In the U.S., the IRS is progressively clarifying the ambiguity persisting on the taxation of cryptocurrencies, as illustrated by the recent publication of a fairly detailed FAQ[1]. In parallel, the U.S. tax administration is carrying out numerous tax audits[2].
In Europe, while no state has shown hostility, very few are those that have adopted a fiscal environment that encourages a positive development of cryptocurrencies.
To understand taxation of cryptocurrencies in the EU, it must be kept in mind that the EU has no power over direct taxation (however, VAT is an EU matter, which explains the ECJ's decision[3] that bitcoin-fiat trade is exempt from VAT). Thus, each member state freely sets its own tax rules at national level. This is a problem in a single market, but it is as old as the EU.
Within this patchwork of tax regimes, it is still possible to identify key trends and opportunities.
Key Trends in Taxation of Cryptocurrencies
Convergences
First, it should be noted that in all states, the tax treatment of bitcoin gains is closely linked to the country's tax system. Where no specific regime is provided for, cryptocurrencies fall into pre-existing tax categories. Naturally, countries with favorable capital taxes only slightly tax capital gains on cryptocurrencies. Switzerland (outside the EU but within the European Economic Area) does not tax income from private wealth management. The United Kingdom[4] foresees fairly low flat rates (10 percent or 20 percent). The Netherlands[5] provides for a rate of 30 percent, which, however, only applies to notional interest, i.e., a fictitious amount of income generated by the capital held.
Example from the Netherlands: A person holds 100 BTC (worth €320,000) on January 1, 2019. To calculate its
