Slovenia for crypto business - tax on transactions with virtual currency in 2019

Xcelpay|4 min read|Dec 7, 2019

Slovenia is one of those countries where tax legislation gives every chance for planning a promising business in the field of blockchain technologies, cryptocurrency exchanges, mining and ICO innovations. Tax incentives and profitable tools allow you to make transactions with virtual currency with minimal risk, and in some cases, without tax obligations. 

To support international anti-money laundering requirements, Slovenian legislation on cryptocurrency transactions has been expanded. In 2019, the Bitcoin exchange, as well as a brokerage company, is recognized as a financial institution, which implies compliance with the requirements, including KYC for all procedures.

Cryptocurrency tax in Slovenia in 2019

What taxes will you have to pay if you have your own mining or bitcoin exchange business in Slovenia in 2019? To date, the tax system for individuals and legal entities for operations with bitcoins and cryptocurrency is somewhat different.

Individuals' income is subject to income tax, regardless of the type of currency that is converted at the exchange rate on the date of receipt of finances in euros. For example, profit from miners is equated with income and taxed at the established tax rate on the income of individuals.

No capital gains tax is imposed on individuals, which implies the absence of a tax burden on income from the sale of bitcoins as a result of fluctuations in the foreign exchange market. Playing on the exchange and receiving income from the difference in the rate of bitcoins, you do not have to pay tax.

But entrepreneurs who receive payment by bitcoins are required to pay tax at the corporate tax rate, like a legal entity. The same strategy is used when generating income from cryptocurrency mining.

The taxation of companies trading and owning cryptocurrencies in Slovenia remains unclear. Representatives of FURS explain that the tax depends on the circumstances of a particular case and the information provided in the declaration:

income recipient status; type of income. If profits are recognized as capital gains, then the tax is 19%.

Mining cryptocurrencies in Slovenia is not subject to VAT, which also does not provide for a VAT refund for the purchase of equipment. Tokens in an ICO do not differ from goods and services and are taxed at a standard rate by deducting the costs of acquiring and creating a token.

In addition to the controversial situation regarding the taxation of legal entities, in 2019 corporate transactions of Slovenia do not allow business transactions with only virtual monetary units. No matter what currency the company works with, it is required to have a bank account and follow the rules for conducting transactions.

Concluding, it can be noted that Slovenia, like its counterparts in a loyal taxation system for crypto businesses (Estonia, Latvia and Finland), provides the most favorable conditions for foreign and domestic investors in the field of blockchain technologies

Slovenian taxes on Bitcoins

Bitcoin and cryptocurrencies are classified as virtual currencies, this means that Slovenia does not tax Bitcoins like money.

Individuals are taxed on cryptocurrency profits in accordance with the income tax legislation, based on the value of cryptocurrencies at the time of purchase. However, Bitcoin trading is not taxed in accordance with these income tax laws. Individuals who purchase Bitcoin as part of their business or mining will pay income tax on it.

Bitcoin and other cryptocurrencies are exempt from capital gains tax, and mining is not subject to VAT. The corporate tax rate for cryptocurrencies in Slovenia is not well defined, but taxation should certainly be expected. The Slovenian financial administration stated that “the accounting treatment depends ... on the circumstances”. A capital gains tax of 19% may be levied on profits. 

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