Slovenia plans a sub 5% tax on all crypto transactions

The Slovenian government has proposed a flat rate of just under 5% for all kinds of cryptocurrency transactions and exchanges. The government is pushing the Slovenian parliament to quickly approve of the same, according to an official government release.

The move is part of the government’s initiative to “debureaucratise” or reduce the complexity of the administrative procedures in the crypto system and to improve its global position in the cryptocurrency markets.

“The draft Act on the Debureaucratisation of Taxation of the Redemption of Virtual Currencies introduces the obligation to pay tax on the value of cashed virtual currencies in an administratively simple and understandable manner and to provide general government revenue from such taxation,” the release said.

The government noted that there is increasing uncertainty in global financial markets where virtual currencies are gaining traction.

“Legislation in this area will contribute to Slovenia’s more competitive position in the field of taxation of virtual currencies,” the Slovenian government said.

What are the tax rates in India, US, UK and Netherlands? 

While the tax rules by Slovenia propose a flat sub-5% cut on every transaction undertaken, back in India, the tax deducted at source on every transaction is 1%, and however, the Indian government levies a 30% tax on profits made through digital assets such as cryptocurrency. Additionally, losses in one digital asset cannot be offset against another income source. Finance Minister Nirmala Sitharaman had mentioned the new tax rule in this year’s Budget speech.

Meanwhile, Rajya Sabha MP Sushil Kumar Modi on Wednesday, suggested that crypto incomes should be taxed at 50%. The MP likened cryptocurrency transactions to gambling and horse racing. He also said that the government should discourage and disincentivise trading and investing in crypto assets.

Currently, in the US, its citizens pay tax on crypto assets ranging from 0 to 37%, as cryptocurrency, there is categorised as property, what this means is that cryptocurrencies and non-fungible tokens will get the same capital gains tax treatment meted out to stocks. The US also provides leverage for losses, by offering to offset income tax by a maximum of $3,000, depending on the loss.

In the UK, the tax for cryptocurrencies is either 20% or 10%, depending on if you are a basic rate taxpayer or a higher/additional rate taxpayer. 

In the Netherlands, the process is fairly complicated, as an individual’s income is taxed at multiple rates and through multiple methodologies.