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Expat Tip 14: How Crypto Is Taxed for Expats – Don’t Let Gains Hide

Crypto isn’t invisible to tax offices — especially when you’re an expat. Even if tokens or NFTs live “in the cloud,” many countries consider them taxable personal property or capital assets.

 

🌐 How Countries Treat Crypto (General Rules)

  • Capital Gains Law: Many jurisdictions treat crypto like shares — gains from selling or trading are taxed as capital gains.

  • Ordinary Income: If you’re mining, staking, or receiving crypto payments, that could be income taxed at ordinary rates.

  • Losses & Offsets: Losses may be deductible against gains or ordinary income, depending on the country.

  • Foreign Exchange Events: Exchanging one crypto to another, or withdrawing to fiat, can trigger a taxable event.

  • Gifts / Airdrops: Some countries tax airdrops or gifts as regular income on receipt or when disposed.

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🧭 Compliance Challenges for Expats

  • Multiple Jurisdictions, Multiple Rules: You might trigger tax in both home and host countries.

  • Reporting Requirements: Many countries demand full disclosure of foreign crypto holdings, even if unrealized.

  • Lack of Clarity / Regulations: Some places have no guidance, making mistakes risky.

  • Tracking Basis & Dates: Over multiple wallets, exchanges, and jurisdictions, keeping clean cost basis records is essential.

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✅ What Expats Should Do

  1. Determine which country considers you taxable on crypto (residency vs non-resident).

  2. Use consistent method for cost basis (FIFO, LIFO, specific identification) and stick to it.

  3. Document trades, transfers, exchanges — timestamped and with counterparties.

  4. Check if your tax treaties have crypto-specific clauses or capital gains articles.

  5. Consider professional help when you’ve got large holdings across multiple countries.

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🦊 Felix’s Quick Tips

  • Even if you haven’t sold, check if gains push you above thresholds (some rules tax unrealized gains).

  • Use software tools (CoinTracking, Koinly) that support multi-jurisdiction reporting.

  • Don’t forget staking rewards, airdrops, liquidity pool income — they’re often taxable.

  • Keep your portfolio export files, blockchain receipts, wallet proofs, exchange API logs.

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