The authorities in Albania are finalizing rules that would allow the taxation of income and profits from cryptocurrency investments. The government intends to start levying the levy in 2023, following the adoption of the proposed required legislation for public consultation.
Albania set to introduce crypto tax early next year
Local English-language portal Exit News reported on Friday that the Albanian state should start collecting taxes on income from crypto assets by 2023 according to a new income tax bill. The government also expects to pass several other laws and by-laws this year to regulate the matter comprehensively.
The particular tax law is currently open for public consultation. It introduces the concept of taxing income derived from crypto holdings and virtual assets. The latter is defined as “a digital representation of a value that can be deposited, traded or transferred in digital form, and can be used for payment or investment purposes or as a medium of exchange, Which includes but is not limited to cryptocurrencies.”
However, the definition does not cover central bank digital currencies (CBDCs), notes the report. It continues to develop a digital version of its national fiat despite a growing number of monetary authorities around the world. The list includes major powers such as the United States, the European Union, China and the Russian Federation.
Albanian law also defines cryptocurrency mining as an activity that uses computing power to confirm transactions and acquire virtual assets in exchange. The extraction of cryptocurrency has been a gray area, although law enforcement is going after illegal mining facilities in the country and allegations against some of their operators.
Under the new law, any income from crypto transactions or mining would be classified as corporate income if received as a result of business activity. And when the beneficiaries are private individuals, they will have to pay a capital gains tax of 15%.
Financial watchdog worked to expand crypto regulatory framework
Earlier this month, the Albanian parliament ordered the Financial Supervisory Authority (AFSA) to prepare and adopt new regulations regarding cryptocurrencies by the end of 2022. Albanian law allows crypto trading platforms to operate legally in the country, but no licensed entities are currently operating in Albania. , Exit News commented.
Two years ago, Albania also adopted a law called “Financial Markets Based on Distributed Ledger Technology”. While the law has been welcomed by many, critics have questioned whether the small nation in Southeast Europe, still hopeful of a European Union, can fix it to prevent its crypto sector from being used for money laundering. is able to regulate from, something it is struggling to achieve. space.
The legislature referred to a recent report by 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 the cryptocurrency. In November 2021, AFSA approved its first two regulations enforcing the crypto market law, which introduced capital and licensing requirements for entities dealing with digital assets.
Do you expect Albania to adopt comprehensive regulations for its crypto space by the end of the year? Tell us in the comments section below.
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