coinspress.com
Slovakia's recent legislation has been passed to regulate and tax cryptocurrency income at a reduced rate. Under the new law, crypto income from assets held for over a year will be taxed at 7%, a significant decrease from the current 19% or 25% rates.
This lower tax rate aligns Slovakia with other crypto-friendly countries in the region, such as Slovenia and Switzerland. The Ministry of Finance has estimated that this amendment will have a financial impact of approximately 30 million euros annually.
Furthermore, lawmakers in Slovakia have introduced tax exemptions for crypto payments. The Ministry of Finance predicts a budget surplus of 300 million euros this year. In an effort to support the crypto industry, lawmakers have made favorable tax laws. Alongside these changes, there have been amendments in investment savings regulations.
The National Council of Slovakia, the country’s legislative body, recently modified the crypto tax legislation, which was immediately implemented. The amendment stipulates that cryptocurrency payments of up to 2,400 euros will be exempted from income tax. This provision establishes a tax-free threshold for small, everyday crypto transactions. Additionally, crypto income is exempted from the 14% health insurance tax.
This development is a significant win for cryptocurrency adoption in Slovakia. While the country is still in the process of establishing a comprehensive regulatory framework for the crypto industry, lawmakers acknowledge the long-term potential of cryptocurrencies and aim to foster an environment conducive to their growth.
As crypto adoption continues to increase worldwide, countries are vying to become leaders in the blockchain industry. For example, after receiving royal assent, the UK recently finalized a bill granting regulators the authority to oversee cryptocurrencies and stablecoins.
The reduction in the tax rate is intended to attract more crypto companies and encourage widespread cryptocurrency usage within Slovakia. As other European countries strive to position themselves as cryptocurrency hubs, it is likely that similar amendments to crypto tax policies will be introduced elsewhere.
Governments are utilizing tax policies as a means to gain a competitive advantage and attract crypto businesses. Consequently, other countries are expected to follow Slovakia’s lead and lower their crypto tax rates to compete on a global scale.