Slovenia is turning to cryptocurrency to help close gaps in its tax system, as Finance Minister Klemen Boštjančič has proposed a 25% tax on profits earned by investors in the sector.
According to a draft law, the levy is set to take effect on January 1, 2026 and would apply only to profits made when individuals sell crypto for fiat currency or use it to purchase goods and services. However, exchanging one cryptocurrency for another would remain exempt from taxation.
A survey on consumer payment attitudes in the euro area, conducted by the European Central Bank, shows that Slovenia has the highest share of cryptocurrency owners in the region. In 2023, 15% of adults in Slovenia held digital currencies, up from 8% in 2022.
“Slovenia Targets Tax Fairness with New Crypto Law, Not Revenue” -Says Finance Minister
The new draft law, which applies to profits from converting cryptocurrencies into fiat currency or using them to purchase goods and services, and does not apply to crypto-to-crypto exchanges, mirrors the definitions introduced under the EU’s Markets in Crypto-Assets (MiCA) regulation and the OECD’s Crypto-Asset Reporting Framework (CARF).
The proposed tax is currently under public consultation until May 5, 2025. If approved, it will come into effect on January 1, 2026. The government estimates that the tax could generate between €2.5 million and €25 million annually, depending on market activity.
However, Finance Minister Klemen Boštjančič insists that the goal of the taxation is not to generate revenue but to establish fairness in the tax system. He stated, “The goal of taxation of crypto assets is not to generate tax revenue, but we find it illogical and unreasonable that one of the most speculative financial instruments is not taxed at all.” , According to Cointelegraph.
How Other Countries Tax Cryptocurrency: A Global Snapshot
United States
The U.S. Internal Revenue Service treats cryptocurrency as property. Profits from selling, spending, or trading crypto are subject to capital gains tax, and it varies depending on the holding period and income.
United Kingdom
In UK Crypto is subject to capital gains tax when sold or exchanged. Additionally, income tax may apply to activities like mining, staking, or receiving crypto as payment.
Germany
Berlin offers one of the most favorable systems in Europe based on the law of crypto is tax-free if held for over one year. However, if sold within a year, gains above €600/year are taxable.
India
The Indian government imposes a flat 30% tax on crypto gains, regardless of holding period, along with a 1% tax deducted at source on each transaction, which significantly affects active traders.
Japan
Crypto earnings are classified as miscellaneous income and taxed aggressively, with rates reaching up to 55%, including trading profits, mining, and staking income.
Italy
Italy is the country with the highest taxes in Europe rate on Crypto. Under recent budget reforms, crypto gains are taxed at a rate of 26%, but high-value or frequent traders can face rates of up to 42%, depending on how activity is classified.
Australia
Australia considers crypto a capital gains asset. Investors are taxed when selling or trading crypto, while those involved in mining or business-related crypto use may face income tax.
South Korea
South Korea mandates strict compliance and registration for crypto platforms. Taxation on individuals is under development, but capital gains taxes of 20% on profits exceeding KRW 2.5 million were proposed.
Where Digital Profits Stay Untouched?
Portugal
Portugal is one of the most crypto-friendly countries in Europe. Individual investors do not pay capital gains tax on profits from crypto trading, provided it’s not part of a business activity. However, businesses dealing in crypto are subject to corporate tax.
United Arab Emirates (UAE)
The UAE, particularly Dubai and Abu Dhabi, offers a 0% tax on personal crypto income and capital gains. With free zones like DMCC and ADGM promoting blockchain innovation, it has become a major crypto hub in the region.
Switzerland
Switzerland treats crypto as a private asset, which means individual capital gains are tax-free. However, wealth tax may apply depending on total holdings, and mining or professional trading is taxable as income.
El Salvador
As the first country to adopt Bitcoin as legal tender, El Salvador offers no capital gains tax on Bitcoin transactions. The government actively encourages crypto investment with residency incentives for Bitcoin investors.
Malta
Already known as the “Blockchain Island,” Malta exempts long-term holdings of crypto from capital gains tax. However, trading considered a business activity is subject to income tax and the Mediterranean country has a regulatory framework encouraging blockchain startups.
Georgia
Georgia does not tax crypto profits for individuals, and mining operations have historically enjoyed low electricity costs. While businesses may be taxed, personal crypto transactions remain untaxed, making it attractive to retail investors.
