JAKARTA - Taxation rules on global cryptocurrencies vary widely between countries, and some jurisdictions have created very strict crypto tax policies for their residents.

In a new study by crypto analytics firm Coincub, Belgium was named the worst country in the world when it comes to crypto taxation for residents. That's according to an internal ranking that covers aspects of taxation such as taxes on crypto income or crypto capital gains.

Belgium is known for its hefty 33% tax on capital gains on crypto transactions, and it also withholds up to 50% tax on professional income on crypto trading. As previously reported, Belgium adopted strict crypto taxation rules in 2017.

Released on Thursday, Coincub's tax ranking also casts countries such as Iceland, Israel, the Philippines, and Japan as less favorable locations for crypto investors.

In Iceland, any crypto gains up to $7.000 are taxed under 40%, while larger gains are taxed at 46%. Under Israel's tax regime, crypto sales are usually subject to capital gains tax, which amounts to 33%. On the other hand, if crypto trading involves business income tax, it can go up to 50%.

In the Philippines, there is no tax on crypto income under USD 4.500, but after that, any income is taxed up to 35%. The country's government has also discussed a new tax on crypto by 2024, raising concerns that Manila could follow India's lead and impose a flat 30% tax on all crypto revenue.

Japan closed the top five worst countries for crypto taxation for residents in Coincub's ranking. The country has a progressive tax rate system for income that is considered other income. The tax rate varies from 5% to 45%, depending on the total amount of profit.

Among other strict crypto tax economies, Coincub also mentions countries such as India, Austria, United States, Norway, Denmark, and France.

On the other hand, the research shows a number of countries that provide efficient tax incentives to their citizens and have far more favorable crypto tax policies.

According to this ranking, Germany tops the list as the best place for crypto investors, as anyone who holds cryptocurrencies for a minimum of one year will not be subject to capital gains tax for selling or converting their crypto. Other crypto tax-friendly countries include Italy, Switzerland, Singapore, and Slovenia.

The Indonesian government has officially implemented a crypto tax in Indonesia. Crypto tax rates are set in PMK No. 68/PMK.03/2022. This regulation takes effect on May 1, 2022. Physical traders of legal crypto assets that have been regulated by CoFTRA, have the obligation to collect VAT and Income Tax (PPh) for every investor who makes buying and selling transactions.

Although the imposition of this tax poses a positive side, of course there are pros and cons in the domestic crypto community regarding the amount of transaction fees that will be charged to investors. That is an increase of 0.21%. The details are 0.1% for Pph and 0.11% for VAT.

Crypto asset traders who transact on CoFTRA regulated exchanges will be subject to a final tax of 0.21%. It is much cheaper than transacting on an exchange that is not designated as a tax collector where the traders will be subject to the normal PPh rate.

In addition, Coincub mentions classic tax havens or countries that offer foreign businesses and individuals minimal or no tax liability for their financial deposits, of which crypto is no exception. Among them, the study lists the Bahamas, Bermuda, Belarus, United Arab Emirates, Central African Republic, Lichtenstein, and others.

Coincub emphasizes that crypto taxation changes very quickly as new regulations occur regularly. The company also notes that there is an increasing number of countries implementing fixed tax rates on individual gains, aiming to simplify tax collection.

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