Iceland

In Iceland, cryptocurrencies are legally classified as taxable assets and are subject to general tax laws. While there is no specific dedicated crypto framework, cryptocurrencies are legal, and general tax and capital control laws apply. Capital controls were eased in 2017, allowing cross-border crypto transactions. The Icelandic Revenue and Customs, known as Skatturinn, is the responsible authority for administering cryptocurrency taxation. This is done under the general provisions of the Income Tax Act. For individuals, income derived from cryptocurrencies is subject to progressive personal income tax rates. However, capital gains realized from the sale or exchange of crypto are taxed at a flat rate of 22%. This flat 22% capital gains rate applies regardless of how long the asset was held, meaning there is no benefit for long-term holding. Converting crypto to fiat currency or swapping one cryptocurrency for another are both considered taxable events, with any profit from these transactions subject to the 22% capital gains tax. Staking rewards are taxed as received income, valued at their market price upon receipt. Mining operations are treated as a business activity, with rewards taxed as business income at either progressive personal income tax rates or the standard corporate tax rate of 20% for companies, or 37.6% for partnerships and cooperatives. In the decentralized finance (DeFi) space, activities like yield farming and lending are generally taxed as income when rewards are received, while crypto swaps within DeFi are treated as capital gains events. Non-fungible tokens (NFTs) are considered assets, and their sale is subject to the 22% capital gains tax. Receiving NFTs may be considered income. Regarding Value Added Tax (VAT), cryptocurrency exchanges are generally exempt, but VAT may apply to other crypto-related services.