STA, 7 April 2022 - The government on Thursday adopted a bill that would impose a 5% tax on natural persons when they turn their cryptocurrency into a fiat currency or buy goods or services, but only if the sum exceeds EUR 10,000 a year.
The government proposed the bill be rushed through the National Assembly. When passed, the tax would apply to the sums redeemed since the date it came into effect.
The Finance Ministry estimates the budget receipts from the new taxation would amount to at least EUR 1 million a year in the first few years.
A release from the government says the bill tackles taxation of virtual currencies on redemption "in an administratively simple and understandable way" while securing fiscal revenue resulting from the tax.
"The regulation of this area will improve Slovenia's competitive position in taxation of virtual currencies, especially in light of the increasingly uncertain situation on the global financial markets, where virtual currencies are gaining ground, which also increases the opportunity costs borne by the state due to untimely taxation of this new source of tax revenue," the release reads.
The new tax would apply to natural persons who pay taxes in Slovenia when they exchange cryptocurrency for a fiat currency and transfer the proceeds to a transaction account or buy goods, services or other assets with cryptocurrency.
The tax would not apply to legal entities which have cryptocurrency recorded as their assets or for individuals who hold cryptocurrency as their business assets.
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.
The tax liability would arise the moment the virtual currency is redeemed, unless in case of a proven loss. At the same time, each natural person could redeem EUR 10,000 worth of virtual currencies a year tax-free.
The tax base would be determined by deducting the EUR 10,000 exemption from the sum of the value of all the cryptocurrency liquidated in a calendar year. Of that base 5% tax would be paid.
The individuals concerned would be able to submit a tax return once a year or each time after liquidating virtual currency. At any rate they would be required to pay tax within 30 days after submitting the return.
The government proposes the law take effect on the 15th day after its publication in the Official Gazette. Even though it would not be valid for the entire calendar year of 2022, the government proposes the exemption apply in the full EUR 10,000 even that year.
Individuals who do not have a business currently do not pay tax for turning cryptocurrencies into liquidity. The Financial Administration examines case by case whether the person is involved in business activity, taking into account the number of transactions and the sum liquidated.
