The European microstate of Liechtenstein came in as the country with the clearest crypto tax policies for 2021, while Germany, coming in as number four, saw one of the best improvements since last year, a new report from consulting giant PwC has found.
Following Liechtenstein, Australia and Malta ranked as having the second and third clearest crypto tax policies. The United States came in as number 14, after scoring slightly higher this year compared to last year’s report.
Other popular jurisdictions for companies working in the crypto space, such as Singapore and Hong Kong, came in fifth and seventh, respectively, the ranking showed.
The report, titled PwC Annual Global Crypto Tax Report 2021, ranked countries according to 19 assessment criteria to determine how clear and comprehensive their tax guidance for digital assets is.
The report noted that most of the top-ranked countries from last year also did well in this year’s report, with Malta, Australia, Switzerland, and Singapore all increasing their scores compared to last year.
It added that Germany rose significantly in this year’s report because of a draft decree released in July 2021 on the tax treatment of digital assets. Germany jumped from being ranked as the 20th best country for crypto tax clarity last year to 4th this year.
The report further noted that El Salvador, which made bitcoin legal tender in 2021, still does not have any formal guidance on how digital assets should be taxed, except for an exclusion from capital gains tax for trades between bitcoin (BTC) and the US dollar.
Meanwhile, a survey in the report also found that most jurisdictions still don’t offer any guidance as to how digital assets should be taxed. The share of countries that have no guidance has also grown considerably from last year, PwC’s data showed.
Following jurisdictions with no guidance, the second most common option was to treat crypto as intangible property for tax purposes, followed by a broad “others” category.
The report added that among the countries that have tax policies that fall into the “others” category, Canada is among the major countries that have chosen to treat crypto as a commodity for the purposes of income tax.
Source: Cryptonews
