• Slovakian lawmakers voted 112-2 in favor of a law intended to cut taxes on the sale of digital currency.
• The income tax bill aims to reduce the tax burden for those holding crypto longer than a year by taxing it at 7%.
• European Union member states such as Slovakia are free to set their own tax rules for crypto, offering a way to boost crypto popularity.
Slovakian Crypto Tax-Cutting Bill Passes National Parliament
Lawmakers in Slovakia have passed a law that will cut taxes on digital currencies held longer than one year. By a vote of 112-2, the National Council’s third reading of the bill was successful and is expected to significantly reduce the tax burden associated with virtual currency transactions.
The new law proposes that when selling virtual currency after one year has passed since its acquisition, it should be taxed at only 7%, whereas other taxable incomes may be subject to different rates of taxation. This measure is aimed at providing relief to those who use cryptocurrencies in their everyday life and simplifying their use overall.
EU Member States Setting Their Own Rules
As an EU member state, Slovakia is able to set its own rules regarding taxation and this could potentially lead other countries in Europe to follow suit and offer similar incentives for those investing or trading cryptocurrency within their borders. Portugal is already known for having favourable conditions when it comes to crypto taxation but recently announced plans to reverse these policies.
The new legislation could bring many benefits aside from simply reducing the tax burden associated with crypto transactions; it could also bolster the popularity of virtual currencies in Slovakia and attract more people interested in utilizing them as an alternative form of payment or investment vehicle.
The passing of this bill marks an important milestone in terms of how cryptocurrencies are treated within the EU legal framework and could pave the way for other countries across Europe following suit with similar measures designed to foster innovation within the sector without sacrificing regulatory standards.