beincrypto.com
New research from crypto tax firm Divly has made some startling revelations about how many investors actually pay taxes.
On April 5, Divly released its “Global Cryptocurrency Taxation Report 2022.” In it were some surprising statistics regarding crypto taxes around the world.
The research analyzed the percentage of cryptocurrency investors who declared their assets to their local tax authorities in 2022.
According to Divly, hardly anyone declared their crypto trading or investing activities to tx authorities last year.
“We estimate that globally just 0.53% of cryptocurrency investors declared their cryptocurrency activity to their local tax authorities in 2022.”
Everyone Avoiding Crypto Taxes?
In terms of payment rates, Finland topped the list with 4.09%. This is the percentage of investors in the country that actually paid crypto taxes in 2022.
Australians came up second, with 3.65% of investors paying some duties on their digital asset profits. Moreover, just 1.62% of Americans paid crypto taxes last year, according to the research. The Philippines had the lowest payment rate at just 0.03%.
The United States has the tenth highest crypto tax payment rate out of the 24 countries analyzed, it revealed.
Even with its low rate, the United States came up top as the country with the most crypto taxpayers. This is likely due to the overreaching control the Internal Revenue Service (IRS) has over Americans’ lives. The report also said that U.S. tax compliance rates had doubled since 2018.
In terms of continents, Asia came out the lowest with just a 0.20% payment rate.
Dubious Methods
Divly’s methods of calculating these figures were a little questionable.
The research used a combination of “official government figures and search volume data” to estimate the number of investors who declared their activities to tax authorities. Governments are likely to vastly underestimate the number of people paying taxes.
It also analyzed the relationship between the number of people who declared their crypto assets in their tax returns and the search volume for cryptocurrency tax-related keywords in a country.
This is a very vague method of determining data, so these figures should be taken with a large pinch of salt.
Earlier this month, U.S. President Joe Biden proposed a budget that included a provision to close the tax loss harvesting loophole on crypto transactions.
Investors have used this method of selling an asset and rebuying it again to reduce any taxes liable on the profit made.
In late March, BeInCrypto reported that the IRS announced it was considering the taxation of non-fungible tokens (NFTs).