Albania Begins Taxing Cryptocurrency Profits Beginning Next Year

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Albania Begins Taxing Cryptocurrency Profits Beginning Next Year
Albania Begins Taxing Cryptocurrency Profits Beginning Next Year

According to the proposed legislation, crypto profits from business purposes will be taxed at the business rate, while investors will face a 15% tax.

According to reports, the Albanian government has decided to tax cryptocurrency trading profits. The legislation is scheduled to go into effect in early 2023.

By passing a law titled “Financial markets based on distributed ledger technology” in 2020, the Balkan country signaled its intention to regulate the local cryptocurrency sector. The legislation sparked significant debate, with some welcoming it and others doubting Albania’s ability to implement such a comprehensive regulatory framework on digital assets.

Furthermore, the country is known as a major player in the global cocaine market, and many experts have warned that criminals may use cryptocurrencies to launder profits from such illegal activities. The MONEYVAL report from last year confirmed these fears:

According to a recent report, the Albanian government has revisited the cryptocurrency industry, intending to levy taxes on individuals who generate income from dealing with the asset class. Profits earned for business purposes will be taxed at the business rate, while investors will be required to pay the government 15% of their annual earnings.

Nonetheless, digital currencies issued or backed by central banks, such as China’s e-CNY and Nigeria’s eNaira, will be excluded from the legislation. Albania has not yet implemented its CBDC.

Cryptocurrency taxation policies have already been implemented in some countries, including Germany and India. However, it is worth noting that Europe’s largest economy made some changes last month. The German Ministry of Finance announced that the sale of acquired bitcoin and ether will not be taxed if the coins are held for more than a year.

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Portugal also considered taxing digital asset gains. The country’s authorities rejected two separate bill proposals on the subject a few weeks ago, and crypto trading remains tax-free for the time being.