Bitcoin Betting and Crypto Taxation in the EU and Around the World
A Stake.com review shows that quite a number of Bitcoin betters are using their games and books to make a decent amount of winnings — but what about taxes on such things? If you’re a Bitcoin better, do you need to worry about taxes?
Like most things regarding taxes and financial transactions, it all depends on the country you live in. It may even come down to which city and local government you live in.
This article will give a general overview of taxes on cryptocurrency gains in each country. It’ll give you a jumping board for further research.
The European Union
The EU is one of the more complicated places, so we’ll start there.
The reason it’s complicated is that the EU has left Bitcoin taxation on winnings from gambling, trading, and transacting up to each individual country within the union.
There are a few countries of note, however, that — if you’re an E.U. citizen — you could consider moving to if their BTC tax treatment will make a significant impact on your life.
Three that sound out the most are:
This small country on the westernmost coast of the EU has some of the most attractive Bitcoin tax policies in the EU
“In 2016, the Portuguese Tax Authority (PTA) ruled that all crypto transactions will be free from capital gains and income tax.”
It doesn’t get much clearer than that.
The country has become known for its blockchain-friendly stance. After all, it’s home to the crypto foundations of Ethereum, Tezos, and more.
That’s because, “in Switzerland, the exchange of cryptocurrencies is considered the same as traditional payment transactions. According to the Swiss Federal Tax Administration, all profits and losses from crypto transactions made by individuals are exempt from tax reporting.”
Granted, profits made by businesses in the crypto sphere are taxed under Swiss regulations. However, that doesn’t apply to people making money from winnings from crypto gambling sites.
Another country for simple regulations on your Bitcoin winnings is the home of the Oktoberfest (a good enough reason to live there all by itself).
In Germany, “Bitcoin has been considered a type of private money since 2013. Although Bitcoin is subject to capital gains tax of 25% in Germany, such a tax is levied only if the profits on Bitcoin are acquired within one year after the receipt of Bitcoin.”
So if you won crypto, traded it, or another type of activity and then held it for more than a year afterward, you might not be subject to taxes. Though, perhaps the taxes on winnings from gambling might be a different subject — but it’s difficult to find specific information on gambling and cryptocurrency payouts.
Other EU Countries
There are 28 countries in the EU, each with its own treatment.
For example, in Poland, not only would you need to pay a 19% capital gains tax, but you would also need to pay an extra 4% “solidarity tax” if your crypto income is over one million PLN (Polish fiat).
Clearly, there are certain countries to consider living in over others if you are an EU citizen or considering becoming one.
Countries Around the World
If the EU is not a place you want to consider living in, then there are plenty of other beautiful Bitcoin tax havens in the world to consider.
In Japan, “Bitcoin is officially recognized as a payment method. The sale of Bitcoin is exempted from consumption tax as of 1st of July 2017. Virtual currencies are treated as “asset-like values” that “can be used in making payments and can be transferred digitally”. Thus, in Japan, profits gained from Bitcoin trading are considered to be business income and treated accordingly for income and capital gains tax purposes.”
The land down under is a bit more complicated, but its sunshine and outdoor adventures are legendary.
In Australia, the gain and sale of Bitcoin (probably through betting as well) is subject to laws surrounding barter arrangements.
It’s a tough concept to wrap your head around because the Australian tax authorities don’t consider Bitcoin as either money or foreign currency. Instead, BTC is an asset for capital gains purposes, and businesses (like gambling establishments) must consider payments in and out of Bitcoin as needed to be declared with their value in AUD as ordinary income.
Thankfully, Bitcoin transactions for personal purposes are exempt. Then again, those transactions must meet two conditions,
(1) The Bitcoin must have been used as payment for goods and services for personal use
(2) the value of the transaction is lower than AUD 10.000.
The United States of America
The U.S. Internal Revenue Service (IRS) is the central tax authority in the US. They have established rules and laws treating Bitcoin as property. So your Bitcoin betting winnings are not a currency, but property, and should be reported as such.
If you win $10,000, for example, in the US and then the value of BTC rises so by the time you cash out, you take $20,000 out — then unfortunately your winnings will incur capital gains tax.
So if you’re a big player in online bitcoin gambling sites, it’s worth considering how much winnings you cash out, when, and where — or else your winnings may be diminished quite a bit by the taxes of the country you live in.