Authorities in Slovenia are reportedly seeking public consultation on a draft bill related to how cryptocurrency holdings and transactions are taxed in the country, according to local media reports.
The Finance Ministry’s move comes more than a month after the Financial Administration of the Republic of Slovenia (FURS) proposed a 10% tax on cryptocurrency activities.
“We would like to emphasize that it is not profit which would be taxed but rather the amount a Slovenian tax resident receives on their bank account on converting crypto assets into fiat money
or when purchasing goods” Total Slovenian News quoted FURS as saying previously.
If signed into law under Slovenia’s Income Tax Act, the bill will impose a 10% tax rate on every fiat-crypto conversion and payments made with cryptocurrencies. However, the yearly threshold for tax liability has been set at €15,000 (approx. $17,500). Investors within the limit will be exempted from crypto taxes.
The Finance Ministry has estimated that the tax might accumulate between €100,000 ($116,000) and €500,000 ($580,000) yearly within the first few years after its introduction.
According to Cointelegraph, the proposed bill would also require Slovenian citizens to calculate the tax by considering the real-time value of crypto at the time of redemption and acquisition.
“Investors will also need to pay a 25% tax on unrealized gains by calculating the price difference during the purchase and sale of cryptocurrencies. Individuals failing to comply with tax obligations will be fined between 250 euros ($290) to 5,000 euros ($5,795) on a case-by-case basis.”
Slovenia has established itself as a leader in crypto adoption in Europe. Over 1,000 locations including cafés, restaurants and hotels, across the small Southeast European country are accepting various cryptocurrencies, according to a 2020 report.
Meanwhile, a 12-country Redfield & Wilton Strategies survey of more than 31,000 EU residents revealed that that most Europeans prefer cryptocurrencies to be regulated and taxed by individual countries rather than the EU. According to the same survey, most Europeans said they would prefer local cryptocurrencies over the proposed digital euro.
Most of the respondents cited a lack of knowledge and understanding of crypto technology and investing when asked why they don’t yet own cryptocurrencies.