- Only 0.53% of cryptocurrency investors worldwide paid tax on their holdings in 2022.
- The analysis found that the countries with the highest percentages of tax-paying cryptocurrency investors were Finland and Australia, with the United States coming in at number ten.
According to recent research from the Swedish crypto tax firm Divly, only 0.53% of cryptocurrency investors worldwide will pay tax on their holdings in 2022. However, tax experts have questioned the report’s statistics and methodology.
Published on April 5, the Divly report calculated the estimate after examining the correlation between the number of taxpayers who reported Bitcoin and the number of searches for tax-related cryptocurrency terms in different nations. In its estimates, it also factored in the number of cryptocurrency owners in each nation, as reported in Statista’s Global Cryptocurrency Report.
According to the analysis, Finland will have the most significant percentage of cryptocurrency investors who paid the requisite taxes in 2022 at 4.09%, closely followed by Australia at 3.65%.
With an estimated 1.62% of cryptocurrency owners paying taxes, the United States came in at ten on the list. India, Indonesia, and the Philippines had the lowest percentages of tax-paying crypto investors, at just 0.07%, 0.04%, and 0.03%, respectively.
It is dubious how the estimates were calculated. The paper limits the findings by emphasizing that not all taxpayers pay taxes, and thus search volume data may not correctly reflect the actual number of cryptocurrency taxpayers.
A further presumption in the methodology was that there was no regional variation in the volume of searches for crypto tax reporting. It also warned that there might be a bias toward nations with better internet access and more precise search volume data.
Board member of Blockchain Australia and chartered accountant Greg Valles also stated that he would not be able to state with certainty that the process is 100% accurate.
According to Valles, as government technology becomes more specialized and sophisticated, it will be simpler to identify anyone who is not complying. He also cautioned individuals who do not declare their cryptocurrency income today that they risk having their actions caught up with them in the future.
Although there is a greater danger of non-compliance with cryptocurrencies than with other asset classes, Danny Talwar, global head of tax at bitcoin tax software Koinly, stressed that many countries have mechanisms to allow tax authorities to acquire information from cryptocurrency exchanges.