Slovak lawmakers voted 112-2 to approve new legislation aimed at reducing taxes related to the sale of crypto or digital assets.
In addition to the aforementioned tax cuts, members of the National Assembly of the Slovak Republic (the country’s parliament) have further approved other measures that will affect cryptocurrency holders.
The National Assembly of the Slovak Republic passed an amendment that would reduce personal income tax on profits from the sale of cryptocurrencies. This tax reduction applies specifically to individuals who have held cryptocurrencies for at least one year.
The recent vote marks the third reading of the bill in the National Assembly. Slovakia’s Ministry of Finance reportedly expects the amendment to have a financial impact of around 30 million euros per year once implemented.
In a major development, the Slovak Parliament recently passed another constitutional amendment that specifies citizens’ right to use cash as a recognized method of payment.
The move comes in response to discussions surrounding the possible introduction of a digital euro. The government’s goal is to ensure that citizens retain the freedom to choose their preferred payment method. Once the constitutional provision is implemented, citizens will be able to choose cash payments.
Cryptocurrency tax rates slashed
Under the new legislation, the tax rate on profits from the sale of cryptocurrencies will be reduced to 7%. This marks a significant decrease compared with the current sliding tax rates of 19% or 25%.
Additionally, the bill includes a provision that would exempt payments up to €2,400 ($2,600) received in cryptocurrencies from tax.
Additionally, the bill addresses health insurance contributions. It specifically excludes income from cryptocurrencies from 14% of health insurance contributions.
As a member of the European Union, Slovakia, like other EU countries, is free to develop its own tax regulations and policies regarding cryptocurrencies.
This autonomy allows Slovakia to set tax rules and to enact rules that will help promote the popularity and adoption of cryptocurrencies within its jurisdiction.
Slovakia is one of 27 member states that has demonstrated a proactive approach to monitoring the progress of the cryptocurrency industry across the region.
EU takes initiative to develop guidelines
The European Union (EU) recently enacted into law the Markets in Crypto-Assets (MiCA) regulations, a landmark set of regulations aimed at establishing Europe as a key hub for digital asset activity.
Contrary to the EU’s proactive moves, other major markets such as the United States have yet to implement comprehensive guidelines for the cryptocurrency industry.
While the United States remains a significant player in the cryptocurrency space, discussions about potential regulation continue. However, Republican lawmakers in the United States have proposed the Digital Asset Market Structure Act, which is currently under review.
