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I need a crypto-exit plan.
- Thread starter 321run
- Start date
It will take at least 3 years to become non tax resident, and you also face an exit tax (that can be avoided if you don't sell for 5 years after you've become non tax resident).
Alternatively you can become tax resident in a country where there is a tax treaty that covers capital gains, and that also is not a credit treaty where you'd only get credit for the tax paid in the other country against your Norwegian taxes.
Is it not possible to do this another way? I will sell out of my position in the coming months. I really do not want to tax 22%.
Legally? No, there isn't. Pay the 22% or pack your bags.
You can also park it all in the stable coins like USDC and USDT, it will also give you interest, pretty high yields in blockfi.com, kucoin, hotbit, kraken. Stake some of it in strong long term crypto projects for yields, and park some in stablecoins for great %, if you have enough amounts this can be your monthly income for all basic needs just from the interest earned that you can spend with crypto debit cards and cash out in small amounts (paying the 22% tax on these random small amounts seems not too bad, you cash out for daily needs while still parking most of it in stablecoins).
And you can do that for several years while you are moving to some tax friendly places like UAE or Montenegro etc'. I personally plan to live permanently in Montenegro to benefit from their 9% flat tax on both income and capital gains taxes, which is pretty good. Also getting residency is easy. But I'm also from a good country that doesn't hunt you down like the US IRS does, so I'm lucky to not be American (despite I'm a US resident now [H1B worker], but a year after the relocation I will not be tax resident of US anymore, so I'll start using my parked stablecoins safely for various larger purchases like a house and a car, but until then will just rent stuff and travel a bit in neighboring EU countries).
Also keep in mind that by giving away the 22% you help your country, probably healthcare for someone is being paid from this, and not wars in Iraq are funded by that money. Some countries tax up to 45% and 50% and that's where it becomes slightly unfair, it's too much for hard earned income to be taxed so high. 10-20% seems fair if the country is good and cares for its citizens (unless you have ideological problems with what the tax money is used for, I'd say pay some tax on some amounts that you withdraw, it's not a big deal unless you must withdraw hundreds of thousands ASAP for some larger purchases, or millions).
And you can do that for several years while you are moving to some tax friendly places like UAE or Montenegro etc'. I personally plan to live permanently in Montenegro to benefit from their 9% flat tax on both income and capital gains taxes, which is pretty good. Also getting residency is easy. But I'm also from a good country that doesn't hunt you down like the US IRS does, so I'm lucky to not be American (despite I'm a US resident now [H1B worker], but a year after the relocation I will not be tax resident of US anymore, so I'll start using my parked stablecoins safely for various larger purchases like a house and a car, but until then will just rent stuff and travel a bit in neighboring EU countries).
Also keep in mind that by giving away the 22% you help your country, probably healthcare for someone is being paid from this, and not wars in Iraq are funded by that money. Some countries tax up to 45% and 50% and that's where it becomes slightly unfair, it's too much for hard earned income to be taxed so high. 10-20% seems fair if the country is good and cares for its citizens (unless you have ideological problems with what the tax money is used for, I'd say pay some tax on some amounts that you withdraw, it's not a big deal unless you must withdraw hundreds of thousands ASAP for some larger purchases, or millions).
by the way when you exit positions, do you actually exit into fiat or stablecoins? IMHO exiting to stablecoins and waiting for a good next entry point in the next crypto winter is a good choice, at least for some % of the funds, unless you really need all of it for real life purchases in an urgent manner. Next cycle also supposed to be good
I'm definitely stashing at least 50% of this bull run earnings in stablecoins for the entry positions in the next run 3-4 years from now. Until then, it is safe, and also pays interest. Companies like BlockFi and Coinbase won't go anywhere, billion valuation companies that are backed by VC and really strong finances, they'll survive any crypto winter and I easily can trust them for hundreds of thousands (I would be careful to trust millions but I don't have millions, so my thought process is at a different scale than probably others are in. For mid 6 figures it seems a good strategy, but I'm just learning as well ).
https://news.bitcoin.com/economist-bitcoin-isnt-too-big-to-fail-btc-governments-allow-it/Bitcoin is not Too big to Fail.
Always Invest in any crypto by assuming that It can goes to Zero.
CoinBase IPO does not provide safety.
Lehman Brother, Enron, Dot Com bubble anymore...
Thanks
Always Invest in any crypto by assuming that It can goes to Zero.
CoinBase IPO does not provide safety.
Lehman Brother, Enron, Dot Com bubble anymore...
Thanks
you're welcome. one thing I noticed about stablecoins and the US tax laws for example is if you enter with stablecoin and exit , you have no capital gains tax (unless you withdraw more than what you invested) so up to the exact same amount you've put "in" , you can get "out" with 0% tax legally in US (not an adviser lol but that's what I've read on IRS site itself about the crypto rules they came up with). Might be worth to check exact Norway rules about gains tax and what it applies to, it could help to plan properly in the near future.
One more option that I'm personally looking at, is Montenegro, since they officially don't tax or regulate the crypto industry yet, based on my research, so whatever you put into their banks from crypto services, might just be considered foreign earned income and not be taxed at all (they're happy whenever people bring money into the country, like in Thailand, so they won't bother bugging you as long as you "bring and spend") or taxed by their 9% which is pretty low rate (I'm still researching this all myself, so please double check anything I say).
I would not park all my capital in stable coins.
USDT is not backed 1:1 with USD; and I doubt its backed in other assets that are worth 45 Billion.
So just be careful with that, and maybe split it in many stable coins.
Also as said before there is always a risk of BTC failing or that these companys fail and loose your funds.
So just split your money and don't have it all laying on one platform.
What about Croatia? As far as I know: crypto profits are classified as capital gains, and they are taxed with 10% income tax and 0%-1,8% municipal tax, depending on your residence. And if you keep them for more than 2 years, there is no tax.
The advice in this thread is terrible. You need to find the best Norwegian tax lawyer you can afford and explain your personal crypto trading/investment situation (of which no one here is aware) so they can advise you. Then you need to get them to read through all the Norwegian tax treaties with countries that wont tax crypto disposals that you would be willing to move to. Within one of those treaties (probably an old one) may be an article that allows the transfer of taxable rights from "the disposal of assets or income not expressly mentioned” from Norway to the new country. You can then move to the new country and dispose of your cryptos there tax free. Only an expert Norwegian tax lawyer can confirm whether this is possible because it comes down to the legal terms of the DTA.
@travelES only @Sols made the best advice, haha.
Technically Norway has the right to tax you on your current crypto holdings no matter if you leave the country for ever or not. Because you earned it while being in Norway, right? So technically relocating would make you liable to exit tax for the value of your crypto on the leaving date. By the way this is also the big flaw in those systems which say "come to country XX and don't pay crypto tax", yes don't pay tax for the gains after you relocated, but they never tell you about the exit tax for the gained value during your stay in for example Norway.
You can hide your tax liability, but it's never 100% legal. If you want to stay legal or not is up to you.
Technically Norway has the right to tax you on your current crypto holdings no matter if you leave the country for ever or not. Because you earned it while being in Norway, right? So technically relocating would make you liable to exit tax for the value of your crypto on the leaving date. By the way this is also the big flaw in those systems which say "come to country XX and don't pay crypto tax", yes don't pay tax for the gains after you relocated, but they never tell you about the exit tax for the gained value during your stay in for example Norway.
You can hide your tax liability, but it's never 100% legal. If you want to stay legal or not is up to you.
Thats not true. International law trumps domestic law. Norway can pass any domestic tax law they want but an unamended DTA will have legal precedent. Thats why he needs to go through each DTA to see if therein lies an opportunity. Until then no one knows.
@travelES . If the cryptos have been acquired while he was in Norway he has to exit tax them. The way he writes he even owns them personally, so not even a chance to deduct them by invoices. Only possibility is a holding period which may make them tax free, don't know if Norway has this or not. It even may go as far as he has to pay interest on non realized crypto gains. For example he leaves Norway on 1.1.2021 and at this day his cryptos are worth 10k, but sells his crypto in for example cyprus at 1.1.2025 for 20k, he would have to pay interest on the 10k.
And this is very common in whole europe. We will see a lot of wet eyes from some crypto guys who thought going to cyprus for a bit will be the holy grail of 0% crypto tax....
https://www.dlapiper.com/en/us/insi...-modifies-exit-tax-rules-to-comply-with-ec__/
And this is very common in whole europe. We will see a lot of wet eyes from some crypto guys who thought going to cyprus for a bit will be the holy grail of 0% crypto tax....
https://www.dlapiper.com/en/us/insi...-modifies-exit-tax-rules-to-comply-with-ec__/
@neweraoffshore
Thanks for the link. Yes many countries are adopting exit taxes and a litany of other rules and regulations. That changes nothing however from the fact that an unammended DTA - perhaps even 30+ years old - takes legal precedent.
"The tax treaties are not the same, and Norway’s right to taxation for the various incomes will therefore vary from treaty to treaty. Many tax treaties do not regulate assets and wealth. In these cases, Norway has a right to impose taxes on global wealth as long as you’re resident for tax purposes according to the Taxation Act (section 2-1). When you’re resident for tax purposes in both countries, your residential status must be determined in accordance with the provisions of the tax treaty's article concerning residence for tax purposes (usually, Article 4). Residence under the tax treaty will be of significance in determining which income can be taxed in Norway."
https://www.skatteetaten.no/en/pers...ence-in-norway-when-moving-to-or-from-norway/
Thanks for the link. Yes many countries are adopting exit taxes and a litany of other rules and regulations. That changes nothing however from the fact that an unammended DTA - perhaps even 30+ years old - takes legal precedent.
"The tax treaties are not the same, and Norway’s right to taxation for the various incomes will therefore vary from treaty to treaty. Many tax treaties do not regulate assets and wealth. In these cases, Norway has a right to impose taxes on global wealth as long as you’re resident for tax purposes according to the Taxation Act (section 2-1). When you’re resident for tax purposes in both countries, your residential status must be determined in accordance with the provisions of the tax treaty's article concerning residence for tax purposes (usually, Article 4). Residence under the tax treaty will be of significance in determining which income can be taxed in Norway."
https://www.skatteetaten.no/en/pers...ence-in-norway-when-moving-to-or-from-norway/
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