The Albanian authorities have reportedly decided to apply taxes on earnings generated from cryptocurrency trading. The legislation is supposed to come into effect from the beginning of 2023.
In 2020, the Balkan country displayed its intentions to regulate the local cryptocurrency sector by passing a law called “Financial markets based on distributed ledger technology.” The legislation caused a significant controversy as some welcomed it, while others doubted that Albania has the expertise to enforce such a comprehensive regulatory framework on digital assets.
Moreover, the nation is known as one of the main participants in the global cocaine market, and many experts warned that criminals could use cryptocurrencies to launder profits from such illicit activities. Last year’s MONEYVAL report confirmed those concerns:
“The next monitoring report for Albania concluded that this country has not significantly improved its measures to combat money laundering and terrorist financing in accordance with the FATF recommendations. Among other issues, the report examined new international standards applied to virtual assets, including cryptocurrencies and providers of such assets.”
According to a recent coverage, the Albanian authorities have touched upon the cryptocurrency industry once again, intending to apply taxes on individuals who generate income from dealing with the asset class. Profits derived from business purposes will be taxed per business rate, while investors will have to give 15% of their annual earnings to the government.
Nonetheless, the legislation will not refer to digital currencies issued or backed by central banks such as China’s e-CNY and Nigeria’s eNaira. Albania has not yet rolled out its CBDC.
The upcoming law also focuses on crypto mining. The officials noted that the sector had been something of a grey area in the past years but recently has emerged as an intriguing niche where many individuals invest their wealth and accumulate considerable gains. As of the moment, it remains unclear whether the Albanian authorities will apply taxes on miners, too.
Some countries, including Germany and India, have already enforced cryptocurrency taxation policies. It is worth noting, though, that Europe’s largest economy did some amendments last month. The German Ministry of Finance disclosed that the sale of acquired bitcoin and ether won’t be taxed if individuals hold the coins for more than one year.
Portugal also considered applying taxes on digital asset gains. A few weeks ago, the nation’s authorities dismissed two separate bill proposals focused on the matter, and as of the moment, crypto trading remains untaxed.
Australia is another example where such legislation is on its way. The Australian Taxation Office (ATO) outlined that taxing profits from cryptocurrency trading is one of the authorities’ key goals for 2022.