- Slovakia slashes crypto taxes to an impressive 7%, providing a significant reduction from the previous rate of 39%.
- The new law declares that exchanging one crypto for another will be considered a non-taxable event.
- The new legislation allows tax-free purchases of goods and services using crypto up to €2400 per year.
Slovakia has recently made headlines with the passing of a bill that significantly reduces the tax burden on cryptocurrencies. The new legislation, set to take effect on January 1, 2024, aims to create a more favorable environment for cryptocurrency users and promote the adoption of digital assets within the country. The details were shared by Peter Kris, the founder of Mangata Finance.
Big news from my home country Slovakia!Slovakia just passed a bill that will lower the tax on crypto from 39% to 7%The new law outlines that:– holding crypto after 1 year results only in 7% tax– crypto to crypto exchange is non taxable– crypto to stablecoin exchange is… pic.twitter.com/wSWRJpDVPN— Peter Kris (@uPeterKris) July 2, 2023
The new law recently passed in Slovakia brings significant changes to the taxation of cryptocurrencies. Effective January 1, 2024, the legislation introduces several key provisions. Firstly, holding cryptocurrencies for more than a year will now incur a reduced tax rate of only 7%, a considerable decrease from the previous rate of 39%. Additionally, the law clarifies that exchanging one cryptocurrency for another will be considered a non-taxable event, eliminating the tax burden associated with such transactions.
However, exchanging cryptocurrencies for stablecoins, which are pegged to traditional fiat currencies, will be subject to taxation, although the specific tax rate remains unspecified. The legislation also allows individuals to make tax-free purchases of goods and services using cryptocurrencies, up to a total value of €2400 per year, promoting the utilization of digital assets for everyday transactions.
Finally, the law states that staking rewards will be taxed only when they are converted to fiat currency or stablecoins, providing clear guidelines for the taxation of staking activities. These new measures aim to create a more favorable environment for cryptocurrency users and stimulate the adoption of digital assets in Slovakia.
The tweet generated significant attention, catching the eye of Binance’s CEO, Changpeng Zhao. He raised a query regarding the functioning of tax payments when residents directly pay for items using BTC or BNB. While Kris did not respond to Zhao’s question, it prompted another crypto influencer to ask Zhao about his preference between BTC and BNB. Zhao replied that he consistently uses BNB but includes BTC in his questions as a sign of respect.
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