STOCKHOLM - April 4, 2023 - PRLog -- A study by European cryptocurrency tax calculator Divly estimated that just 0.53% of cryptocurrency investors declared their cryptocurrency activity to their local tax authorities in 2022. However, tax payment rates varied significantly by country, with Finland boasting the highest rate at 4.09% and the Philippines registering the lowest at 0.03%.
In the United States, an estimated 1.62% of cryptocurrency investors declared their crypto holdings to tax authorities in 2022, placing the US 10th among the 24 countries analyzed. Other countries with relatively high tax payment rates included Australia (3.65%), Austria (2.75%), Germany (2.63%), and the United Kingdom (2.61%).
The study looked at the total number of cryptocurrency investors that declared their taxes but does not claim that everyone who invested in cryptocurrency was required to pay taxes.
Historical Trends in Cryptocurrency Tax Compliance
Historical trends show a steady increase in cryptocurrency tax declarations. In 2015, less than 900 US citizens reported crypto according to the United States District Court, while 5.9 million Coinbase accounts were active. By 2018, declaration rates increased to 0.8% based on data from Credit Karma. The current study estimates 1.62% of US investors declared taxes in 2022, a doubling since 2018, but compliance remains low.
Discrepancies with Survey-Based Studies
While this study presents a comprehensive analysis of global cryptocurrency tax compliance, it is worth noting that its findings differ from those of several survey-based studies. These discrepancies may be attributed to differences in methodology and potential biases in survey data.
Survey-Based Studies in the US
Cointracker conducted a survey in 2022 that showed 4% of US cryptocurrency investors had reported their cryptocurrencies at a time when 40% of individual returns had been filed. This figure is considerably higher than the 1.62% estimated by the current study. Similarly, a Coinledger survey in 2021 indicated that more than 50% of respondents declared their crypto holdings on their tax returns.
Factors identified that may contribute to discrepancies in compliance rates between the study and previous surveys include potential overestimation due to respondents' unwillingness to admit non-compliance, and self-selection bias, which results in skewed data from differing participant choices.
Future Outlook
Tax payment rates for cryptocurrencies may improve as countries implement new regulations and enhance enforcement, such as the European Union's proposed changes to the Directive on Administrative Cooperation (DAC).
The report highlights the current state of cryptocurrency tax compliance across the globe and underscores the need for improved regulation and enforcement. As the cryptocurrency landscape continues to evolve, it will be crucial for governments and tax authorities to adapt and ensure that the growing number of investors are adequately informed about their tax obligations.
Contact
Ragnaros AB
***@divly.com
Photos: (Click photo to enlarge)
Read Full Story - Crypto Tax Compliance Staggeringly Low: Only 0.53% of Investors Declared Crypto in 2022, According to Study | More news from this source
Press release distribution by PRLog