Austria plans to tax cryptocurrencies

Austria plans to tax cryptocurrencies
As more and more governments look to capitalise on the profits from cryptocurrencies, authorities in Austria have expressed their intention to tax profits from investments in digital assets, similar to stocks and bonds. The move is expected to increase confidence and access to cryptocurrencies.

Austria will apply capital gains tax to Bitcoin, which will make crypto more accessible.

Claiming to aim for equal treatment of investments in cryptocurrencies such as Bitcoin, the government in Vienna has announced that it is considering applying the same 27.5% levy on crypto assets that it currently uses to tax capital gains from traditional stocks and bonds. 

A growing number of countries around the world are exploring ways to tax income from the growing crypto asset market, notes a Bloomberg report. Recently, the total capitalisation of the crypto market surpassed $3 trillion.

In a statement released on Tuesday, the Austrian Federal Ministry of Finance noted that “at the moment there is still an imbalance in the regulation of cryptocurrencies compared to traditional stocks and bonds”. It also stressed that the country’s new tax framework would be the first in the EU to cover Bitcoin and the like and ensure fair conditions for investors across asset classes. 

Officials said:

“In the course of tax reform, we will take a step towards equal treatment to reduce distrust and prejudice towards new technologies.”

The department describes the regulatory move as a necessary step in making cryptocurrency-related financial products more accessible. 

“We are not only pioneers in Austria, but also in Europe,” – Austrian Finance Minister Gernot Blümel said.

According to the document, the tax obligation is set to come into effect on 1 March 2022 and will only apply to cryptocurrencies purchased after 28 February 2021. Digital coins acquired earlier, will not be subject to the new tax rules.

In the latter case, Austrian taxpayers should refer to the general tax rules and report profits from cryptocurrencies as speculative transaction income if their sale took place within one year of their purchase.

19-11-2021, Mr Advice TEAM

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