TL;DR Breakdown
- Slovenia’s ministry of finance wants to roll out a new crypto tax law.
- The crypto tax law will target crypto to fiat conversions.
- The new law is set to go live in January 2022.
With cryptocurrencies already achieving mainstream adoption worldwide, various countries are looking for ways to get the most from the assets. Asides from the fact that some countries are still planning to release their CBDC, most of them are already taxing crypto gains. In a recent report, the Ministry of Finance in Slovenia has announced that it is seeking consultation with the public regarding a new crypto tax law. This recent draft bill is coming a month after the country’s government announced a 10% levy on crypto activities. The previous bill was released as a means to limit investor sentiments in crypto across the country.
New crypto tax law mandate
If the new crypto tax law is eventually passed, crypto traders across Slovenia will have to pay a 10% tax on every conversion they make. The ministry will also levy a 10% tax on payments for goods or services made via crypto across the country. However, the ministry has made it easier by announcing a new threshold of $17,387 regarding crypto liability in a year. Provided investors stay within that limit, they will not have to pay the 10% tax.
In a previous memorandum, the ministry already cleared the air regarding how they intend to levy the tax on crypto traders. In the memo, the ministry pointed out that it will not tax the profits from a trader’s investments. It pointed out that the only taxable form of income is the exchange of crypto to fiat for saving or purchasing products.
Defaulters will be punished
In the early parts of this year, a previous report across media pointed out that the Slovenian government was planning to tax only purchases via crypto and exchanges from crypto to fiat. Though the new proposal was to be enforced by November 10, it is set to go live in January 2022. This new tax will also see crypto users across Slovenia consider the price of a digital asset when purchasing and selling when calculating their tax. Also. Crypto traders paying the 25% unrealized gains tax must consider the difference in the amount they bought and sold the digital asset.
According to the ministry, any crypto holder who defies the new crypto tax law will be liable to pay a fine between $290 to $5,795, depending on the severity of the case. A previous Chainalysis study highlighted the massive growth in crypto adoption across Europe since the beginning of the year. In the report, Central, Northern, and Western Europe were the big players, receiving digital assets worth $1 trillion over a year from June 2020 to July 2021. With that, all the parties involved we’re responsible for 25% of crypto activities carried out over that time.
