Bitcoin was launched in 2009 and is considered the first step towards the new money generation. With the emergence of cryptocurrencies, governments all over the world had the problem of how to include such assets in the system of taxes. In Europe, the approach to crypto taxes has shifted dramatically over time, which is due to the differences in the economies and the general regulatory attitudes of the countries. This article aims to discuss the evolution of crypto taxes in Europe and reveal information about modern tax legislation in key European countries.
Here are the 8 Major European Countries with their Taxes Structure.
Crypto Taxes in Major European Countries
1. Germany
In Germany, cryptocurrencies are regarded as private money. The taxes are even more favorable as if you keep your crypto for over a year, there is no tax on gains. But if you are selling within a year, then such profits are liable to income tax rates which may go up to 45%1. Additionally, a 5.5% solidarity surcharge may apply depending on the income that is not less than €10,9081.
Source: Koinx.com
2. France
France treats crypto gains as a capital gain on the sale of intangible assets. There is no distinction between the standard and reduced rates and therefore the tax rate is a flat 19% plus 17% and 2% social contributions thus making the total tax rate to be 36.2%. This applies to gains earned from trading in Bitcoin and other such cryptocurrencies for the short term.
Source: Blockpit
3. Italy
In Italy, any earnings from cryptocurrencies are taxed under miscellaneous income. It is 26% for any gains in a given tax year exceeding €2,000. That is why any gains below this threshold are tax-free. Italy also demands extensive reporting of crypto transactions as well.
| Taxes (%) | Tax Base (EUR) |
| 23% | €0 – €15,000 |
| 25% | €15,001 – €28,000 |
| 35% | €28,001 – €50,000 |
| 43% | €50,001 and over |
4. Spain
Spain has not developed specific rules for the taxation of cryptocurrencies, instead, it taxes the gains as ordinary income. The tax rate is between 19% to 28% depending on the amount of profit of the business. Spain has also provided strict reporting standards for the possession and trading of cryptocurrencies.
| Taxes (%) | Tax Base (EUR) |
| 19% | Up to 5,000 EUR |
| 21% | >5,000 EUR ≤ 55,000 EUR |
| 23% | >55,000 EUR ≤ 200,000 EUR |
| 26% | Over 200,000 EUR |
5. Netherlands
In The Netherlands, cryptocurrencies are categorized as your property and are subject to the wealth tax. The tax is computed depending on the value of the property, including cryptocurrencies, as of the start of the year, namely January 1st. The rates vary from 9.42% and 49.50%.
6. Belgium
In Belgium, the taxation of cryptocurrencies depends on the type of investment made. In the case of speculative investments, the amount of tax is 33% whereas in the case of non-speculative investments, the tax may not be charged at all. The rates of tax charged to professional investors for their income vary from 25% to 50%.
| Taxes (%) | Tax Base (EUR) |
| 25% | From 0 to 13,540 EUR |
| 40 % | From 13,451 – 23,000 EUR |
| 45% | From 23,000 – 41,360 EUR |
| 50% | Above 41,360 |
Source: Rue
7. Portugal
Portugal’s crypto tax rates are between 14. 5% to 53% with special provisions for mining. The normal rate of capital gains tax in Portugal is 28%.
| Taxable income (EUR) | Tax rate (%) | Deductible amount (EUR) |
| 0 – 7,460 | 14.5 | 0 |
| 7,461 – 11,284 | 21.0 | 486.14 |
| 11,284 – 15,992 | 26.5 | 1,106.73 |
| 15,992 – 20,700 | 28.5 | 1,426.65 |
| 20,700 – 26,355 | 35.0 | 2,772.14 |
| Above 26,355 | 37.0 | 3,299.12 |
Source: Token Tax
8. Denmark
Denmark has one of the highest tax rates on crypto gains, ranging from 37% to 52. The exact rates depend on your income bracket. Denmark also requires a comprehensive reporting of crypto transactions.
Source: Coin Ledger
Wrapping Up
Crypto taxation is crucial knowledge for anyone interested in cryptocurrencies in Europe. Every country has its laws and tax policies that are different from one country to another and therefore it is important to understand the laws of the country you live in or the country you are investing in. Therefore, it is crucial to be updated and act accordingly to ensure your crypto investments are well-managed and you do not break the law. In this ever-evolving world of cryptocurrency, being knowledgeable about the tax laws governing your assets will assist you in maximizing your gains.
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FAQS – Frequently Asked Questions
Crypto taxes are calculated according to the type of the transaction e.g. sale, trade, or income, as well as the holding period. Every nation has its own unique conditions and taxes included.
Indeed, it is essential to note that many of the European countries demand extensive reporting of the crypto assets and their dealings. This means that if one does not report, he or she is likely to be penalized.
Portugal is famous for its tax exemption on individuals’ profits from cryptos. However, corporate taxes still apply when dealing in the crypto business.
There are penalties, fines, and legal actions that one can face in the case they do not pay their crypto taxes. In any country it is mandatory to pay taxes and so it is mandatory to follow the tax regulations of the country.