Slovenia: new law to regulate crypto
Slovenia: new law to regulate crypto
Regulation

Slovenia: new law to regulate crypto

By Riccardo Mangiapane - 1 Sep 2021

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The Slovenia Press Agency (STA) has reported news of a new proposal from the Financial Administration of the Republic of Slovenia, or FURS, which wants to increase regulation of crypto and make this market more controllable.

Slovenia, a growing country

Slovenia, although small, is one of the fastest growing countries in Europe, especially in the financial and crypto sectors.

In this regard, it is important to mention that Slovenia is the country with the highest market capitalization per capita of blockchain projects, with an average of 14.5 blockchain companies per million inhabitants.

Moreover, the capital Ljubljana has several Bitcoin ATMs and several merchants that claim to accept Bitcoin or other cryptocurrencies.

Changing crypto regulation in Slovenia

The FURS has proposed to change the way cryptocurrency income is taxed so that a 10% tax rate is imposed when digital currency is spent on goods or exchanged for cash.

The Slovenian Revenue Agency intends to implement the new tax regime through the adoption of legislative amendments, and this measure, according to the analysis made, should make tax reporting related to cryptocurrencies easier.

This is because the tax administration, thanks to the new law, will no longer have to examine numerous transactions made by a taxpayer between the purchase and sale of the digital currency.

Through the digitisation of the process, the authority will focus exclusively on the purchase of goods and services or the conversion of cryptocurrencies into legal currencies.

According to current regulations in Slovenia, FURS analyses an individual’s activity in digital resources on a case-by-case basis, which can result in a lengthy and inefficient administrative control process. As a rule, for example, individuals have to pay tax on capital gains from the sale of cryptocurrencies when they realise income as a business activity.

However, even under the new tax rules, a cryptocurrency investor would still have to prove any losses incurred, and as a result the process would again require multiple transactions to be verified.

In an interview published by the STA, representatives of the tax administration stated:

“We would like to emphasize that it is not profit which would be taxed but rather the amount a Slovenian tax resident receives on their bank account on turning the virtual currency into cash or when buying a thing”.

 

Riccardo Mangiapane

Graduated in Management and Finance at LUMSA University in Rome. Passionate about fintech and crypto, he follows with interest the events in the financial markets, cooperating as part of a team in the analysis of several case studies during his academic career.

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