On October 26, the Finance Ministry of Slovenia launched a public consultation on proposed legislation on cryptocurrency tax, according to local media.
The proposed legislation was to address the problem of taxing cryptocurrency circulation, which is estimated in Slovenia to be worth tens of thousands of euros.
Cryptocurrencies have grown in popularity in the nation in recent years, with hundreds of businesses and other merchants now accepting Bitcoin Cash payments.
If passed into law under Slovenia’s Income Tax Act, the proposed measure would levy a 10% tax on all fiat-to-crypto conversions and cryptocurrency transfers.
The tax obligation level is applied to investors who stay under the limit. The government has previously stated its motivation for enacting the crypto tax.
“We would like to emphasize that it is not profit which would be taxed but rather the amount a Slovenian tax resident receives on their bank account on turning the virtual currency into cash or when buying a thing.”
The Slovenian draught crypto tax law would only apply to the acquisition of goods and services, as well as the conversion of crypto assets into fiat currency.
While the finance ministry's proposal is anticipated to be approved by Nov. 10, the law would go into force on Jan. 1, 2022.
The measure would also force Slovenian people to compute the tax based on the current value of the cryptocurrency at the time of redemption and acquisition.
Investors will also be required to pay a 25% tax on unrealized profits calculated by measuring the price difference between the acquisition and selling of cryptocurrency.
Individuals who fail to comply with their tax duties will face fines ranging from 250 euros ($290) to 5,000 euros ($5,795) on an individual basis.
According to a Chainalysis study, Europe's crypto addition drive is exploding. Between July 2020 and June 2021, the central, northern, and western regions of Europe (CNWE) received more than $1 trillion in digital assets, according to the analysis.
As a consequence, CNWE accounted for 25% of worldwide cryptocurrency activity.