Slovenia getting ready to tax crypto. Will others follow?

cheezcarls

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Quote from: Blawpaw on October 27, 2021, 04:23:22 PM

Slovenia is one of the Cryptocurrency Tigers around Europe. Last April the Finance Ministry of Slovenia proposed a law to levy a 10% tax on all fiat-to-crypto conversions and cryptocurrency transfers. Now the country is getting ready to start taxing cryptos. Given that this will work out as an experiment in the eyes of several countries if everything goes well many other countries in Europe should follow.

Thing is, it puzzles me how are they going to tax cryptos... what sort of technics will the country develop to track all cryptocurrencies in circulation?

Other countries are much worse though, around 30% or more. I am not sure about Slovenia’s specific rules on taxing cryptocurrencies. It’s much worse if they are going to tax unrealized gains like the proposal of Nancy Pelosi in the United States. It’s much more difficult to tax if transactions are done on a P2P basis and not going into centralized exchanges. This is a challenge for the Slovenian government.

As for my home country the Philippines, we can only get taxed once we simply converted crypto to fiat and withdraw it to bank, mobile payment processor, etc., as realized income.

Henrobakkara

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Quote from: crwth on October 28, 2021, 12:20:50 AM

So if I understood correctly, you wouldn't get taxed if you HODL the specific crypto you have, but once you have converted it into cash, that's the time you need to pay taxes. So if you would go through P2P, I think that's where they could get the information on how much to tax on you or something like that. The history of your transactions is in there, so; I think that's where they will go.

I would have thought that using P2P would kind of eliminate that though I don't know. I am thinking this because in my country we are basically trading P2P now and that is just money exchanging hands within the banks with no info about Crypto but the cryptos transactions are in the exchange except of cause, you have to identify what the money transfer was for. Undecided

masterrex

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Is that possible and how they are going to tax crypto, Anyway as I read in the previous comments above they said that each crypto-fiat transaction will be taxed based on that idea I think that's simple but I presume that not all crypto users are using that kind of transaction crypto-fiat because most of the time they only use Stablecoins to convert their cryptocurrencies and then whats next? so that was a complex problem that need some further study before it was implemented.

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Quote from: Woodie on October 31, 2021, 01:15:22 PM

If there is something that our governments can never pass on is a revenue making opportunity and if Slovenia can be successful with its implementation of such a crypto tax system...several countries will want the blueprints of the system used to tax it's people. But because the system could take some time to give the success and true picture of its effectiveness of the system this isn't been adapted by other countries any time soon.

Getting tax from crypto will be another revenue for the country because crypto grew more than a few years ago and the sound is in many countries. If Slovenia has many crypto users, the government can get more sources of income for their country. The other country will look at this step and if its successful as you said, the other countries will take this chance for their country. But I guess many preparations before this plan can be successful and hopefully, it will give more opportunity for crypto to grow.

Ozero

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Quote from: taufik123 on October 27, 2021, 06:22:22 PM

Under the current legal method, authorities analyze individual digital asset activities on a case-by-case basis by screening them through their buying and selling transactions. This can result in a stagnant and tedious crypto administration process.

The introduction of this progressive initiative aims to streamline the process digitally by focusing solely on the purchase of goods and services, or the conversion of crypto assets into fiat currency. In this parameter, individuals will be taxed at a rate of 10% of their income.

They want to emphasize that it is not profits that will be taxed, but rather the amount that Slovenian taxpayers receive in their bank accounts to convert virtual currency into cash or when buy something.

This is a good mechanism for levying taxes on cryptocurrency profits. Cashing out of capital in cryptocurrency anyway occurs by transferring funds to our bank accounts. If the banks themselves deduct 10 percent of such amounts, it will be easy, and the tax is not so big. I think that this is an acceptable option for crypto owners. In this case, it is better to pay these ten percent and sleep peacefully.
States will definitely impose a tax on profits from our activities in cryptocurrency, and this is not unusual. It is only important that this mechanism be convenient and the amount of tax should be small.

Woodie

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If there is something that our governments can never pass on is a revenue making opportunity and if Slovenia can be successful with its implementation of such a crypto tax system...several countries will want the blueprints of the system used to tax it's people. But because the system could take some time to give the success and true picture of its effectiveness of the system this isn't been adapted by other countries any time soon.

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Quote from: cheezcarls on October 31, 2021, 06:39:57 AM

Right here in the Philippines, we don’t have specific tax guidelines on cryptocurrencies yet despite that we are now one of the friendliest countries in this industry. But for now, they said that any realized earnings are subjected to tax (crypto to fiat conversion). It would be so ridiculous if any country in the world would tax even unrealized value of the assets (but what if the price crashed down to Earth?).

Especially this tax rate is quite fixed and in crypto, the number that each user converts as well as invests is absolutely not small, we always convert a large volume with great value, stick to large conversion costs then a very heavy fixed fee on the property, accepting such two parts of the cost, our assets have probably lost a lot of money after the conversions. Not so feasible and when thinking back on the benefits, governments are being quite selfish as they don't invest and contribute but still want the benefits, very against this and users when required to declare tax will evade because crypto allows anonymity

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Quote from: Blawpaw on October 27, 2021, 04:23:22 PM

Slovenia is one of the Cryptocurrency Tigers around Europe. Last April the Finance Ministry of Slovenia proposed a law to levy a 10% tax on all fiat-to-crypto conversions and cryptocurrency transfers. Now the country is getting ready to start taxing cryptos. Given that this will work out as an experiment in the eyes of several countries if everything goes well many other countries in Europe should follow.

Thing is, it puzzles me how are they going to tax cryptos... what sort of technics will the country develop to track all cryptocurrencies in circulation?

Some people thinkit's not a good move for the people who work in cryptocurrency.But it's not a true.The true fact is,it was a good one.We can do transaction in very legal manner.It will find out the scammers in the field.So the people get the trust on online transaction.So many new people get into the crypto.Even many big shot make their investments.It will double or triple the price of bitcoin.

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Quote from: cheezcarls on October 31, 2021, 06:39:57 AM

Right here in the Philippines, we don’t have specific tax guidelines on cryptocurrencies yet despite that we are now one of the friendliest countries in this industry. But for now, they said that any realized earnings are subjected to tax (crypto to fiat conversion). It would be so ridiculous if any country in the world would tax even unrealized value of the assets (but what if the price crashed down to Earth?).

Everyone knows that crypto become a safe haven to avoid tax... some countries have realized this situation long time ago but didnt expect that the popularity to get in crypto businesses increased drastically.

on top of that , it's a complicated one to tax crypto user ..lots of method been applied, yet you cant completely reached the full tax on them.
some tax crypto and consider it as a property , the other consider it as a commodities and so on.
mission impossible but at least government get something than nothing indeed. complicated.

davis196

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I'm confused by this info.
Is this some kind of a 10% transaction tax over all crypto-to-fiat and fiat-to-crypto transactions or is it a new income tax?If this is a new income tax,then why isn't crypto already taxed in Slovenia?
Isn't crypto taxed is almost all countries in the European Union?Why would other countries follow the example of Slovenia,since almost all of them already taxed their cryptocurrency users.
Getting a 10% tax over all transactions seems too much to me.I think that this isn't going to happen.

cheezcarls

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Right here in the Philippines, we don’t have specific tax guidelines on cryptocurrencies yet despite that we are now one of the friendliest countries in this industry. But for now, they said that any realized earnings are subjected to tax (crypto to fiat conversion). It would be so ridiculous if any country in the world would tax even unrealized value of the assets (but what if the price crashed down to Earth?).

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Quote from: DapanasFruit on October 30, 2021, 11:44:34 PM

This is quite expected because the country that allows Bitcoin and cryptocurrency in general to flourish has to take advantage of the opportunity to be making revenues via taxing transactions. But what about peer-to-peer? Am not so sure how the county can be able to implement a tax law with P2P so there is a big possibility that this can be the better option for the many who want to avoid the 10% levy. Personally, the rate is quite hefty maybe they should reduce that to around 3% or 5% at the most. People in cryptocurrency in that country should be making a representations with the government to reduce the rate and make it more acceptable to all parties. Of course, other countries might be already thinking of also establishing their tax policy on the matter.

the possible taxation method can be easily applied to local crypto exchanges because normally local crypto exchanges already require kyc to all their clients. so whenever you convert your crypto to fiat or vice versa, they can already implement such percentage to the local exchange.
however, they may really find hard to implement this on p2p platforms. but if for example, slovenia will find a way how to optimise their method, i am sure neighbouring countries and other countries may follow soon.
even if they will not get the full picture of crypto transactions of their constituents, at least, if they will implement the tax protocol, they will get something from these crypto users, which of course is not favourable from our end.

DapanasFruit

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This is quite expected because the country that allows Bitcoin and cryptocurrency in general to flourish has to take advantage of the opportunity to be making revenues via taxing transactions. But what about peer-to-peer? Am not so sure how the county can be able to implement a tax law with P2P so there is a big possibility that this can be the better option for the many who want to avoid the 10% levy. Personally, the rate is quite hefty maybe they should reduce that to around 3% or 5% at the most. People in cryptocurrency in that country should be making a representations with the government to reduce the rate and make it more acceptable to all parties. Of course, other countries might be already thinking of also establishing their tax policy on the matter.

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Quote from: Hypnosis00 on October 30, 2021, 04:42:31 PM

Quote from: TheGreatPython on October 30, 2021, 03:41:41 PM

Quote from: Blawpaw on October 27, 2021, 04:23:22 PM

Thing is, it puzzles me how are they going to tax cryptos... what sort of technics will the country develop to track all cryptocurrencies in circulation?

In my understating and practical approach they will tax only what are transactions happening through local exchanges or involving bank accounts. If you are holding bitcoin and you are selling it to your friend and your friend pays you in fiat then I guess that you both never need to bother anything on taxation. I am saying all these because this is what exact situation in US states where they have been into crypto taxation for years.

I agree that many country will copy what Slovenia will implement still I guess we need to pay tax for whatever we spend on shops and exchanges but we never need to worry on anything we save in our personal wallets.

We have no way to escape from paying tax even though we use crypto as surely we use exchanges to convert crypto to fiat money and we have to pay some transaction fees that caught up us. It wasn't just Slovenia is practicing this but this was been implemented a long time before. The government uses these banks and local exchanges as the medium to collect tax from their users. 10%, 20% transactions fees? That is huge and have no option but to agree with the term.

For our fiat earnings then theres no way that we could really able to avoid taxes but dealing up with crypto then we could still have at least able to do so and that's the beauty of it on general sense but since regulation becomes more stricter as we do go ahead on future years to come then I wont be surprised that
we would be soon taxed on those local platforms specially when converting your crypto to fiat which it cant really be that avoided.
Taxation is inevitable and this is something that government do always focus on.

Hypnosis00

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Quote from: TheGreatPython on October 30, 2021, 03:41:41 PM

Quote from: Blawpaw on October 27, 2021, 04:23:22 PM

Thing is, it puzzles me how are they going to tax cryptos... what sort of technics will the country develop to track all cryptocurrencies in circulation?

In my understating and practical approach they will tax only what are transactions happening through local exchanges or involving bank accounts. If you are holding bitcoin and you are selling it to your friend and your friend pays you in fiat then I guess that you both never need to bother anything on taxation. I am saying all these because this is what exact situation in US states where they have been into crypto taxation for years.

I agree that many country will copy what Slovenia will implement still I guess we need to pay tax for whatever we spend on shops and exchanges but we never need to worry on anything we save in our personal wallets.

We have no way to escape from paying tax even though we use crypto as surely we use exchanges to convert crypto to fiat money and we have to pay some transaction fees that caught up us. It wasn't just Slovenia is practicing this but this was been implemented a long time before. The government uses these banks and local exchanges as the medium to collect tax from their users. 10%, 20% transactions fees? That is huge and have no option but to agree with the term.

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Quote from: Blawpaw on October 27, 2021, 04:23:22 PM

Thing is, it puzzles me how are they going to tax cryptos... what sort of technics will the country develop to track all cryptocurrencies in circulation?

In my understating and practical approach they will tax only what are transactions happening through local exchanges or involving bank accounts. If you are holding bitcoin and you are selling it to your friend and your friend pays you in fiat then I guess that you both never need to bother anything on taxation. I am saying all these because this is what exact situation in US states where they have been into crypto taxation for years.

I agree that many country will copy what Slovenia will implement still I guess we need to pay tax for whatever we spend on shops and exchanges but we never need to worry on anything we save in our personal wallets.

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Most countries already define Bitcoin (Crypto currencies) as Commodities, so they tax it on Capital gains. Is this 10% on top of the Capital gains that are payable to the tax authorities? So they will have to implement it on the Exchange level and then have the exchanges paying it over to them?

The move, if it is to add it on top of the capital gains... will effectively help Crypto adoption and it's use as a payment option, because people will not convert to Fiat, if they are paying "super tax" on fiat conversions. Wink

(They will rather keep crypto and pay with it directly) Cheesy

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Quote from: Mahanton on October 28, 2021, 04:31:50 PM

Quote from: Blawpaw on October 27, 2021, 04:23:22 PM

Slovenia is one of the Cryptocurrency Tigers around Europe. Last April the Finance Ministry of Slovenia proposed a law to levy a 10% tax on all fiat-to-crypto conversions and cryptocurrency transfers. Now the country is getting ready to start taxing cryptos. Given that this will work out as an experiment in the eyes of several countries if everything goes well many other countries in Europe should follow.

Thing is, it puzzles me how are they going to tax cryptos... what sort of technics will the country develop to track all cryptocurrencies in circulation?

Actually the country where i do live in did really make out that kind of proposed bill about taxation of crypto earnings but it did turn out that everything is still on pending because how it could really be done so? If they would just focus on centralized platforms or wallets on where their citizens been cashing out or making conversion then its possible but in overall filtering then its impossible because there are lots of ways for people to cash out or convert
without passing into these platforms which means they cant really still able to do so but well lets see on how they would be implementing on things.

Expect it in the future that more rules and regulations will be impose just to be able to tax crypto in the future. Maybe as for now your country was having a problem with it but once the law in other countries like Slovenia imposes the same law in your country then there's no limit to how the government want it. And since your country doesn't seem to care that much or maybe they were just making a plan to impose a specific law or just studying how these crypto users get their money to finally detailed their plan about making a rules and regulations.

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Quote from: Blawpaw on October 27, 2021, 04:23:22 PM

Slovenia is one of the Cryptocurrency Tigers around Europe. Last April the Finance Ministry of Slovenia proposed a law to levy a 10% tax on all fiat-to-crypto conversions and cryptocurrency transfers. Now the country is getting ready to start taxing cryptos. Given that this will work out as an experiment in the eyes of several countries if everything goes well many other countries in Europe should follow.

Thing is, it puzzles me how are they going to tax cryptos... what sort of technics will the country develop to track all cryptocurrencies in circulation?

I think this is too much because surely they'll also charge income taxes, right? Or is it going to be the only tax for cryptos, and it will have a fixed rate of 10%? In that case, it's not a bad tax rate. But the problem is that this encourages to sell for fiat on very rare occasions and in big batches because otherwise it'll be hard to pay taxes all the time. Also, it effectively makes crypto to fiat trading impossible, but perhaps it's not a big deal because one can simply use stablecoins for trading.
Some countries already regulate cryptos and imposed taxes on them. As for mine, cryptos aren't fully regulated yet, and while some people pay property taxes on them, that's not really necessary because they haven't been classified for tax purposes yet.

Gyfts

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I'm reading from this source: https://news.bitcoin.com/slovenia-launches-public-consultations-on-crypto-taxation-law/

This isn't technically anything new. From what most countries tax system, if you convert Bitcoin into another currency, you need to pay taxes. If you mine it or receive it exchange for goods/service, it's considered taxable income. Slovenia is looking to clarify their tax system and make the standards more objective it would appear.

The major story would be if they introduced a convoluted tax system or some sort of wealth tax, to some large degree, which would disincentivize anyone to hold any coin. I see this being the way for most countries when they recognize crypto is beginning to displace their traditional currency. We aren't there yet, but when inflation rates continue to rise people will flock away from traditional fiats, and so I predict government will be attempting to increase tax revenue by taxing coin so they can raise the funds and pull people back into fiat.

Topic: Slovenia getting ready to tax crypto. Will others follow? (Read 441 times)