One of the major issues each jurisdiction is struggling with is to how to classify crypto coins such as Bitcoin, Ethereum and Compound, as to whether they are a type of a currency or an asset. This distinction is important as it will influence whether profits will be taxed as income or capital.
It will be interesting to see how many other countries take the similar approach as Austria.
Austria Plans to Tax Cryptocurrencies Like Stocks, Vows Equal Treatment
As a growing number of governments are looking to tap into crypto profits, authorities in Austria have indicated their intention to tax gains from digital asset investments just like those from stocks and bonds. The move is expected to increase trust and access to cryptocurrencies.
Austria to Apply Capital Gains Tax to Bitcoin, Make Crypto More Accessible
Claiming it aims for an equal treatment of investments in cryptocurrencies like bitcoin, the government in Vienna has announced it’s considering applying the same 27.5% levy to crypto assets it currently uses to tax capital gains from traditional stocks and bonds. Austria intends to impose the measure as part of a wider tax overhaul to be carried out next year.
Тhe news comes as more and more nations around the world are exploring ways to tax incomes stemming from the expanding crypto asset market, а report by Bloomberg notes. Just recently, the total capitalization of the crypto economy exceeded $3 trillion in value, as Bitcoin.com News reported, and it’s likely to continue to grow.
In a statement issued on Tuesday, Austria’s Federal Ministry of Finance remarked that “at the moment there is still an imbalance in terms of the regulation of cryptocurrencies compared to traditional stocks and bonds.” It also insisted that the country’s new tax framework will be the first in the EU to encompass bitcoin and the like and ensure fair conditions for investors in different asset classes. Officials elaborated:
In the course of the tax reform, we will take a step towards equal treatment in order to reduce distrust and prejudice against the new technologies.
The department describes the regulatory move as an essential step in making crypto-related financial products more accessible. “We are not only pioneers in Austria, but also pioneers in Europe,” Austria’s Finance Minister Gernot Blümel has been quoted as saying.
According to the document, the tax liability is to come into force on March 1, 2022 and will only apply to cryptocurrencies purchased after Feb. 28, 2021, or “new assets.” Previously acquired digital coins, “old assets,” will not be subject to the new tax rules.
In the latter case, Austrian taxpayers should refer to the general tax regulations and report crypto gains as income from speculative transactions if their sale has taken place within a one-year period of their purchase.
