2024-01-10 12:06:52
In June of last year, the news broke that the Slovak legislature will reduce the tax burden on cryptocurrencies in the country from 36% to 7% as of January 1st. However, the recently adopted consolidation law package revoked these provisions.
Background: Is Slovakia the New Crypto Tax Haven? The burden is reduced from 36% to 7%
At the end of June, the Slovak parliament accepted the proposal, according to which the country’s crypto investors would have received serious tax benefits. Among the favorable conditions was that income from payments with cryptocurrencies would be tax-free up to 2,400 euros, and the concept of staking was also introduced. A 7% tax would have been charged on the sale of cryptocurrencies held for more than a year, which would have been one of the lowest in the world.
The goal of the incumbent government at the time was to encourage investment, simplify the use of financial instruments, and strengthen philanthropic activities.
However, the proposal is roughly it was withdrawn a month ago, so it might not take effect in the new year. In the period before Christmas, the new Slovak parliament adopted a series of laws called the Consolidation Law Package, the aim of which is to attract an additional 1.5 billion euros to the state coffers. The announced crypto law also fell victim to this package.
In addition to restoring the high crypto tax several other taxes were also raised. After dividends, for example, a 10% tax was introduced instead of the usual 7%, alcoholic beverages served in restaurants will be taxed at 20% instead of 10%, and the price of cigarettes will also increase by 40 euro cents per pack from February 1. An extraordinary bank tax was also imposed, which was set at 30%, with a 5% reduction every year until the levy reaches 15%. In addition, the fees for official administration, such as passport applications, are increasing, and the state contribution to private pension funds is also decreasing.
Marián Viskupič, a representative of the SaS, submitted a proposal in favor of keeping the favorable crypto tax, but this was not accepted by the parliament.
Change of government in Slovakia
Elections were held in Slovakia on September 30, 2023, as a result of which Robert Fico – the 2018 to the scandal that arose in connection with the murder of a journalist failed prime minister – returned to power. Due to the divisive crisis management of the Matovič government elected in 2019, and the ensuing government crisis, the country was led by an expert government appointed by the President of the Republic from May 2023.
It was headed by Lajos Ódor, a Hungarian economist from Slovakia, who rose to become one of the country’s most popular politicians during his prime ministership. During their term of office, they also adopted the package of favorable laws in question, but upon their departure, they made proposals to the new government that might consolidate the country’s situation.
The further postponement of the increase in contributions became unsustainable because in mid-December the credit rating agency Fitch downgraded the country’s long-term credit rating from the previous A to A- rating.
Cover image: the atmosphere of the Slovak crypto community is certainly best expressed by the Čumil statue in Bratislava.
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