Is the grass greener on the other side? Comparing capital gains tax rates
I know we are in the midst of a bear market and are accustomed to our glaringly red crypto portfolio mocking us. But seeing that inflation and energy prices are going up, some of us may have to make hard decisions because the country we live in just doesn’t allow us to earn money. Geographic arbitrage, which refers to the migration to a state or even country which is cheaper than our current one, may be something for us to look into.
I’m certainly considering my options. The pandemic has made remote working a norm, so I could well find online freelance jobs in my motherland and live cheaply in another country. This piqued my curiosity about capital gains taxes in countries all over the world. This is to help me make informed decisions when push comes to shove.
Here are some facts and figures about taxes in various countries. I compiled them as I interacted with people from this sub. If I wasn’t rigorous enough in my fact check and made certain errors, please let me know so that I can clarify misconceptions.
Vietnam - Crypto is untaxed.
Singapore - Crypto is untaxed.
Indonesia - Tax is 0.1%.
Germany - Tax free if you HODL the asset for one year.
United Kingdom - Allowed £12,500 profits before one has to pay any tax. You then pay either 10% or 20% capital gains tax, depending on your income bracket. If your total income is less than £50,270, you will fork out 10% tax. If it exceeds £50,270, a 20% tax will be incurred on you. Fun fact, if you are married, you are allowed to spilt profits between you and your spouse.
Bulgaria - Capital gains tax is 8%.
America - Capital gains tax is 24% for any portfolio under a year. The rate does drop substantially if your crypto is held over a year. You are also not only allowed $41,675 profits before having to pay taxes, but are empowered to offset up to $3k of crypto losses every year.
Canada - Capital gains tax is 10-25%, depending on the province you come from. The saving grace is that the capital gains are just half of your reported income at your current tax rate. You will also get a personal allowance of $14,398 profits before having to pay any taxes.
Italy - Capital gains tax is 26%.
Sweden - Capital gains tax is 30%.
France - Capital gains tax is 30%. And losses cannot be carried over to offset crypto gains in subsequent years.
Finland - Capital gains tax is 30% below $30k. Beyond $30k, it increases to 34%. Plus, every time you swap one crypto for another crypto, you are obliged to pay a tax. This effectively disincentivises people from swapping their crypto.
India - Capital gains tax is 30% from 1st April 2023 onwards. From 1st July onwards, they also got to pay 1% tax on every crypto they trade.
Ireland - Capital gains tax is 33% on all profits after the first €1270.
Spain - Different tax brackets imposed depending on your particular profit margin:
€0-€6000 —>19%
€6000-€50000 —>21%
€50,000-€200,000 —>23%
more than €200,000 —> 26%
Denmark - The country with the highest capital gains tax at 42%.
Australia - You get a personal allowance of $18,201. Then, you will be taxed at your personal income rate (can be as high as 45%), unless held for over 12 months and then you get a $50 discount. You can also offset any losses for any current or future gains.
Any interesting information about capital gains taxes in your country will be most welcomed!1
Footnotes
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I once shitposted on r/cc & cross-posted this on my blog. This was written in 2023, so some information may be outdated. But I’m quite impressed with how I meticulously compared each country’s tax rate, one at a time. ↩
This post might be more relevant and engaging in the ~Politis_and_Law territory.