Lawmakers in the National Council of the Slovak Republic voted in favor of the crypto tax bill that could broadly incentivize crypto transactions.
A recent development in Slovakia has emerged as a positive turn for the crypto industry in the region. Lawmakers in the National Council of the Slovak Republic have approved the much-awaited crypto tax bill. According to the regulation, crypto taxes would be lowered along with other provisions.
The crypto tax bill specifically engages in personal income tax arising from the sale of crypto. But crypto holders would have to hold their crypto for at least a year to avail the benefits of the proposed bill. The taxes on the sale of crypto would be effectively lowered to 7%, decreasing from the current sliding scale on the taxes of 19% or 25%.
“When selling virtual currency after one year has passed since its acquisition, it is proposed to tax income at a tax rate of 7%,” said the bill’s official text. Meanwhile, crypto assets held for less than a year would attract the usual taxes on income.
Members of the National Council said the bill would aim to simplify crypto usage by reducing its tax burden, promoting its adoption.
The bill includes other aspects, such as no taxation for an entity or individual who receives crypto worth up to $2600. Crypto income arising from a contribution of 14% to health insurance would also be non-taxable. Reports have suggested the financial implications on the government from the tax cut would be to the tune of 30 million Euros.
After considerable discussions, the National Council of Slovakia passed the bill on its third reading. With the latest move, Slovakia could assume the role of a crypto-friendly hub in the near future. Several European countries have taken pro-crypto initiatives, which could attract crypto firms to the region.
The European Union also passed the landmark Markets in Crypto-Assets (MiCA) Act recently, which has been considered a milestone by the industry. Crypto firms could aim to set shop in the European Union with the new law set to provide better regulatory clarity.
Countries like the United States have been providing a contradictory picture of the issue of crypto regulation. While several senators have voiced their support for crypto, authorities like the US Securities and Exchange Commission are yet to provide their views on a better regulatory framework.
On the other hand, the crypto market has risen by a significant margin in 2023, recovering its losses from the previous year. Bitcoin is up by over 80%, while the crypto market’s capitalization has crossed $1.2 trillion. A spot Bitcoin ETF application filed by Blackrock has also generated much enthusiasm from all stakeholders of the crypto market, contributing to the bullish signals.