coinedition.com
A study published on Wednesday by the Swedish tech company Divly has revealed that the overwhelming majority of crypto owners worldwide are not paying taxes on their holdings. The paper argued that less than 1% of crypto investors paid tax in 2022.
Specifically, the report revealed that just 0.53% of investors globally declared their crypto activity to local tax authorities last year. According to the study, Finland had the highest tax payment rate, with 4.09% of crypto investors paying taxes, while the Philippines had the lowest rate at 0.03%.
In the United States, an estimated 1.62% of crypto investors declared their crypto to tax authorities, making the US the tenth highest crypto tax payment rate out of the 24 countries analyzed. In Asia, Japan had the highest tax payment rate at 2.18%.
Among the European countries looked at, Finland had the highest payment rate and Italy the lowest at 0.26%. Divly said the possible explanation for Italy’s low payment rate was that citizens were only required to report Bitcoin holdings of more than $56,267 in 2022.
Notably, no African country was tracked for crypto tax despite the region being one of the fastest-growing crypto markets in the world, according to IMF, with transactions peaking at $20 billion per month in mid-2021.
Ultimately, the research firm highlighted that factors contributing to variations in the tax payment rate include public awareness, differences in tax compliance, and government policies.
The firm adopted a multi-step approach to determine the rate at which taxes are paid on cryptocurrencies in different nations. It used official government figures, search volume data, and available crypto ownership data.