Slovenia Proposes 25% Tax on Cryptocurrency Profits
Slovenia’s Ministry of Finance has introduced a draft proposal aimed at imposing a 25% tax on profits derived from the sale of cryptocurrencies. This move is poised to redefine Slovenia’s reputation as a potential tax haven for digital asset investors, as it seeks to eliminate the current exemption enjoyed by individual crypto traders. In contrast, businesses are already subject to taxation on similar financial activities.
Impact on Individual Crypto Investors
Under the proposed guidelines, Slovenian citizens will be required to pay 25% tax on their earnings when converting cryptocurrencies into traditional currencies, such as euros, or when utilizing digital currencies to purchase goods and services. The objective is to establish a fair taxation system that aligns with the taxation of conventional investments, which are already extensively taxed.
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A noteworthy aspect of the draft legislation is the tax exemption for exchanging one cryptocurrency for another. This mirrors a trend being observed across Europe, where countries strive to strike a balance between fostering innovation and meeting tax revenue requirements.
Increased Record-Keeping Obligations
If the bill is enacted, cryptocurrency holders will face new documentation requirements. Individuals would need to maintain detailed records of all transactions and submit annual tax forms by March 31, documenting their activities from the previous year. Additionally, businesses accepting over €500 in cryptocurrency payments will have added reporting responsibilities.
Notably, the bill excludes central bank digital currencies, electronic money, security tokens, and NFTs from this tax regime. These exceptions are consistent with the European Union’s MiCA regulation and the Organization for Economic Cooperation and Development’s CARF framework standards.
Transition Relief with ‘Reset’ Provision
To ease the transition to the new tax regime, the proposal includes a ‘reset’ provision for existing cryptocurrency holders. Digital assets acquired before 2026 will have their cost basis reset to their value on January 1, 2026. This provision ensures that early investors won’t be taxed on gains that occurred before the implementation of the new tax rules.
The Finance Ministry projects that the new tax could generate between €2.5 million and €25 million annually. However, this estimate relies on the unknown number of Slovenians holding crypto assets and their potential value.
Public Consultation Period
The government has opened the proposal for public feedback until May 5, with plans to implement the law by January 1, 2026, pending parliamentary approval. This initiative marks a significant shift for Slovenia, which has been perceived as a crypto-friendly destination. Under current regulations, profits from cryptocurrency trading are exempt from tax, provided the activity doesn’t qualify as a “permanent business activity” – a term that lacks precise definition.
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