Slovakia lowers taxes on crypto profits

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

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

This is similar to how capital gains taxes work, but this only pertains to crypto. The idea of taxing crypto like a stock or any other security naturally brings up questions about how the asset should be defined. The SEC, for example, is solidly in the “most crypto assets are securities” camp. However, if nations regarded crypto assets as being more akin to fiat currencies (i.e. commodities), the tax policies could be far different.

The bill will exempt crypto income from a 14% health insurance tax — as long as it isn’t marked as the business property of an investor, according to the bill. 

The Slovak National Council issued a statement explaining that the bill’s goal is to “to reduce the tax burden in connection with the sale of virtual currencies, thereby simplifying their use in everyday life.”

The bill was passed 112-2, though 144 lawmakers voted present, essentially declining to make their voice heard on the matter.

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

The country’s 2023 budget, which was passed last November, allows the government to levy a 28% tax on income from digital assets that are held for under a year. Past the 365-day mark, citizens can profit off of crypto tax free, still making Portugal a desirable place for long-term holders.

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