Slovakian legislators have recently approved legislation to regulate and reduce the taxation rate on crypto income. The new law allows crypto assets held for at least a year to be taxed at a favorable rate of 7%, making Slovakia a crypto-friendly country comparable to Slovenia and Switzerland.
The amendment, proposed by Petr Cmorej of SaS, a Slovkian political party, also exempts income from cryptocurrencies from health taxes, with a financial impact of around 30 million euros. Furthermore, payments made in cryptocurrencies up to 2,400 euros will not be subject to taxation and the maximum limit for long-term investment savings in a calendar year has been increased from 3,000 euros to 6,000 euros.
In comparison to other European countries, Switzerland is a prime example of lenient crypto taxation. Cryptocurrency gains are considered tax-free capital gains and any capital losses derived from cryptocurrency trading are not eligible for deduction. This has been a major driver of adoption, making Switzerland the European leader in cryptocurrency adoption for 2023 with a 21% adoption rate. Notable cryptocurrency companies, such as Cardano, Polkadot, Solana, Cosmos, and Tezos, are based in Switzerland.
It is yet to be seen what impact the Slovakian announcement will have on the crypto industry. However, a lower tax rate could lead to greater crypto development and higher user adoption, though this is largely dependent on uncertain regulations.
