Albanian officials are making final arrangements to tax income earned from investments in cryptocurrency. After approving the legislation that has been submitted for public consultations, the government plans to impose the levy starting in 2023.
Albania to Implement Crypto Taxes as Soon as the Next Year
A new income tax bill in Albania calls for the state to begin to collect taxes from income from crypto assets beginning 2023, according Exit News (local English-language portal) on Friday. In order to fully regulate the issue, the government plans to adopt a variety of additional laws and regulations this year.
Consultations are open to the public on this special tax legislation. The legislation introduces taxation of crypto assets and income from virtual assets. The latter have been defined as “a digital representation of a value that can be deposited, traded or transferred in digital form, and that can be used for payment or investment purposes or as a medium of exchange, including but not limited to cryptocurrencies.”
The report points out that the definition doesn’t include central bank digital currencies. That’s despite a growing number of monetary authorities around the world developing a digital version of their national fiats. It includes the United States, China and the European Union as well as major power like Russia.
Albanian law defines cryptocurrency mining to be any activity that uses computing power in order to verify transactions or gain virtual assets. While the illegal extraction of crypto currencies has been an area of grey, some operators have been charged by law enforcement.
Under the new legislation, any income from crypto transactions or mining will be classified as corporate income when it’s received as a result of business activity. If the recipients are individuals who have not been employed, they must pay 15% capital gains taxes.
Financial Watchdog To Expand Crypto Regulatory Framework
The Albanian parliament had earlier this month ordered that the Financial Supervisory Authority, (AFSA), prepare new regulations on cryptocurrencies and approve them by 2022. Exit News reported that while crypto trading platforms are legal in Albanian law and can be legally operated in Albania by licensed entities, there is no licensing for them.
Two years ago, Albania also adopted a law titled “Financial markets based on distributed ledger technology.” While many have welcomed the legislation, critics have questioned whether the small nation in South East Europe, still an EU hopeful, is capable of properly regulating its crypto sector to prevent it from being used for money laundering, something it’s struggling to achieve in the fiat space.
The legislature referenced a recent report by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval), which recommended additional steps regarding the risks associated with cryptocurrency. The AFSA adopted its two first regulations implementing crypto markets law in November 2021. These regulations introduced licensing and capital requirements for digital asset entities.
Are you optimistic that Albania will adopt complete regulations regarding its crypto-space by the end the year? Comment below.
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