Djibouti

In Djibouti, cryptocurrencies are legal, but the country lacks a specific legal framework or definition for them. This means that general tax laws apply by analogy to crypto assets and activities. There is no dedicated regulatory body specifically for cryptocurrency taxation. General tax matters fall under the Ministry of Budget. While the Banque Centrale de Djibouti acts as the central bank and regulator, it has not issued any formal guidance or regulations specifically addressing cryptocurrencies. When it comes to taxation, gains from selling or swapping cryptocurrencies, whether crypto-to-fiat or crypto-to-crypto, are generally treated as capital gains and taxed at a flat rate of 5%. An exemption applies if the gain is under DJF 1,000. There is no benefit for long-term holding, the 5% rate applies regardless of how long you hold the asset. Income derived from cryptocurrency activities, such as from a business, is subject to progressive individual income tax rates ranging from 2% to 30%. For corporate entities, a flat corporate tax rate of 25% would apply to crypto-related business income. A 7% Value Added Tax (VAT) applies to turnover exceeding DJF 80 million, and this may extend to crypto-related services, though its specific application is unclear. For specific crypto activities, the taxation remains largely undefined. Staking rewards are likely to be taxed as ordinary income upon receipt, though official guidance is absent. Cryptocurrency mining is legal and treated as a business activity, the rewards are considered business income, and associated expenses like electricity and hardware are deductible. However, for decentralized finance (DeFi) activities and Non-Fungible Tokens (NFTs), there is no official guidance, making their taxation status unclear. Crypto-to-crypto transactions are explicitly considered a taxable event, subject to the 5% capital gains tax. Djibouti is undergoing tax policy upgrades. The 2025 state budget introduces a new withholding tax of 0.2% on transfers, including mobile money transfers, with an exemption for amounts under DJF 1,000. While not directly aimed at crypto, this reform may indirectly affect certain crypto-related transfer activities in the future.