Looking to relocate to a country that allows you to mine cryptocurrency tax-free?
While some countries, like the United States and Australia, have high crypto taxes, other countries offer more favorable policies for crypto miners. In this guide, we’ll go through the top 8 countries with low taxes for crypto mining.
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How are mining rewards taxed?
If you are mining cryptocurrency, you are subject to two different tax events:
- Income tax when you receive your mining rewards
- Capital gains tax when you dispose of your mining rewards
However, some countries offer friendly policies for crypto miners, allowing them to realize mining profits at discounted rates or no tax at all.
Are crypto mining rewards tax-free in all circumstances?
It’s important to note that your crypto mining rewards may be taxed differently in your jurisdiction, depending on whether you are mining as a business or mining as a hobby.
Typically, crypto mining businesses are required to pay income tax on their profits. However, hobby miners are not subject to tax in many countries.
Different countries have different rules on whether crypto mining should be considered a business or a hobby. Here are a few common factors that tax agencies across the world use to determine the nature of your mining operation:
- You depend on crypto mining rewards to make a living.
- You intend to make a profit on cryptocurrency mining.
- You run your crypto mining business in a ‘businesslike manner’ (this may include keeping careful records of expenses and transactions, creating materials for prospective investors, and maintaining separate business and personal accounts)
The 8 Best Countries for Tax-Free Crypto Mining
Malta
Malta is one of the friendliest countries in the world toward cryptocurrency and has been dubbed ‘Blockchain Island.’
The Maltese central bank encourages crypto mining activities with its proactive regulatory approach towards blockchain technology.
Malta boasts a competitive corporate tax rate, a crucial advantage for enterprises seeking cost-effective mining.
In Malta, there is no long-term capital gains tax for cryptocurrency. However, mining cryptocurrency as a business and trading cryptocurrency may be considered business income taxed at a maximum of 35%.
It’s important to remember that the Maltese government looks at multiple factors to determine how your income from crypto is taxed — including how much you make from crypto and your residency. As a result, the taxes on your business income may be as low as 0-5%.
In addition to its friendly crypto-mining tax policies, Malta has no wealth, inheritance, or gift taxes!
Switzerland
Switzerland is a highly sought-after destination for crypto mining due to its favorable business environment, political stability, and advanced infrastructure.
The country’s decentralized governance system allows different regions to offer specific tax incentives, creating a unique advantage for mining enterprises seeking flexibility in their tax structures.
Moreover, Switzerland is home to a hub of companies known as the ‘Crypto Valley’ and does not have capital gains tax for individual investors.
However, income from activities such as staking and mining is subject to income tax between 0-13.2%, and wealth tax on assets (including crypto-assets) ranges from 0.5-0.8% depending on the canton of residence.
Belarus
In Belarus, cryptocurrencies are exempt from capital gains, income tax, and VAT for businesses and individuals until January 1, 2025.
Belarus initially passed a law exempting cryptocurrencies from taxation in 2018. While the law was originally set to expire in 2023, President Alexander Lukashenko extended tax benefits for crypto investors and businesses until 2025.
As a result, Belarus has become an attractive destination for Bitcoin and crypto miners looking to operate in a low-tax environment.
Georgia
Georgia is positioned as an advantageous locale for crypto mining, boasting relatively low energy costs, which is a key factor for the economic viability of mining operations.
The availability of cost-effective energy, including electricity costs, contributes to the appeal of Georgia as an optimal destination for Bitcoin miners seeking sustainability and efficiency in their energy-intensive processes.
Georgia also offers free industrial zones (FIZ) where crypto mining companies are not required to pay income tax or VAT.
This tax exemption aligns with Georgia’s commitment to fostering a conducive environment for the cryptocurrency industry, making it an attractive choice for those seeking both operational efficiency and favorable tax conditions.
Norway
Norway has emerged as a popular destination for cryptocurrency mining due to its abundant renewable energy sources, which contribute to lower energy costs for mining operations.
The country’s focus on sustainability provides an environmentally conscious solution for miners looking to reduce their carbon footprint and operating expenses.
Additionally, Norway’s straightforward tax regime for cryptocurrency activities — a flat capital income tax of 22% — simplifies financial planning for mining operations and aligns with the country’s commitment to transparency and ease of doing business in the cryptocurrency sector.
Ireland
Ireland is one of the most popular countries in the European Union to mine cryptocurrency. In recent years, Ireland has been considered a ‘cryptocurrency hub’ due to its crypto-friendly policies.
Ireland is a well-known tax haven for corporations. Crypto mining businesses pay the corporate income tax on mining profits — currently just 12.5%!
Singapore
At this time, Singapore does not have a capital gains tax, meaning individual investors can dispose of their crypto without any tax implications.
In most cases, cryptocurrency is not subject to income tax in Singapore for individuals.
However, crypto mining businesses are likely subject to the 17% business income tax.
Moreover, you may have to pay GST on goods you buy with your cryptocurrency.
Malaysia
Malaysia — Singapore’s neighbor — is another popular country to mine cryptocurrency. Malaysia is known for its cheap electricity costs and crypto tax-friendly policies — including no capital gains tax!
Cryptocurrency mining rewards are likely subject to income tax in Malaysia, ranging from 3-30%.
Do American Expatriates Need to Pay American Mining Taxes?
If you’re an American citizen, it’s important to remember that you’ll be required to pay US taxes even if you relocate.
If you’re an American citizen or green card holder earning more than $12,950, you’ll generally be required to file Form 1040 regardless of where you live and where you make your income.
In addition, you may be subject to capital gains tax rates if you spent more than 183 days in the United States during the tax year.
What are the Most Tax-Friendly States in the United States?
Often, American citizens find the process of moving overseas to be time-consuming and difficult. It may be more viable for you to move to another state with more tax-friendly policies.
Currently, Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming have no state income taxes (although New Hampshire and Tennessee tax interest and dividends).
This guide is brought you by Dhiraj Nallapaneni
Dhiraj Nallapaneni is a Content Marketing Manager and Cryptocurrency Tax Writer at CoinLedger. As an Economics degree holder from the University of California Santa Barbara, he’s well-versed in topics like cryptocurrencies, markets, and taxation.
Dhiraj has been deeply involved with the cryptocurrency ecosystem since 2017. He currently resides in San Francisco, California.
