Slovakia Lowers Taxes on Crypto Profits

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Slovakia has overwhelmingly passed a bill amending its income tax laws to have a much more favorable rate for those trading cryptocurrencies.

Slovaks will now be taxed at 7% on profits they make from selling cryptos they have held for at least a year. Previously, the rate was 19% or 25%.

This is similar to how capital gains taxes work, but only applies to crypto. The idea of ​​taxing crypto like a stock or any other security naturally raises questions about how the asset should be defined. The SEC, for example, is solidly in the camp of most crypto assets. However, if nations considered crypto assets to be more akin to fiat currencies (i.e. commodities), tax policies could be very different.

The bill will exempt crypto income from a 14% health insurance tax as long as it is not marked as the commercial property of an investor, according to the bill.

The Slovak National Council has released a statement explaining that the aim of the bill is to reduce the tax burden associated with the sale of virtual currencies, thereby simplifying their use in everyday life.

The bill passed 112 to 2, although 144 lawmakers voted present, essentially refusing to have their voices heard on the issue.

With the passing of the bill, Slovakia could become another desired European destination for those looking to trade crypto. This is particularly noteworthy given that Portugal, previously recognized as a crypto tax haven, has recently chosen to adjust its approach in this regard.

The country’s 2023 budget, which passed last November, allows the government to levy a 28% tax on income from digital assets held for less than a year. Beyond 365 days, citizens can enjoy crypto tax-free, which still makes Portugal a desirable location for long-term holders.

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