Andorra

Andorra classifies cryptocurrencies as property, though they are equated to currencies for taxation purposes. The country has a regulated environment for digital assets, with a dedicated legal framework provided by the Digital Assets Law, which offers guidelines for crypto and blockchain activities. The primary authority governing crypto taxation in Andorra is the Departament d'Hisenda de l'Andorra (DAH). Taxation falls under the general Personal Income Tax (IRPF) framework, specifically Law 5/2014 on Personal Income Tax, as amended, and is also guided by the broader Law 24/2022 on Digital Assets. For individuals, gains from buying, selling, or swapping crypto are taxed at a flat rate of 10%. This applies to capital gains, and there is an annual exemption of €3,000 on total savings income, including crypto gains. There is no distinction in tax rates based on how long you hold an asset, short-term and long-term gains are both taxed at 10%. Converting crypto to fiat currency is a taxable event, triggering the 10% capital gains tax on realized profits. Specific activities like staking, mining, and Decentralized Finance (DeFi) are also subject to the 10% tax rate. Staking rewards are taxed as savings income. Mining income is considered business income, taxed at 10% for individuals or under the corporate tax rate if conducted via a company, with relevant expenses like electricity and equipment being deductible. Gains from DeFi activities, such as yield farming, are taxed at 10%, with each interaction potentially being a taxable event. NFTs are treated as digital assets, and their sales are subject to the 10% capital gains tax. Crypto-to-crypto exchanges are also taxable events, with any realized gain taxed at 10%. Regarding Value Added Tax (VAT), transfers of cryptocurrencies used as payment instruments are exempt (0%), while other related services may attract the general 4.5% Indirect General Impost (IGI), Andorra's equivalent of VAT.