Vanuatu

In Vanuatu, cryptocurrencies are legally defined as intangible digital assets under the Financial Transactions Licensing Act No. 9 of 2021. The country operates a regulated environment for virtual assets, featuring a dedicated legal framework for Virtual Asset Service Providers (VASPs) that includes specific requirements for licensing, reporting, and adherence to anti-money laundering and counter-financing of terrorism (AML/CFT) standards. The Vanuatu Financial Services Commission (VFSC) serves as the primary regulatory body. It is responsible for licensing VASPs and enforcing the relevant legislation, notably the Virtual Asset Service Providers (VASP) Act 2018, which has been updated. For tax residents in Vanuatu, the taxation of cryptocurrencies is structured to be highly favorable. There is no individual income tax, capital gains tax, or specific income tax applied to crypto earnings. This means that profits generated from selling, swapping, or simply holding cryptocurrencies are entirely tax-free, irrespective of how long the assets were held. This zero-tax approach extends to income earned from staking, mining, and participating in decentralized finance (DeFi) activities. Gains derived from Non-Fungible Tokens (NFTs) are also not taxable, although NFT marketplaces fall under VASP regulation. Transactions involving the conversion of crypto to fiat currency, or crypto-to-crypto swaps, do not constitute a taxable event. For businesses, International Business Companies (IBCs) that do not conduct operations within Vanuatu are exempt from corporate tax for a period of up to 20 years, subject to an annual fee. While the general Value Added Tax (VAT) rate in Vanuatu is 12.3%, the specific application of VAT to cryptocurrency trading or services is not clearly defined. A significant development in Vanuatu's regulatory landscape for digital assets is the updated Virtual Asset Service Providers (VASP) Act, which passed in March 2025, further enhancing the comprehensive framework for virtual assets.