If you make money on cryptocurrencies, you won’t lose all the profits. Slovaks forget to pay taxes, you may have problems

TASR materials were used in the article

Cryptomens have been on a declining trend in recent weeks. However, it is still true that thanks to bitcoin, etherere or especially many lesser-known altcoins, a number of investors managed to earn very well.

However, income from the sale or exchange of virtual currency is subject to income tax, as is your current salary or sales of sole proprietors and companies. If you do not state it in the tax return and do not pay the tax subsequently, you risk problems with taxpayers as well as criminal consequences, informs TASR.

It is true that buying and selling, or transactions between virtual wallets, are almost completely anonymous and untraceable, but in the case of services such as Crypto.com, Binance or Coinbase, it is a little different.

These services are obliged to collect basic identification data from users, so-called KYC form. In other words, if he sent his scanned ID card at the registration service, it is a database that Slovak taxpayers can theoretically get into, or request in case of suspicion.

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What needs to be done and how much you will pay

Gains made from the sale or exchange of cryptocurrencies are normally taxed at the tax rates of 19% and 25%, respectively. If a natural person is a so-called resident in Slovakia, the tax base is also the assessment base for health insurance at a rate of 14%. However, a natural person can reduce the tax base for paid health insurance premiums – informs TASR.

It is different if a natural person does business with cryptocurrencies. “In this case, he pays taxes and levies as a self-employed person. Legal entities, in turn, pay income tax at a rate of 15% or 21%. It should also be added that the natural person in the background of such a legal person will probably have to pay 7% tax on dividends and, if applicable, the tax obligations of that natural person. ‘ pointed out Peter Varga, a lawyer from the law firm Highgate Law & Tax cooperating in the regulation of cryptocurrencies with the Ministry of Finance (MF) of the Slovak Republic.

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However, legislation on cryptocurrencies is not clear in Slovakia. For example, there are differing views on what is “a profit from the sale or exchange of cryptocurrencies”. It is clear that intraday trading on cryptobours belongs to such revenues, but discrepancies come from the so-called HODL-eroch, which e.g. they bought bitcoin, but did not sell or exchange it for another currency during the tax period (ie they did not close their position in principle).


For the sale of virtual currency for tax purposes also according to the company podnikajte.sk considers any exchange – e.g. exchange of virtual currency for property or exchange of virtual currency for provision of service. “Cryptocurrency is not taxed if the non-entrepreneur or entrepreneur holds the cryptocurrency in his account without movement and no income is generated. Taxation would not take place even if the person held the cryptocurrency and its value increased, ” I write.

Opinions according to which the pros and cons of holding cryptocurrencies should always be calculated at the end of the year and, in the case of profit, taxed, can be described as incorrect. It is similar when pulling. You tax only when you exchange it for FIAT money, but also another cryptocurrency.

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It’s not just hold and sale. Cryptomen trade in the Slovak Republic should be taxed – how much do you have to pay? (large overview)

We try to avoid taxes

Slovaks often reach for various tools to optimize taxes on sales or exchange of virtual currencies. However, some are more practical than legal. Although there are a number of alternatives, lawyers warn that the taxpayer should be careful about their legality. “Not only can the limitation period be longer, especially in a criminal law context, but the state may also have other options in the near future and an interest in addressing the individual tax positions of persons earning income from crypt,“ Varga stressed.

However, transfers to foreign legal entities or changes in tax residence, investment in funds or trusts, recognition of related costs and the like apply to completely legal methods of optimization.

“It should be borne in mind that the legality of any tax optimization needs to be assessed separately for each person. It is not possible to say in general that a certain instrument is always, everywhere and in everyone legal. For example, while a well-known German tennis player has committed a crime while changing his tax residence, a Slovak athlete has not, “ Varga stated.