Crypto Goes Global: Why International Tax Compliance Matters More Than Ever

As cryptoassets continue to break down geographical barriers, tax authorities worldwide are working hard to catch up. From casual investors using offshore exchanges to companies running crypto-related operations across multiple jurisdictions, international tax issues are quickly becoming one of the most complex—and overlooked—areas in the digital asset space. 

Why International Crypto Tax Is a Big Deal 

Crypto might live on a decentralised ledger, but your tax obligations are very much grounded in the real world. And if you’re earning, trading, holding, or using crypto across borders, you could be creating tax obligations in more than one country—whether you realise it or not. 

Let’s break down some of the key challenges. 

1. Residency, Domicile & Where You Owe Tax 

Crypto creates unusual residency problems. For instance: 

• You might reside in one country but earn staking rewards on a platform based in another. 

• You may have wallets or exchanges registered abroad, leading to tax-reporting obligations outside your home country. 

• If you move between countries while actively trading or earning crypto income, your residency status can change mid-year, triggering unexpected tax liabilities. 

Understanding the tax rules in both your current and previous countries of residence is critical, especially for frequent travellers, digital nomads, or expats holding significant crypto assets. 

2. Offshore Exchanges & Wallets – Not So Private Anymore 

Many crypto users still operate under the assumption that offshore wallets or exchanges mean tax secrecy. That’s no longer the case. 

With initiatives like: 

• CARF (Crypto-Asset Reporting Framework) 

• CRS (Common Reporting Standard) 

• FATF (Financial Action Task Force) guidelines 

…tax authorities are beginning to automatically exchange information about cryptoasset ownership and activity. This means a transaction done on a foreign exchange today might be reported to your local tax authority tomorrow. 

Bottom line: Holding crypto overseas does not shield you from domestic tax reporting requirements. 

3. Double Taxation Risk – Without Treaties, You Could Pay Twice 

One of the biggest headaches in cross-border crypto is the risk of being taxed twice—once where the income or gain arises, and again where you’re tax-resident. 

Example scenarios include: 

• Earning yield or mining rewards from a platform based overseas 

• Selling tokens through a foreign exchange 

• Receiving airdrops or NFTs as compensation for services rendered globally 

Tax treaties between countries may offer relief—but only if you claim them properly, with the right disclosures and documentation. Not every treaty covers crypto clearly, so expert advice is often essential. 

4. International Crypto Businesses Need Even More Caution 

For crypto-focused businesses operating internationally—whether it’s exchanges, custodians, DAOs, or blockchain developers—the risks multiply. 

Key considerations include: 

• Transfer pricing if assets move between entities in different countries 

• Permanent establishment risk where digital presence or personnel triggers tax exposure abroad 

• Accounting for crypto differently under local GAAP vs IFRS, leading to different tax treatments 

Poor structuring can lead to disputes with multiple tax authorities—or worse, non-compliance. 

5. How to Stay Ahead: Practical Steps 

Here’s how individuals and businesses can prepare: 

• Keep clean records: Every transaction, wallet, exchange, and token – with timestamps and fiat equivalents. 

• Know your tax residence: And how it might change if you’re mobile. 

• Use professional tools: Crypto tax software that tracks across jurisdictions. 

• Get advice early: Especially before relocating, launching an international product, or scaling a global crypto business. 

• Review reporting obligations annually: As tax laws and reporting frameworks continue to evolve. 

Final Word: Crypto Is Global, But Tax Is Local 

The era of crypto flying under the radar is ending. Tax authorities are increasingly connected, and frameworks like CARF are ushering in a new age of transparency. 

Whether you’re an individual holding tokens abroad, a digital nomad with wallets on multiple chains, or a business earning revenue globally—international tax compliance is now a must, not a maybe. 

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DISCLAIMER

© My Accountancy Team 2025 All Rights Reserved – The above articles are provided for guidance only and may not cover your personal circumstances so you should not rely on them. It is important that you seek appropriate professional advice which takes into account your personal circumstances where you can provide the full facts of the case and all documents related to your case. My Accountancy Team Ltd t/a mycryptotax.co.uk, cannot be held responsible for the consequences of any action or the consequences of deciding not to act.