Tax Implications

It may come as something of a shock, but in most countries the profit you make from buying and selling crypto is a taxable event. In the early days of crypto it was possible to fly below the tax radar, as authorities hadn’t quite worked out how to treat the nascent industry. Not so now. 

With crypto entering the mainstream the taxman will expect a cut of your profits. You may choose to ride your luck and simply not report qualifying gains but many exchanges are being mandated to share customer details with tax authorities, leaving little wriggle room.

Before you start panicking, modest investing is unlikely to hit the taxable threshold, and on the plus side, you can offset losses against your tax bill. The implications will depend on where you live. Congratulations if you live in these crypto-friendly territories:

• Belarus
• Germany
• Malaysia
• Malta
• Singapore
• Slovenia
• Hong Kong
• Switzerland

We look at the subject in more detail in an advanced article, but for now, have tax obligations at the back of your mind when thinking about selling cryptocurrency, and look for official resources or professional services if the amounts concerned warrant it. We list some in our resources section