El Salvador

El Salvador legally defines Bitcoin as legal tender, existing alongside the US Dollar since the Bitcoin Law of September 2021. Other cryptocurrencies are classified as digital assets and fall under a regulated framework. The country operates with a regulated environment for digital assets and the service providers dealing with them. The National Commission of Digital Assets (CNAD) is the governing body responsible for overseeing digital asset regulation and licensing, operating under the framework established by the Bitcoin Law and the Digital Assets Law (2023). For individual investors, El Salvador imposes a 0% tax rate across all crypto-related activities. This means there is no capital gains tax on the buying, selling, or swapping of cryptocurrencies, with full exemption regardless of the holding period. Income derived from crypto, such as rewards or airdrops, is also exempt from income tax at a 0% rate. Corporate tax is also 0%, specifically for CNAD-licensed crypto businesses. Additionally, there is no Value Added Tax (VAT) on crypto transactions for licensed entities. Specific crypto activities like staking, mining, and earnings from Decentralized Finance (DeFi) protocols are treated with a 0% tax rate. Sales and gains from Non-Fungible Tokens (NFTs) are also exempt. Both converting crypto to fiat currency and engaging in crypto-to-crypto trades are not considered taxable events. Recent amendments to the Bitcoin Law, which became effective in 2024 and 2025, have introduced changes regarding Bitcoin acceptance and tax payments. While Bitcoin remains legal tender, its acceptance by businesses is now voluntary, and the facility to pay taxes using Bitcoin has been discontinued.