Lawmakers in Slovakia have approved new legislation, with a resounding 112-2 vote in favor, aimed at reducing taxes associated with the sale of crypto or digital assets.
In addition to the aforementioned tax-cutting law, members of the National Council of the Slovak Republic, the country’s parliament, have further endorsed additional measures that impact cryptocurrency holders.
The National Council of the Slovak Republic passed the amendment that will result in a reduction of personal income tax on profits derived from the sale of cryptocurrencies. This tax reduction specifically applies to individuals who have held the cryptocurrencies for a minimum period of one year.
The recent vote marked the third reading of the bill in the National Council. According to reports, the Ministry of Finance in Slovakia has projected that the amendment, once implemented, will have a financial impact of approximately 30 million euros per year.
In a significant development, the Slovakian parliament recently passed another amendment to the constitution. This amendment specifically codifies the right of citizens to utilize cash as a recognized payment method.
This action comes in response to discussions surrounding the potential introduction of a digital euro. The government aims to ensure that citizens retain the freedom to choose their preferred form of payment. Citizens will be able to choose cash payment after it has been implemented within the constitution.
Drastic Reduction In Crypto Tax Rates
Under the new legislation, the tax rate on profits gained from the sale of cryptocurrencies will be reduced to 7%. This marks a significant decrease compared to the current sliding scale tax rates of 19% or 25%.
Moreover, the bill includes a provision that exempts payments received in cryptocurrencies up to 2,400 euros ($2,600) from taxation.
Furthermore, the bill also addresses the issue of health insurance contributions. It specifically excludes income derived from cryptocurrencies from being subject to a health insurance contribution of 14%.
As a member state of the European Union, Slovakia, like other EU countries, has the freedom to establish its own tax regulations and policies concerning cryptocurrencies.
This autonomy allows Slovakia to create tax rules. And it can formulate rules that are conducive to promoting the popularity and adoption of cryptocurrencies within its jurisdiction.
Slovakia is among the 27 member states that demonstrate a proactive approach to monitoring the advancements within the cryptocurrency industry across the region.
EU Takes Initiative In Forming Guidelines
The European Union (EU) recently enacted the Markets in Crypto-Assets (MiCA) regulations into law. This landmark set of regulations aims to establish Europe as a prominent hub for digital asset activities.
In contrast to the European Union’s proactive approach, other major markets like the United States have not yet implemented comprehensive guidelines for the cryptocurrency industry.
Related Reading: FTX Puts Sale Of $500 Million Stake In AI Firm Anthropic On Hold
While the US remains an important player in the crypto space, there is an ongoing discussion of potential regulations. However, United States Republican lawmakers have proposed the Digital Asset Market Structure bill, which is under review.
Featured image from UnSplash, chart from TradingView.com