Slovakia Plans To Tax Digital Platform And Cryptocurrencies Like Bitcoin

; posted on
January 16th, 2018

Earlier this month, Peter Kažimír, the Finance Minister in Slovakia announced that the Income Tax Act has been amended to cover digital platforms such as Airbnb, Booking.com and Uber. He also indicates the plan to draft a proposal on taxation of cryptocurrencies, such as bitcoin.

Taxation on Digital Economy

Since the revamp of Income Tax Act, “these companies will now have to register a permanent establishment in Slovakia if they provide their services on a continuous basis in the form of mediation of transport and accommodation,” according to Kažimír. Non-resident companies failing to do so will have to face withholding tax on their income derived from the country at a rate between 19% to 35% based on the location of the beneficiary. The obligation to remit the tax amount to the authorities is imposed on the particular driver providing transport service, or on the provider of the accommodation facility with foreign online portal. All these measures take aim at preventing income flowing out of the country without being taxed therein properly.

Bitcoin Tax

Kažimír points out that virtual currencies are employed as either transaction medium or investment assets, and the government is quite interested in taxing cryptocurrency trade. He announced the plan to draft a proposal in this year to tax the cryptocurrency when they are made or exploited, and the taxable revenue does not distinguish whether it arises from sale or exchange, with the law to be enacted next year. But there are practical difficulties to regulate such activity, and characterization of such transaction will be defined in order to determine the treatment of indirect tax, namely Value Added Tax.

Sources: the Slovak Spectator, ForexNEWS now

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