Cryptocurrency investors and traders in various countries are now paying tax as governments start recognising cryptos as an asset class
The financial authority in Slovenia, the Financial Administration of the Republic of Slovenia (FURS), is working on introducing a 10% tax on income bill for digital currency investment and trading. The tax is set to apply to individuals and corporations who spend cryptocurrencies or turn them into fiat currencies.
FURS shared its proposal with a local media outlet, with the financial body set to make changes to its operations. Under the current law, FURS analyses an individual’s cryptocurrency activity on a case-by-case basis by going through their trading history. However, this process is tedious and can sometimes hit sticking points.
The new legislation is seen as a progressive movement as it aims to digitally streamline the process of cryptocurrency taxation in Slovenia. The process will see tax efforts focus solely on buying goods and services using cryptocurrencies and converting the assets to fiat currencies. The proposed tax rate would be a flat 10% on cryptocurrency transactions.
The financial body said it would like to point out that the tax is not on profits but instead, the amount a Slovenian tax resident receives in their bank account once they convert their cryptocurrencies to cash or when they purchase goods and services.
Slovenia has been one of the most progressive cryptocurrency countries in Europe over the past few years. According to financial research firm Crypto Head, Slovenia is currently the seventh-ranked country globally in terms of “crypto-readiness”.
Several tax agencies across the globe are starting to roll out tax regulations to guide cryptocurrency investors and traders. The cryptocurrency space has experienced massive growth over the past few years, with the total market cap now above $2 trillion.
Thanks to this massive growth, tax agencies are starting to claim revenue on behalf of governments from crypto traders and investors. While crypto regulations remain unclear in various countries, taxing crypto incomes could imply that cryptocurrencies are recognised as an asset class.