Ever thought about paying taxes on trading encryption assets? It might be more complicated than you think.

**Taxes do exist, but the rules are all over the place**

Virtual assets are included in the tax system in most regions around the world, but the specific methods of taxation and the amounts vary by country. Let's first take a look at the gameplay in the major markets.

**The situation here in China**

The country recognizes the property attributes of virtual currencies. As early as 2008, there was a tax approval stating that individuals buying and selling virtual currencies must pay income tax on "property transfer income," with a tax rate of 20%. However, it has not been clearly stated whether this also applies to things like Bitcoin.

The good news is that new regulations will be introduced in 2025 — the income from virtual assets obtained from internet platforms will be taxed based on the platform's conversion price on the day it is received. The bad news is that some people have been audited for not reporting income, so this area is still in the exploratory stage and requires caution.

**The logic of the United States is very straightforward**

The United States classifies virtual currencies as property, and capital gains tax must be paid when selling or exchanging them for fiat currency. The key factor is how long you hold them —

Holding for no more than 1 year is taxed at the ordinary income tax rate, which ranges from 10% to 37%; holding for more than 1 year benefits from a reduced rate of 0%, 15%, or 20%. Additionally, income from mining and staking these newly added virtual assets is taxed as ordinary income like wages, without any benefits.

**EU member states take their own actions**

The EU does not have a unified standard; each country plays by its own rules. Starting in 2025, Italy will impose a 26% tax on encryption gains, which will increase to 33% in 2026, and they have also eliminated the previous tax exemption threshold of 2000 euros. Germany, on the other hand, is relatively lenient—if you hold for more than 1 year, there is no tax; however, if you sell within 1 year and the gains exceed 600 euros, it will be taxed at the personal income tax rate. France takes a straightforward approach, taxing gains from converting virtual currencies to fiat currencies uniformly at 30%.

**Japan's fiercest**

Japan categorizes encryption income as personal miscellaneous income, without distinguishing holding time, and directly applies a progressive tax rate based on total income. At its highest, it can reach 55% (central + local), which is the highest among major markets globally.

**In fact, this matter needs to be taken seriously**

Although many regions are still refining the details of encryption taxation, don't expect to escape it. Especially for large transactions, exchanges and on-chain records are available, and the risk of being traced is very real. With such significant tax burden differences among countries, those operating across regions need to be more mindful of policy changes.