Crypto Taxes in Different Countries: How and When to Pay Them
Cryptocurrencies are decentralized assets, which means governments and banks can’t control them in any way. However, countries can still limit how people interact with it and regulate its use. Taxes are an example of that.
You need to pay taxes for the properties you own and the money you make, and crypto is not an exception. If you don’t want to be guilty of tax evasion by accident, you should study how and when to pay them in your country.
Naturally, all countries have different regulations and tax systems, so the tax restrictions in the United States are different from the Canadian or Australian ones. Although these assets have been around for a while, not many countries have advanced law precedents on how to treat them.
This blog post shows how and when to pay crypto taxes in four countries with advanced tax regulations on cryptocurrencies. The official Bet999 website has more content about crypto and gambling, so check it out if you want to learn more about it.
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United States
The Internal Revenue Service (IRS) is the United States government agency that deals with taxes and related subjects on a federal level. The United States has stated several regulations on the use of crypto in the past few years, and one of them was that crypto-holders had to include this asset as a property for tax purposes.
Why did the IRS do that? Because it allows it to make the profits and losses people make from buying and selling cryptos subject to capital gains taxes. The tax rate people pay depends on how long they held the crypto before selling it. You can report it as short-term capital gains if you held it for less than a year, which allows you to tax it at your regular income tax rate.
If you, on the other hand, held your crypto for more than a year, the IRS considers it as long-term capital gains, so you can tax it at a lower rate. We recommend that you use a crypto tax calculator or hire a financial advisor to help you with this.
You have to file form 8949 along with your tax return to report your crypto taxes. Keep track of all the transactions you make throughout the year to report them accurately. US citizens must do this annually by April 15th.
Canada
While cryptocurrencies in the United States are treated as property, the Canadian government addresses them as commodities for tax purposes. According to the Canadian tax system, any profits or losses you make from buying, selling, or trading crypto are subject to income tax.
The tax rate in the United States depends on how long you hold the crypto, which makes traders think of long-term strategies to pay for them at a lower tax rate. This doesn’t happen in Canada, as it depends entirely on your income bracket.
Reporting your income in Canada is not as complex as in other countries. Include them in your tax return under the “Other Income” classification. Canadian citizens have to keep track of all their crypto transactions to report them on their tax returns by April 30th. The Canada Revenue Agency (CRA) is in charge of regulating this process.
United Kingdom
The United Kingdom is one of the countries where crypto-holders have the most freedom, as its laws are flexible around trading and protect traders and investors from scammers. Moreover, the way it treats crypto for tax purposes is different from others.
Instead of addressing it as a commodity or property, the United Kingdom treats crypto as an asset, which is an accurate way of seeing it. You need to file crypto gains and losses on your tax return as capital gains tax. Since the government sees it as an asset, its tax rate depends on how much you profit from each transaction.
If you want to report your crypto taxes in the United Kingdom, you must fit them in your self-assessment tax return. Your tax rate depends on how much you profit from each crypto transaction, so you need to keep track of all of them, even if you didn’t profit from them.
Although this country has a government agency to deal with any crypto-related matter, the HM Revenue and Customs (HMRC) still deals with taxes, as it does with other sources of income. You have to report your taxes annually by January 31st.
Australia
Similar to the United Kingdom, Australia has flexible regulations on crypto to give investors and traders all the freedom they can get while staying safe. However, how it treats taxes around this asset is more like the United States’ way of doing it.
The Australian government treats crypto as a property, and it’s part of the capital gains tax on your annual tax return. Tax rates depend on how long investors hold the asset before selling it too.
When you include crypto transactions on your annual tax return, do it under the “Capital Gains” classification.” You must address all your tax-related information directly with the Australian Taxation Office (ATO) and file your report by October 31st.
Bottom Line
As you could see, the main changes in the way in which those countries address taxes around cryptocurrencies are how they treat it and the dates where you have to report your annual tax return. However, there are many similarities between them.
You always have to keep track of all the transactions you make, and they all manage the entire tax process through a specific government agency. Make sure you understand those similarities or differences if you are going to move to another country and want to profit from crypto there.
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