Exit Tax: What It Is, Where It Applies, and How It Hits Crypto Traders

When you leave a country and take your crypto assets with you, some governments don’t let you walk away without paying up. This is called an exit tax, a one-time tax imposed when you sever tax residency and hold appreciating assets like cryptocurrency. Also known as a departure tax, it’s not about stopping you from leaving—it’s about collecting what they believe you owe before you go. Unlike regular capital gains tax, which triggers when you sell, exit tax hits when you change your legal address—even if you haven’t sold a single coin. Countries like the U.S., Canada, Germany, and the Netherlands have rules that treat your crypto portfolio as if it were sold the moment you move out. That means you could owe taxes on unrealized gains just for packing your bags.

It’s not just about where you live—it’s about what you own. If you held Bitcoin since 2020 and it went from $10,000 to $70,000, and you move to a country with no crypto tax, the U.S. IRS still wants its cut. The same applies if you’re a resident of Germany and hold Ethereum that doubled in value. You can’t avoid this by moving to a tax haven if your old country still considers you a taxpayer until you prove you’ve fully cut ties. Many people think offshore accounts or private wallets hide their assets, but offshore crypto accounts, digital wallets held outside your home country’s jurisdiction. Also known as foreign crypto holdings, they’re still tracked through blockchain analysis and international tax treaties. The IRS, HMRC, and EU tax authorities now share data with exchanges, wallet providers, and even DeFi platforms. Hiding your crypto doesn’t work anymore. What does work? Planning ahead. Some traders sell assets before moving. Others time their exit to coincide with low market prices. A few even delay moving until they’ve held assets long enough to qualify for lower long-term rates.

And it’s not just individuals. Companies relocating their crypto operations face similar rules. If your business moves from Singapore to Dubai but holds $5M in crypto, you might still owe taxes in Singapore. The same logic applies to crypto miners, stakers, and DeFi liquidity providers. The tax system doesn’t care if you’re a hobbyist or a fund manager—it cares about residency, asset value, and timing. That’s why you’ll find real cases in our collection: traders who got hit with six-figure exit taxes after moving to Vietnam, investors who lost funds trying to hide crypto from Russia’s crackdown, and others who thought they were safe until the FCA or SEC caught up with them. These aren’t theoretical risks. They’re happening right now. Below, you’ll see real stories of people who thought they could escape taxes—and what actually happened when they tried.