Financе

Only 0.53% of investors declared their crypto for tax in 2022

Cryptocurrency traders and investors are highly unlikely to report their crypto holdings to the tax authorities, a recent research report from Divly has shown.

The crypto tax automation platform found that the global crypto tax payment rate ranged from 0.03% to 4.09%. The report took a novel approach to estimating the tax payment rate — instead of surveying a limited number of respondents, it used a combination of official government figures, search volume data, and global crypto ownership statistics.

The highest rate was recorded in Finland, where just over 4% of crypto investors declared their holdings. Australia ranked second with 3.65% of users.

Austria, Germany, the United Kingdom, and Norway saw between 2.43% and 2.75% of investors declare their crypto holdings.

The U.S., which boasts the world’s largest number of cryptocurrency users, saw a crypto tax payment rate of just 1.62%. It ranked just below Canada, where 1.65% of investors paid their crypto tax.

Such a low rate of cryptocurrency tax payments around the world likely results from multiple factors.

Firstly, Divly argues that public awareness of cryptocurrency reporting requirements varies amongst countries and is often too unclear for most users.

The company also noted that the higher rates recorded in Japan and Germany could be a result of increased government enforcement. Increased enforcement led to higher availability of tax calculators and other tax services, making tax payments more accessible to users.

An ongoing global push to introduce clearer tax regulations could lead to a significant increase in crypto tax payments in 2023. The E.U. proposed changes to its Directive of Administrative Cooperation (DAC) in December 2022, which would require exchanges to share user data with local governments. If the changes are adopted, local tax authorities in the E.U. would be able to enforce tax payments on cryptocurrency traders and investors.

The U.K. is looking to mandate the declaration of crypto holdings in Self Assessment tax return forms starting next year.

The U.S. could also see an increase in cryptocurrency taxes this year. President Joe Biden is set to propose changes to crypto taxation in a new budget blueprint for 2024, which would specifically target wash trading and introduce a new tax on electricity for Bitcoin mining. And while the electricity tax won’t directly affect the amount of taxes paid on cryptocurrencies, increased government oversight of the industry could push more investors to declare their holdings.

   

Source


Show More
Close

Become a Millionaire by Trading Crypto!