Swedish crypto tax company Divly has released a new report estimating that in 2022, just 0.53% of global crypto investors will have paid taxes on cryptocurrencies.
Divly Released April 5 report derived this estimate after analyzing the relationship between the number of people declaring cryptocurrency on their tax returns and the search volume for cryptocurrency-related keywords in each country. We also used the number of crypto holders in each country in our calculations, according to Statista’s Global Cryptocurrency Report.
According to the report, Finland has the highest percentage of crypto investors paying the required taxes on cryptocurrencies in 2022 at 4.09%, followed closely by Australia at 3.65%.
The United States ranks 10th on the list, with an estimated 1.62% of cryptocurrency holders paying taxes, while India, Indonesia and the Philippines have the lowest tax rates for cryptocurrency investors at just 0.07% and 0.04% respectively. , was 0.03%. .
The methodology used to arrive at the estimate is questionable.The report itself shows that search volume data is The number of crypto taxpayers as not all taxpayers search for crypto tax related information online.
Another assumption in our methodology was that the number of searches related to crypto tax reporting did not vary by country. It further warns that countries with more accessible internet and more accurate search volume data may be biased.
Danny Talwar, global tax head of crypto tax software Koinly, disputed that the majority of cryptocurrency investors are not paying taxes, as the report suggests. He told Cointelegraph:
“99.5% may not reflect countries with specific crypto tax guidance and strict compliance requirements, such as the United States, Canada, Australia, and India.”
CPA Greg Valles, board member of Blockchain Australia, also said, “We cannot say with absolute certainty that this methodology is 100% accurate.”
Both tax experts noted that government data collation and surveillance efforts are making it increasingly difficult to avoid crypto taxes.
Barrez said that as government technology becomes more sophisticated and specialized, it will be easier to detect those who are not compliant, and those who do not currently report cryptocurrency gains will be more likely to do so in the future. warned of the risk of catching up with
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Talwar stressed that while the risk of non-compliance with cryptocurrencies is relatively higher than with other asset classes, tax authorities in many countries have processes in place to obtain data from cryptocurrency exchanges. bottom.
He notes that there has been a “significant increase” in virtual currency tax awareness among investors in these jurisdictions, with only “15% of surveyed crypto investors” being aware of their virtual currency tax reporting obligations. He added that he had confirmed that he had not.
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