Slovenia getting ready to tax crypto. Will others follow?

[Mahanton]

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.

[avikz]

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?

Crypto tax will soon become a reality around the world. There are still many countries who don't recognize cryptos but soon they will be forced to recognize crypto and that will happen in very near future.

It's quite easy for a government to lavy taxes. They will allow only a handful of exchanges to operate in their country and laxy taxes on them which in turn will be levied to the end users. That's it! But 10% tax is quite less I would say, compared to the global standard!

[Welsh]

Trading of anything including cryptocurrencies have always been subject to taxation. I've even seen up to 30% tax on trading profit. A lot of countries already have such taxes on cryptocurrency trading so it is not a new thing for "others to follow" after Slovenia does it since they are already behind themselves.
As for "transfers" you can't tax them at all unless they tax the businesses accepting bitcoin payments for each payment which is a different story.

I was also under the impression that most countries have a dedicated system in place specifically for cryptocurrencies, and if they haven't then any profits would be subject to income or capital gain tax, which might not be specifically for cryptocurrencies, but it would apply since you've made a profit. I think most countries have gone away from only taxing Bitcoin once it has been converted.

Also, if you mean transfers as in sending other users Bitcoin, then I wouldn't have thought they could tax that, since you aren't taxed that with fiat currencies. You should only be taxed on your profit; though how much completely depends on the country that you reside in.

[Kelvinid]

The government had imposed taxes on these legit exchanges and the way to cover up those taxes they pay for them, that they have to ask for a share from their clients/users and traders. That is why we should have not wondered why these exchanges will ask for huge fees or commissions when having used them. I think some people don't feel it as it seems to be normal but I think this is what really happens and we as users had suffered most than these exchanges.

[masphie]

Before discussing taxes, we must first see if crypto is legal in the country...
If it is legal, it may be natural for the state to collect taxes from fiat to crypto transactions or vice versa.
But if it's not legal, I don't think it will tax crypto transactions.

[haidil]

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?

The obvious policy difference is that it is extremely difficult to apply a crypto tax on the level of digital asset traffic without any oversight. It is puzzling how the government in Slovenia announced a crypto tax on decentralized wallets.
Except for traffic from bank accounts to exchanges.

Income from crypto that the government can control? can be effective as a share for the state?

[taufik123]

-snip-
If not, then the only method I can think of is that crypto enthusiast will have to report it to their local tax authorities. Now, it's just the question of morality, are you going to report your personal crypto profits or not? Are you willing to take the risk and hide before the authorities have to find it out?

The answer is no. Traders or investors with multiple cryptocurrencies will not report their crypto wealth just like that, because they know the taxes they will pay are quite large.
Reporting crypto wealth to local authorities will reveal everything that is held on the crypto platform.
Hiding may not be an option, but if there isn't a really appropriate method, it's still free to report it or not.

some large transactions involving crypto may be detected, but other transactions will be difficult to detect, so need another really efficient method to regulate and detect crypto transactions that will be taxed.

[masterrex]

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?

IMHO, I think it will be a very challenging task for Slovenian tax authorities, and it is a very difficult thing to do that all crypto transactions will be taxed, Anyway, it's too early to judge them so let them work first and conduct that experiment and if the government of Slovenia will successfully implement that plan to tax all crypto transactions, I'm, sure many countries will follow it and use the same method as well.

[mindrust]

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?

Eventually the others will follow yes. You didn't think the current state of chaos in crypto would last forever, did you? As crypto gets adopted, it is only natural for the governments to want to tax them. Otherwise it wouldn't be fair to the other investments. You make money from owning stocks, you get taxed, why wouldn't you when you make money from crypto? It is the same thing.

[Vaskiy]

Governments opposed bitcoin and other cryptocurrencies just because they can't have control over it. Even now to certain extent it is possible to tax, countries like USA have channelized the crypto related activities. This gives them better outcomes compared to the rest of the world. Israel at the very beginning imposed tax considering it similar to digital gold.

Transition in the usage happens with time, Slovenia is very less populated. Just around 2 million is the population of Slovenia. In such countries it is possible to make effective functioning of tax over crypto activities. It isn't possible to follow the same with grown or countries with increased population.

[Wind_FURY]

a law to levy a 10% tax on all fiat-to-crypto conversions and cryptocurrency transfers.

Trading of anything including cryptocurrencies have always been subject to taxation. I've even seen up to 30% tax on trading profit. A lot of countries already have such taxes on cryptocurrency trading so it is not a new thing for "others to follow" after Slovenia does it since they are already behind themselves.

As for "transfers" you can't tax them at all unless they tax the businesses accepting bitcoin payments for each payment which is a different story.

High tax on cryptocurrency to fiat conversions actually encourages what Bitcoiners preach, and makes it the best solution, “the HODL”, and use Bitcoin ONLY if you need censorhip-resistance.

Plus Taproot will make Bitcoin more private.

https://braiins.com/blog/explain-like-im-not-a-developer-taproot-privacy

[bL4nkcode]

Not surprising at all, imposing tax will be available to other countries too soon as they regulate and accept crypto. Fiat to crypto is subject for taxation but for a transfer? That's insane and absurd.
Buying or paying (sending to business) is considerable but for a transfer/giving/sending only? Nah.

[Shenzou]

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 that they will be going through the same routes that the IRS said they will in the us, ever since the cryptocurrency has became a highly active and profitable industry, they aught out to make regulation through income taxes, first the IRS said that they will go through the route of passing a law to make a lot of KYC exchanges and wallets like coinbase will report your trades and transactions, and other ways is if you are buying some expensive things even if you used a peer to peer exchange to fiat you would be subject to audit, it may seems difficult from our point of view for them to tax crypto but with how big it is becoming it may create some future problems, that i am sure that they will be addressing it and creating a proper infrastructure to control it and tax it, but at least they are not banning it like many other countries that don't have to tools or the budget to allocate to do such things.

[livingfree]

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?

Maybe with their local exchanges, everyone who is registered on that exchange is already subject to taxation for any amount of profit they get. We don't like to be taxed in crypto as this is why it's made to be against centralization that includes tax.

But I think that it can't go further without the government doing this. In the US AFAIK, you're required to declare it to the IRS how much you've made in crypto so this can also be like there in Slovenia.

[dupee419]

Not surprising at all, imposing tax will be available to other countries too soon as they regulate and accept crypto. Fiat to crypto is subject for taxation but for a transfer? That's insane and absurd.
Buying or paying (sending to business) is considerable but for a transfer/giving/sending only? Nah.

The government here in my country is also starting to regulate cryptocurrency through the exchange of crypto to fiat, and no matter how much we complain about it, these governments will still find a way to actually gain profit from us sadly.

[Gyfts]

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.

[kryptqnick]

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.

[Oceat]

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.

[Kakmakr]

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

[TheGreatPython]

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.