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Slovenia discusses new law on taxation of Bitcoin (BTC) and other cryptocurrencies

Thu 28 Oct 2021 ▪ 19h00 ▪ 3 min read — by Rudy Bauer

Slovenia’s Ministry of Finance has posted on its official portal a draft law supplementing the Act on Personal Income Tax in the area of cryptocurrency transactions. According to local media reports, the proposal was submitted for public consultations on 27th October.

What’s the law about?

The draft law provides for 10% taxation for residents of the Republic of Slovenia in case of exchange of cryptocurrencies into fiat currency and in case of purchases with cryptocurrencies. The tax is imposed on the amount of €15,000 (~£10,866) or more per calendar year. The purchase of cryptocurrencies will not be considered an exchange. 

The law will come into force on 1st January 2022 while the Ministry of Finance will accept feedback on the proposal until 10th November. The law would not apply to individuals who hold cryptocurrency as an asset of their businesses, nor would it apply to legal entities. The draft law provides for an alternative income tax option, which would be the difference between the value of the cryptocurrency when purchased and sold. In this case, the tax rate is 25% and the tax exemption for amounts less than €15,000 per year does not apply. This option can also be used by the taxpayers if they suffered a loss when exchanging the cryptocurrency. This loss must be proved to the tax authority.

An individual who fails to provide information on the exchange or purchase of fiat currency for cryptocurrency on his or her tax return is subject to a fine of €250 (~£181) to €400 (~£290). Anyone who provides inaccurate or incomplete information will face a fine of €400 to €5,000 (~£3,622).

Good place for crypto

The Ministry of Finance acknowledges that it has no information on cryptocurrency trading volumes, as most cryptocurrency transactions are processed through foreign exchanges, which usually do not report to the tax authorities. However, they estimate that the state budget revenue from the cryptocurrency taxation law would be between €100,000 and €500,000 per year in the first few years. The 10% tax was initiated two months ago by the Financial Administration of the Republic of Slovenia (FURS). This country is one of the most cryptocurrency-friendly jurisdictions in Europe.

Slovenia has long established itself as one of the leaders in cryptocurrency adoption. According to a report from last year, cafés, restaurants, hotels, hairdressing salons and sports organisations accept various cryptocurrencies for their services.

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Rudy Bauer avatar
Rudy Bauer

Photographe, Vidéaste, webdesigner et enfin rédacteur pour CoinTribune: l'image, le digital et la blockchain sont mon dada.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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