Introduction
As the popularity of cryptocurrency grows in Greece, the question of how to tax these digital assets remains uncertain. The lack of clear guidelines and regulations on crypto tax in Greece has led to confusion among both individuals and businesses who own and trade in these assets.
While the European Court of Justice has classified Bitcoin as a means of payment, exempting it from value-added tax at the supply level, there are no laws or provisions outlining the crypto tax in Greece.
In this article, we will explore the current state of crypto tax in Greece and the potential implications for those involved in the industry.
Crypto and Greece
As the use of cryptocurrency continues to spread globally, it has also made its way into Greek society in recent years. The main drivers of its growth in Greece have been high taxes and the COVID-19 pandemic, leading to an uptrend in the number of people interested in mining cryptocurrency.
While the average Greek may not have a deep understanding of cryptocurrency, it is estimated that a significant percentage of the population in Greece is involved in trading it on various platforms.
Mining cryptocurrency, however, can be a costly and energy-intensive endeavor for individual Greeks. The cost of purchasing the necessary mining equipment and the rising costs of electricity in Greece make it difficult for citizens to engage in this activity. Large businesses, on the other hand, may have more resources and the ability to attempt it.
As the use of cryptocurrency grows in Greece, the authorities have primarily been focusing on combating money laundering rather than setting general rules and regulations on crypto tax in Greece and officially recognizing them as investment products.
The European Court of Justice has classified Bitcoin as a means of payment, meaning that its purchase and sale are not subject to value-added tax at the supply level. However, the Greek tax system does not have any laws or provisions that outline the taxation of cryptocurrency, specifically regarding profits from its sale.
Some accounting firms have interpreted that profits or capital gains from the sale of cryptocurrency could be taxed at a rate of 15% (capital gains tax). However, this interpretation has not been officially established anywhere and it is recommended that cryptocurrency holders follow it in order to avoid potential exposure to tax authorities.
It remains to be seen how the Greek authorities will eventually address the issue of crypto tax in Greece and whether they will officially recognize it as an investment product. Until then, the use of cryptocurrency in Greece will likely continue to be influenced by the high taxes and the pandemic, as well as the lack of clear guidelines on its taxation.
Tax Laws for Miners
Cryptocurrency mining can be expensive, with the cost of computer equipment for mining Ethereum, for example, reaching almost €20,000. It also requires a large amount of electricity, with a mining rig consuming 4,800 watts and costing approximately €1,000 per month in electricity expenses in Greece.
The average cost of Ethereum at €2,000 means that a miner can mine 65% of one cryptocurrency coin in 30 days, which is worth €1,600, resulting in a net monthly profit of €600 after electricity expenses.
Cryptocurrency mining is financially out of reach for many people in Greece, including upper-middle-class EU citizens. There is no way to accurately measure the number of individuals or companies mining cryptocurrency in Greece due to the anonymous nature of the activity.
There are few Greeks who own cryptocurrency “mining farms,” and all of them are located outside of the country due to high electricity costs. Professional miners often hire a team of people to maintain and expand their investment, using large computers on a 24/7 basis.
Miners are typically paid through a process called “Proof of Work,” which is verified through transaction verification on a blockchain cryptocurrency network, such as Ethereum. They are compensated for their computer power through the payment of cryptocurrency. The fees they receive are stored in a digital wallet, where each miner can increase their share of cryptocurrency. In order to convert their cryptocurrency into traditional currency, such as euros or dollars, they must register with a digital exchange office.
Cryptocurrency gains can only be taxed once they are converted into traditional currency and deposited into a bank account. In Greece, they are taxed at the standard rate of 22%. For companies with cryptocurrency accounts, the only way to avoid taxation is to exchange them for products that accept crypto payments. If the use of cryptocurrency continues to grow at its current rate, it may become a common source of unregulated, non-taxed transactions.
Despite the financial barriers to mining cryptocurrency in Greece, there has been a significant increase in interest from women in the country, with a growth of 163.67% in 2020, according to a study by Bitcoin.com. This was the highest percentage in Europe. The number of bitcoin ATMs in Greece also increased to at least five around the country in the same year.
Conclusion
In conclusion, crypto tax in Greece remains a murky and uncertain area. While the European Court of Justice has classified Bitcoin as a means of payment, exempting it from value-added tax at the supply level, there are no clear guidelines or regulations on the taxation of cryptocurrency profits in the Greek tax system. This lack of clarity has caused confusion among individuals and businesses who own and trade in these digital assets.
Until the authorities establish clear rules and regulations on crypto tax in Greece, it will be difficult for those involved in the industry to navigate the tax landscape. It is to be seen how the issue of crypto tax in Greece will be addressed and whether these digital assets will eventually be officially recognized as investment products.