Study Shows That Less Than 1% Of Crypto Investors Paid Taxes In 2022

April 7, 2023 10:48 am Comments

When it comes to tax regulations for the crypto industry, a new report shows that less than 1% of all crypto investors globally had paid taxes.

Most investors did not report or declare their digital assets to the tax authorities and this is consistent no matter what country or region the investor is.

This may make sense given that there is still a lot of gray area when it comes to digital assets and how they should be taxed.

However, it is known that regulations are very much anti-crypto for many regions in the world which may be a leading cause for why investors are not reporting.

The data from the report refers specifically to what happened in 2022, but it is expected that similar behavior has been observed for all the previous years. reports:

The current regulatory issues regarding the digital asset industry have been abounding this year. Moreover, as the FTX collapse headlined the disastrous 2022, regulatory agencies have attempted to crack down on the industry’s place in the modern financial sector. Conversely, a recent study has shown another issue between crypto investors and their taxes.

Specifically, a study from Divly has shown that less than 1% of crypto investors paid taxes on their crypto in 2022. Moreover, the study is seeking to take a look at global cryptocurrency investors, and whether or not they declared their digital assets to their respective tax authorities

Consequently, the study found that global cryptocurrency tax compliance is a mere 0.53%. Alternatively, the data displays a variance in that number between continents.

Specifically, North America sported a 1.62% tax compliance. Comparatively, Asia displayed a 0.20% compliance rate.

Other countries actually have even lower rates of tax reporting but the study indicates that this may be because there is a lower percentage of people who actually own crypto in some regions.

So far, North America seems to have the highest number of crypto investors which means it should have the highest number of crypto tax payers.

Ultimately, it is still difficult to track digital assets and this is by design as digital assets give the power of custody back to the people.

Therefore, the crypto community may actually see this as a good thing as it allows the people to take control of their assets and remove any control that the government might have.

This would probably include taxes among many other things.

BeInCrypto concludes:

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.

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