Slovakia Halts Crypto Tax Reform Amid Government Shake-Up
Slovakia’s newly elected government has unexpectedly put the brakes on planned tax reforms aimed at reducing taxes on cryptocurrency gains for individuals. This decision comes as the country continues to grapple with one of the highest tax rates on crypto in the world.
Tax Burden on Cryptocurrency Profits
As things stand, individual taxpayers in Slovakia face a daunting 34% or progressive 40% tax rate on Bitcoin and other cryptocurrency profits. This includes a mandatory 15% health insurance contribution, bringing the total tax liability to a staggering 49%.
Taxable Events
The following events are considered taxable in Slovakia:
- Selling cryptocurrencies for fiat currencies, resulting in nominal profit
- Exchanging one cryptocurrency for another, with the nominal profit since acquisition considered taxable
- Buying physical products or services using cryptocurrency, with nominal profit since initial acquisition taxed
- Staking and interest payments on cryptocurrencies
Corporate Tax Rates
Businesses, both private and publicly traded corporations, face a different tax landscape. They do not have to pay the health insurance contribution, but still face capital gains tax rates of 15% or progressive 21%.
Tax Comparison
Here is a comparison of tax rates for individuals and corporations in Slovakia:
| Tax Rate | Individual | Corporation |
|---|---|---|
| Capital Gains Tax | 34% or 40% | 15% or 21% |
Progressive Taxation
Slovakia’s tax system features two tiers of capital gains tax, with rates increasing as income exceeds certain thresholds.
Tax Payment Deadline
Both capital gains and health insurance taxes on cryptocurrency profits are due by the end of March each year, with some flexibility for individuals and corporations with cross-border revenue.
In light of these complex regulations, it is essential to consult a professional or accountant to ensure accurate tax compliance.