Albanian authorities are finalizing regulations to allow taxation on income and profits from crypto investments. After approving the legislation that has been submitted for public consultation, the government plans to impose the levy starting in 2023.
According to a new income tax bill, Albania should start collecting taxes from income from crypto assets starting in 2023. This was reported by Exit News on Friday. To fully regulate the issue, the government hopes to pass several other laws and bylaws in this year.
The special tax legislation is available for public consultations . The legislation introduces the taxation of crypto holdings and income from virtual assets. These digital representations of value can be traded, deposited or transferred digitally and can be used as a medium for exchange or payment, as well as for investment or payment purposes.
The report points out that the definition does not include central bank digital currencies (CBDCs). This is despite the fact that a growing number monetary authorities around world are developing digital versions of their national fiats. This list includes the United States, China, Russia Federation, and the European Union.
Albanian law defines cryptocurrency mining as any activity that uses computing power to verify transactions and exchange virtual assets. Although the extraction of cryptocurrency has been controversial, law enforcement in Albania has pursued illegal mining operations and brought criminal charges against some of them.
The new legislation will make any income from crypto transactions and mining taxable corporate income if it is earned as a result business activity. Private individuals will be subject to a 15% capital gains tax if they are the beneficiaries.
Financial Watchdog to Expand Crypto Regulatory Framework
The Albanian parliament had earlier this month ordered the Financial Supervisory Authority ( , AFSA), to develop and adopt new regulations concerning cryptocurrencies by 2022. Exit News noted that although crypto trading platforms can legally operate in Albania under Albanian law, no licensed entities exist in Albania at the moment.
Two years ago, Albania adopted a law entitled “Financial Markets based on Distributed Leger Technology.” However, many are skeptical that the tiny nation in South East Europe is capable of properly regulating the crypto sector to stop it being used for money laundering. This is something that it has been struggling to do in the fiat space.
The legislation referred to a report from the Council of Europe’s Committee of Experts on the Assessment of Anti-Money Laundering Measures (Moneyval), in which additional steps were recommended regarding the potential risks associated with cryptocurrency. The AFSA approved two regulations implementing the Crypto Markets Law in November 2021. These regulations introduced capital and licensing requirements to entities that work with digital assets.