Albanian authorities are preparing legislation that would allow income and profits from bitcoin investments to be taxed. After passing the appropriate legislation, which has been submitted for public discussions, the administration aims to begin implementing the fee in 2023.
Albania is planning to impose a cryptocurrency tax as early as next year.
According to a new income tax plan, the Albanian state should begin collecting taxes on revenue from crypto assets in 2023. The administration also aims to pass a number of other regulations and bylaws this year to fully manage the situation.
The public is being invited to comment on the special tax legislation. It proposes the concept of taxing crypto holdings and virtual asset revenue. These are defined as “a digital representation of a value that can be deposited, traded, or transferred in digital form, and that can be used for payment or investment reasons, or as a medium of exchange, including but not limited to cryptocurrencies.”
The term, however, excludes central bank digital currencies (CBDCs), according to the research. Despite the fact that an increasing number of monetary authorities throughout the world are constructing digital versions of their national fiats. Major powers on the list include the United States, the European Union, China, and the Russian Federation.
Cryptocurrency mining is also defined under Albanian law as an activity that uses computational power to confirm transactions and obtain virtual assets in exchange. The extraction of cryptocurrencies has been a hazy area, despite the fact that law enforcement has been pursuing illegal mining operations in the country and charging some of their operators.
Any money from crypto transactions or mining that is earned as a result of business activity will be considered as corporate income under the new rules. If the recipients are private individuals, they will be subject to a 15% capital gains tax.
Financial Regulator Charged with Expanding Crypto Regulatory Framework
Earlier this month, the Albanian parliament directed the Financial Supervisory Authority (AFSA) to design and implement new cryptocurrency laws by the end of 2022. Albanian law allows crypto trading platforms to operate lawfully in the nation, although no regulated firms are currently operating.
Albania likewise passed a law named “Financial markets based on distributed ledger technology” two years ago. While many have praised the legislation, opponents have questioned if the small South East European country, which is still an EU candidate, is capable of adequately regulating its crypto industry to prevent it from being used for money laundering, something it is struggling to do in the fiat arena.
The legislature cited a recent study by the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (Moneyval), which suggested extra steps to address cryptocurrency dangers. The AFSA passed its first two regulations implementing the crypto markets law, which imposed capital and license requirements for firms dealing with digital assets, in November 2021.