Swedish cryptocurrency tax firm Divly has published a new report estimating that only 0.53% of cryptocurrency investors globally paid tax on their cryptocurrencies in 2022; however, tax experts have questioned the figures and methodology.
the divly report published on April 5 obtained the estimate after analyzing the relationship between the number of people who declared cryptocurrencies on their tax returns and the search volume for crypto tax-related keywords in various countries. He also used the number of cryptocurrency holders in each country according to Statesman's Global Cryptocurrency Report on Your Calculations
The report estimates that Finland has the highest proportion of crypto investors who paid the required cryptocurrency taxes in 2022 at 4.09%, with Australia following closely behind at 3.65% respectively.
The United States ranked tenth on the list, with an estimate of 1.62%, Meanwhile, India Indonesia and the Philippines had the lowest rates of tax-paying crypto investors, at just 0.07%, 0.04%, and 0.03% respectively.
The methodology used to arrive at the estimates is questionable. The report itself qualifies the results by noting that the search volume data may not accurately reflect the number of crypto contributorsas not everyone who pays taxes searches online for information related to crypto taxes.
Another assumption in the methodology was that the number of searches related to crypto tax filing did not vary between different countries. Furthermore, he cautioned that there could be a potential bias towards countries with greater internet accessibility and more accurate search volume data.
Danny Talwar, global head of tax at crypto tax software Koinly, questioned the large portion of cryptocurrency investors who do not pay tax that the report suggests. He told Cointelegraph:
โ99.5% likely does not reflect countries that have specific cryptocurrency tax guidance and strict compliance requirements, such as the US, Canada, Australia, and India.โ
Chartered accountant Greg Valles, a board member for Blockchain Australia, also said that he could not "conclusively say that the methodology is 100 percent accurate."
Both tax specialists noted that the government's data surveillance and comparison efforts meant it was becoming increasingly difficult to avoid crypto taxes.
Valles said that as government technology becomes more sophisticated and specialized, it will become easier to spot anyone who does not comply, and warned that those who do not report their crypto earnings now risk catching up with them in years to come.
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Talwar emphasized that although the default risk of cryptocurrencies is comparatively higher than that of other asset classes, tax authorities in many countries have processes in place to obtain data from cryptocurrency exchanges.
He added that Koinly has seen awareness of crypto taxes โincrease considerablyโ among investors in these jurisdictions, with only โ15% of surveyed crypto investorsโ unaware of their crypto tax reporting obligations.
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