Slovakia’s legislators have consent The new legislation, which received 112-2 votes in favour, aims to lower taxes associated with the sale of cryptocurrency or digital assets.
In addition to the aforementioned tax reduction law, members of the National Assembly of the Slovak Republic, the country’s parliament, passed additional measures affecting cryptocurrency holders.
The National Assembly of the Slovak Republic passed the amendment that will result in a reduction in personal income tax on profits generated from the sale of cryptocurrencies. This tax abatement applies specifically to individuals who have held cryptocurrency for at least one year.
The final vote marked the third reading of the bill in the National Assembly. According to reports, the Ministry of Finance of Slovakia expected that the amendment, once implemented, would have a financial impact of approximately 30 million euros annually.
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In an important development, the Slovak Parliament recently passed another amendment to the constitution. This amendment specifically codifies the right of citizens to use cash as a recognized method of payment.
This action comes in response to discussions about the possible introduction of a digital euro. The government aims to ensure that citizens retain the freedom to choose their preferred method of payment. Citizens will be able to choose to pay cash after it is implemented in the constitution.
Drastically reduce crypto tax rates
Under the new legislation, the tax rate on profits gained from selling cryptocurrencies will be reduced to 7%. This is a significant decrease compared to the current tiered tax rates of 19% or 25%.
Moreover, the bill includes a provision that payments received in cryptocurrencies of up to €2,400 ($2,600) will be exempted from tax.
Moreover, the bill also addresses the issue of health insurance fees. It specifically excludes income derived from cryptocurrency from being subject to a health insurance contribution of 14%.
As a member state of the European Union, Slovakia, like other EU countries, is free to set its own tax regulations and policies for cryptocurrency.
This autonomy allows Slovakia to create tax bases. It can craft rules that help boost the popularity and adoption of cryptocurrencies in its jurisdiction.
Slovakia is among the 27 member states that are demonstrating a proactive approach to monitoring developments in the digital currency industry across the region.
The European Union is taking the lead in drafting the guidelines
The European Union (EU) recently enacted the Markets in Crypto Assets (MiCA) Regulations into law. This landmark set of regulations aims to make Europe a prominent hub for digital asset activities.
In contrast to the EU’s proactive approach, other major markets such as the United States have not yet implemented comprehensive guidelines for the cryptocurrency industry.
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While the United States remains an important player in the cryptocurrency space, there is an ongoing discussion about potential regulations. However, Republican lawmakers in the United States have proposed the Digital Asset Market Structure Bill, which is under review.
Featured image from UnSplash, chart from TradingView.com
