on cryptocurrencies which states that income earned is taxed at 19% rate.

Portugal does not classify cryptocurrency as currency and they do not apply any personal income tax on cryptocurrency gains.

Romania defines cryptocurrency as electronically stored monetary value and declared that income from transactions in cryptocurrency has to be taxed.  In terms of taxes cryptocurrency belong to the category of movable goods.

Slovakia considers cryptocurrency as short – term financial assets other than money. Mining income or salary in cryptocurrency has to be taxed, however, there is no tax on capital gain.

Slovenia states that cryptocurrencies are virtual currencies. ICOs have to add VAT if the token has features like securities. These assets are not treated as financial instrument or shares so, the capital gain is not taxed.

Spain is taxing profits received from investing in cryptocurrencies under the Law on Income Tax of Individuals.

Sweden is taxing 30% the profit of investing in a cryptocurrency, while the loss is deductible to 70 percent.

United Kingdom for 2018/2019 has an annual tax-free allowance for individuals with capital gains lower than 11 700 GBP, if it is more then Capital Gain tax at 20% is applied. In all scenarios the sale has to be reported to HMRC. If a transaction can be defined as betting or gambling for Income Tax purpose then any gain or loss arising the transaction will be exempt for Capital Gains Tax purposes.