How cryptocurrencies are taxed in Europe

More and more people are using digital assets in their daily lives, thereby increasing the interest of governments and various financial institutions and pushing them to regulate these assets. However, the situation with regulation and taxation currently varies by country.

With this article, we begin a series of stories about crypto taxes in different parts of Europe. 

Poland

In Poland, income from digital assets is taxed as income from financial capital. Currently, the tax rate is 19%. Losses can be carried forward to future years but only within the income from crypto.

Germany

Germany has one of the most liberal approaches to cryptocurrency taxation. If you hold digital assets for over a year, profits from their sale are not taxed. If you sell crypto within a year, the tax rate can be progressive and depend on your annual income (from 0% to 45%). The tax-free allowance is €600 per year.

France

In France, income from blockchain assets is taxed at a rate of 30%. If the profit is reinvested in specific financial instruments, such as a PEA (Plan d'Épargne en Actions), the tax may be reduced under certain conditions.

Portugal

Portugal remains one of the most attractive countries for crypto investors. Currently, profits earned by individuals from such assets are not taxed. 

Spain

Spain taxes income at progressive rates:

• Up to €6,000 — 19%
• From €6,000 to €50,000 — 21%
• Over €50,000 — 23%

If crypto assets exceed €50,000, they must be declared using the Modelo 720 form.

Italy

In Italy, capital gains tax on cryptocurrencies is 26% if the balance exceeds €51,645 for seven consecutive days. Smaller amounts are not taxed.

Malta

Malta is a "blockchain island" where private ownership of digital assets is not taxed. For professional traders, a corporate tax of 35% applies, but thanks to tax benefits, the effective rate can be reduced to 5%.

Netherlands

In the Netherlands, crypto assets are taxed as property. Rates depend on the value of the assets at the end of the year and range from 0.5% to 1.8%.

Austria

Austria applies a flat rate of 27.5% on profits from cryptocurrencies, and losses can be offset against profits.

Belgium

In Belgium, taxation rules depend on the nature of the investment: active traders pay up to 33% capital gains tax, while professionals are subject to a progressive income tax.

Benefits for investors

Understanding tax regulations will help you better plan expenses and avoid unexpected financial difficulties. Previously, we wrote about the current legislation in the article “How cryptocurrency regulation is happening in the EU?”. 

Knowing the tax rules in each country allows you to not only avoid legal issues but also optimize your finances. We recommend considering tax rates and reporting requirements when choosing a country for activities related to decentralized assets.

Stay tuned for updates, as we will soon write about taxation in other European Union countries.