No matter how anonymous, decentralized and valuable cryptocurrencies are, there comes a time when they need to be converted into fiat. Let’s try to figure out how easy or difficult it is to cash crypto into fiat in the top 5 countries of the world.
How to cash out cryptocurrency in the U.S.?
The United States is probably one of the countries with the toughest cryptocurrency tax policies. Almost every transaction with digital assets is taxed there. Even if you don’t exchange your coins for U.S. dollars, you have to pay tax, because cryptocurrency is considered property according to the country’s legal framework.
In fact, the only way to cash out cryptocurrency in the U.S. without taxes is to pass the profits through offshore. Very often, American citizens register companies in countries with zero taxation system and withdraw income in the form of salaries. Such schemes are especially popular with traders, who simply do not benefit from declaring the thousands of transactions they make during a month.
Of course, it is possible to cash out cryptocurrency without paying taxes, using various workarounds, services, etc., but such machinations can lead to the most dire consequences, up to the prison term.
How to cash out cryptocurrency in Japan?
Japan, in terms of cryptocurrency cashing, is one of the most loyal countries. Here, digital coins are officially recognized as a means of payment and a full-fledged currency. Accordingly, the state policy is built in such a way as to deprive crypto-enthusiasts of any obstacles in working with the new generation of money.
In Japan, you can legally cash out cryptocurrency in any of the available methods:
- exchanges (both centralized and decentralized);
- hand to hand exchange.
You do not have to pay any taxes for such operations and the law does not prosecute such activities.
How to cash out cryptocurrency in China?
China has a very strict policy on ICOs, cryptocurrency exchanges and mining, but is relatively loyal to cryptocurrencies in terms of their circulation in the country. So far, China has not developed any digital money taxation laws, but there is a tendency for this to happen.
China has already closed cryptocurrency exchanges and imposed bans on ICOs, which significantly complicates the life of crypto-enthusiasts and startups. It is quite difficult to cash out cryptocurrencies in the country, as some exchanges close access to users from China.
But, no one will cancel the method of cash withdrawal “from hand to hand” – if you want, you can transfer money to another user and request to receive cash in yuan.
How to cash out cryptocurrency in Canada?
The situation here is very similar to the U.S., because cryptocurrency in Canada is not a means of payment or a recognized currency. Even transactions to pay for services or goods with digital money are considered barter. If taxes don’t scare you, you won’t have any problems with crypto cashing out. If you do not want to pay your hard-earned money to the government, you will have to turn to the offshore.
But there is a question of profitability of such a decision – registration of an offshore company often requires a considerable investment. Most likely, it would be more profitable for ordinary users to pay tax.
In most countries, there is no categorically prohibiting the encryption of cryptocurrencies. Thus, the issue always rests only with the taxes that need to be paid when working with digital money. Fortunately, inquiring minds manage to find workarounds here as well, taking their profits offshore and conducting transactions “from hand to hand”.