In an important move for the regulation of the cryptocurrency market, Slovenias finance ministry has unveiled a proposal for a 25% tax on capital gains derived from cryptocurrency transactions, which is set to take effect in 2026. This new tax is part of a broader draft law aimed at addressing existing gaps in the nations tax system, particularly concerning the booming area of digital currencies.

The proposed tax would specifically target profits realized when individuals convert cryptocurrencies into fiat currency or use them for purchasing goods and services. However, it is worth noting that trades involving the exchange of one cryptocurrency for another will remain tax-exempt, enabling investors to swap digital assets without incurring immediate tax liabilities. Additionally, any capital gains accrued before the cutoff date of January 1, 2026, will not be subject to this new taxation, offering a reprieve for early investors in the cryptocurrency market.

This proposal aims to align the taxation of cryptocurrency profits with that of traditional capital investments, such as stocks and bonds, which are already subject to taxation in Slovenia. Under the proposed law, individuals will be required to calculate their taxable profit based on the difference between the acquisition price of their digital assets and the sale price, taking into account any transaction fees incurred during the process. Furthermore, individuals will be allowed to carry forward losses to offset future gains, providing some relief to those who may experience fluctuations in the volatile cryptocurrency market.

Taxpayers will be mandated to file an annual return by March 31 each year and are expected to make their tax payments within 15 days of filing. The Slovenian government estimates that this new tax could yield between 2.5 million and 25 million annually, depending on how the market evolves and the number of individuals affected by the regulation.

The timing of this proposal comes on the heels of a recent report from the European Central Bank, which reveals that Slovenia boasts the highest percentage of cryptocurrency owners in the euro area. According to the

Marco Rinaldi