The Rise of Bitcoin and Other Digital Currencies in Slovenia
Many European nations have welcomed cryptocurrencies with open arms and are developing legal frameworks to make sure that the use of these digital currencies is regulated. In most of these European nations, Bitcoin and other cryptocurrencies are regulated for tax while in other nations, these virtual currencies are also classed as money.
Slovenia is considered to be the second largest European nation for Bitcoin-related search engine queries. Slovenia is also considered as the home of one of the most popular bitcoin exchange form, Bitstamp. Bitstamp provides a safe platform for users to buy and sell bitcoins. Bitstamp was founded by Nejc Kodric and Damijan Merlak which help put Slovenia in the digital currency market, positioning Slovenia as a center for financial technology. Thanks to Bitstamp, Slovenia now has seven bitcoin ATMs and also Bitstamp is mainly developed and managed in this European nation.
Regulation Of Bitcoin And Other Digital Cryptocurrencies In Slovenia
Slovenia’s Anti-Money Laundering (AML) law helps regulate the use of bitcoins and other cryptocurrencies for transactions. The AML defines all digital currencies and brokers who are involved in the transactions that involve Bitcoin and other virtual currencies are defined as financial institutions. Bank of Slovenia, Tax Administration of the Republic of Slovenia and other Anti-money laundering regulators are responsible for the legality and regulation of bitcoin and other cryptocurrencies in Slovenia.
Recent reforms to the taxation of bitcoin were announced by the Tax Administration of the Republic of Slovenia. This authority announced that some of the income that individuals make will be taxed whether is paid in the form of bitcoin or any other form. The income will be taxed based on the value of the bitcoin at the time of the transaction. But individuals who sell bitcoins and generate an income from it won’t have to pay any tax, as this is considered as a capital gain in Slovenia.
This rule, however, is not applicable to individuals involved in bitcoin mining. Their income will be subject to tax the income that they generate will be considered as any other income. Profits that are gained through bitcoin mining and trading will also be taxed under the Slovenian Personal Income legislation provisions.
The legality and regulations for corporate entities or business entities that are involved in bitcoin trading are different. The Slovenian Ministry of Finance declared that bitcoins for businesses should be accounted for, based on the business case or the business model. This law is not only followed by Slovenia, but also by many of its neighboring nations.
Bank of Slovenia has also played a vital role in the bitcoin regulation, by issuing EBA warnings to the public about the risks of using digital currencies like loss of money, the risk of money getting stole from the e-wallet, value depreciating, and other potential risks.