New taxation of cryptocurrencies in Slovakia

On 30 September 2022, Act No. 595/2003 Coll. on Income Tax, as amended, was amended by an act that also amends and supplements certain other acts. This act governs income taxes, and its most recent amendment concerns a change in the taxation of income from cryptocurrencies.

The most significant changes concern above all the taxation of acquired cryptocurrencies and their conversion into fiat currencies (real money).

Until now, the law only covered the situation where a cryptocurrency is acquired by buying it (in exchange for real currency or goods/services) or by mining it. The amendment also covers acquiring cryptocurrencies through “staking”. Staking is a process in which a user “lends” their own cryptocurrency for a certain short time and, once the pre-agreed period has elapsed, is paid a reward in the form of additional tokens of the cryptocurrency. This income will therefore be taxed in the same way as cryptocurrency obtained by mining – it is stated in the tax return and the tax rate is then determined from the total tax base. The rate depends on the amount of the taxpayer’s total income and can be 19% or 25%. Cryptocurrencies acquired by mining or staking will therefore also be taxed at that rate.

HODL PAYS OFF THE MOST

Long-term holders of cryptocurrencies have reason to be pleased, as a so-called time rule is being introduced for them. This means that if a cryptocurrency has been held for longer than 12 months, its sale meets the condition for applying a tax rate of 7%.

The amendment also affected the taxation of income from cryptocurrencies with regard to exchanging them for services, goods or other cryptocurrencies (except exchange for a stablecoin). Only income from exchanging cryptocurrencies for fiat currency (money) or for a stablecoin (a cryptocurrency pegged to a fiat currency) should remain subject to income tax.

However, the proposal mentioned does not provide for a reduction in the contributions paid to the health insurance company, which remain unchanged at 14%.

You can view the entire bill at NRSR.SK