Subscribe Can You Avoid Taxes on Crypto? Skip to main content

Featured

How the Saint Lucia Citizenship By Investment Program Can Benefit Crypto Investors Seeking a Tax Haven

  Photo by yousef alfuhigi on Unsplash Cryptocurrency investors are always on the lookout for tax-efficient solutions to minimize their tax liabilities. One option that is gaining popularity among investors is the Saint Lucia Citizenship By Investment Program. In this article, we'll explore how this program can benefit cryptocurrency investors looking for a tax haven country. Saint Lucia is a sovereign island country located in the Caribbean Sea. Its Citizenship By Investment Program (CIP) was established in 2015, allowing investors to obtain a second passport by making a qualifying investment in the country. Saint Lucia's CIP has become a popular choice for high-net-worth individuals and entrepreneurs seeking a safe haven to protect their assets and minimize their tax liabilities. Saint Lucia's second passport permits travel to 145+ global countries visa-free, including the United Kingdom, Singapore, Hong Kong, as well as the European Union countries. The Saint Lucia pass
Read more
Labels

Can You Avoid Taxes on Crypto?

 


You aren't taxed if you only buy or hold cryptocurrencies, like with any investment. The moment you dispose of it, the tax repercussions begin. This includes exchanging it for another currency, giving it as a gift, selling it or exchanging it for another currency, such as the Canadian dollar, or using it to pay for goods or services. The industry is still expanding in Canada. By 2021, 14% of Canadians will possess or have already owned cryptocurrency. Of them, 70% will hold or have already held Bitcoin, while 41% will own or have already held Ethereum. In addition, the poll's findings—which lack an error margin because it was conducted online—show that one in four respondents were thinking about purchasing digital currencies in the future.

Earnings from cryptocurrencies are regarded as capital gains or business income, thus you will need to pay income tax or capital gains tax. If your income qualifies as capital gains, 50% of profits are subject to tax. 100% of business income is included. Because there aren't any clear guidelines for dealing with cryptocurrencies, you're depending on more archaic ideas from the Income Tax Act.

What tax consequences might you expect if you move your cryptocurrency to a checking or Registered Retirement Savings Plan (RRSP)?
For income tax purposes, the exchange of cryptocurrencies for Canadian dollars and subsequent transfer to a checking or retirement account would be seen as a disposition.

The same taxes apply when buying an NFT as when buying another cryptocurrency. Both occasions involve dumping cryptocurrency. Investors in cryptocurrencies should save their records from their exchange of choice and make sure to fully disclose all business revenue and capital gains when paying their taxes on their own or with the help of a tax expert in order to be prepared for tax season.

Tax regulations on cryptocurrencies may be confusing. Let Koinly keep tabs on your transactions and compute your taxes for you. Koinly.io

More Articles Below

Koinly Review: Cryptocurrency Tax Software
What Does the Future Hold for Bitcoin?
7 Best Centralized Exchange Tokens



Labels:
Location: Canada