Cryptocurrency Taxation

Cryptocurrency Taxation in European Countries – Are There Any Safe Havens?

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European countries are famous worldwide for high taxation. Although most countries in Europe possess a well-structured social system focused on welfare and an extensive list of government services, this highly developed mechanism comes at a cost.

Currently, taxes exceed at least 40% of GDP in seven European countries, including the home of the famous Notre Dame Cathedral, France. Cryptocurrency taxation is not different, but there are some places where it is still possible to own virtual assets without incurring massive taxes, and that includes trading derivatives such as options on Bitlevex, Coin-M on Binance or regular futures trading on FTX.


Switzerland is known for its “crypto-friendly” jurisdiction. Entities such as Crypto Valley (top-notch crypto development company), the Ethereum Foundation, and now the Libra Association (the foundation for Facebook’s cryptocurrency) have their headquarters in the country.

The treatment of taxes there is interesting – mining income is declared as self-employed income (and taxed by income tax). Professional cryptocurrency trading is subject to corporate taxes, depending on a person’s qualifications as a professional trader.

Hence, if you receive cryptocurrencies as a salary, they will have to be declared as income tax. However, if you qualify as someone who invests and trades from your personal account, cryptocurrency gains are treated as tax-free capital gains.

Note that Switzerland has district taxes that are different based on which region of Switzerland the citizen is and that the annual capital tax includes the tax on the total amount in cryptocurrencies along with the rest of the net worth.

Swiss tax residents are taxed on wealth and income worldwide. In this sense, there are several distinct residence permits and requirements for non-citizens and EU citizens.

Tax residency in Switzerland is established by someone who has decided to live in the country, who will stay there for at least 30 days while looking for work or 90 days in a row without looking for an occupation.


Germany has exempted transactions made with Bitcoin from the VAT (Value-added tax), and while it stipulates that Bitcoin is not a currency, the capital gains exemption on assets held for more than a year affects it.

This means that if you have Bitcoin for a year (and probably other cryptocurrencies), you don’t have to pay taxes on invoicing (since Bitcoin is not cash) and accrued earnings are not subject to fees thanks to the exemption.

However, businesses and companies still have to pay fees for earnings from Bitcoin due to corporate income taxes.

For residential reasons, if you are a citizen of the European Union, you can move to Germany and gain residency. Non-Europeans can apply for residency if they are from certain countries (such as the United States or Canada).

Tax residency in Germany depends on whether or not there is a physical residence in the country, and whether the person has stayed there for more than six months. When there is a residency conflict between two countries, German tax residency is determined by the “contracting state in which the employee has a center of personal and economic interests”.

The capital of Germany, Berlin, is known worldwide for the above-average quality of life of its inhabitants with fast internet, security, great nightlife, freedom of expression, and a large number of people fluent in English.


Cryptocurrencies are exempt from the Value-added tax and personal fees in Portugal, although companies have to pay taxes on profits from cryptocurrencies. Recently, the Central Bank of Portugal authorized the operation of two bitcoin brokers in the country, legalizing the performance of crypto companies in the Iberian country.

The decision goes against the position of the European Central Bank, which has an anti-cryptocurrency approach within the economic space known as Schengen. In Portugal, you are considered a Portuguese tax resident if you have a home in Portugal or if you stay in the country for more than 183 days.

European Union citizens can move to Portugal, but they need a certificate of registration to stay longer than three months. All other citizens must have the right visa to begin the permanent residency process.

According to several websites that measure the quality of life in different capitals around the world, Lisbon has a reasonably high quality of life, which has risen due to its accessibility, ease of walking from one place to another, excellent traffic safety. and variety of places for co-working.

Is It Possible to Save Crypto from Taxes in Europe? – Final Thoughts

In Europe, it is plain to see that most tax agencies expect to “profit” on some sort of fee coming from cryptocurrencies. Accordingly, fiscal agencies in several European countries are always actively looking for tax evaders.

However, in some countries, taxation of cryptocurrencies has exceptions or does not exist at all, especially for those who buy, hold, and sell the assets – places were not paying taxes on gains from investing in bitcoins or similar currencies is completely legal and sanctioned by the government.

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