STA, 4 February 2021 - The Finance Ministry has unveiled a new draft law on cryptocurrency taxation. It proposes a 10% taxation rate and a general tax exemption on up to EUR 10,000 of redeemed cryptocurrency per year. The ministry expects public feedback by 21 February.
The proposal regulates the tax on cryptocurrencies, which are defined as a digital form of currency without an official status, issued neither by a central bank nor by another public authority.
The proposed solutions would apply to all natural persons who pay taxes in Slovenia, but not to legal persons and natural persons that hold cryptocurrencies as a business asset.
A natural person who buys and sells cryptocurrency in their own name and on their own account would not be considered to be carrying out a business activity, regardless of the number of cryptocurrency transactions carried out.
Under the proposal, the tax would be paid on the value of the cryptocurrency transactions realised in a calendar year. The exchange of cryptocurrency into fiat currency and the purchase of goods, services or other property with cryptocurrency would all count as redemption.
Meanwhile, a tax exemption would apply to a maximum of EUR 10,000 of the total amount of cryptocurrency realisations in a single calendar year.
The tax base would be determined by deducting the amount of the exemption from the sum of the value of all redemptions in a calendar year.
The resulting positive difference would then be reduced by normalised costs equal to 50% of this difference, with a tax rate of 10%.
If a person were to make a loss in a calendar year, they would have to prove this loss to the authorities and report it on their tax return.
Individuals would have to calculate the tax themselves, as the sum of the value of tax for each realisation of cryptocurrency during a calendar year. They would have to submit the data in an online tax return by 28 February for the previous year.
An individual who fails to submit a tax return or to provide adequate documentation for a set period of time could face a fine of between EUR 250 and EUR 400, while those who submit incomplete or false data could face a fine of up to EUR 5,000.
The Finance Ministry estimates that under this proposal, the state budget revenue would amount to between EUR 100,000 and EUR 500,000 per year in the first few years.
The first proposal on cryptocurrency taxation was put forward by the ministry in October last year.
At that time, the proposal also provided for a 10% tax for natural persons in the case of exchanging cryptocurrency for fiat currency and purchases made with cryptocurrency, without normalised costs.
The threshold for tax liability was set at EUR 15,000.
An alternative option offered at the time was to pay tax on the profits made, which would be the difference between the value of the cryptocurrency at the time of realisation and at the time of acquisition.