Deputies of the National Council of the Slovak Republic approved an amendment to the Income Tax Act. This includes, among other things, a reduction in the tax burden for long-term investors in virtual currencies. At the same time, it also solves the case of taxation when using cryptocurrencies in everyday life. These are not changes only with regard to crypto. The proposal is intended to make it easier for ordinary citizens to invest and save in the framework of long-term investment savings. The proposal already takes into account the planned pan-European pension savings. According to the proponents, the current law on tax on income from securities comes into significant conflict with the goal of supporting voluntary retirement savings.
According to the amendment to the law, the sale of cryptocurrencies should also be subject to the so-called time test. If you hold tokens for more than a year, their sale is subject to a reduced tax rate. Profit is taxed at only 7%. When selling within a year, the rules do not change and you must tax the profit at standard rates. A similar rule applies to income from the sale of capital assets from collective investment instruments. The proposal also includes the option of using purchased tokens for regular purchases. When exchanging tokens for property and services, a new threshold of €2,400 is set for the tax period. If your income from this activity does not exceed the given limit, then there is no need to tax it. You can use crypto-currencies to buy food or drink in a restaurant, for example, without having to deal with taxation immediately.
The National Council of the Slovak Republic is therefore proceeding to change the law with regard to the wider spread of cryptocurrencies also among ordinary citizens. Collective investment instruments are also taken into account. This appears to be a good approach. The adoption of crypto is growing, even if many people still do not believe in them, the trend cannot be ignored in the long term. We will see if the local government will come up with some kind of adjustment that will support long-term investments.
