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Slovakia Slashes Crypto Tax Rate and Brazil Tightens Regulation

slovakia slashes crypto tax rate and brazil tightens regulation

In an inovative move, Slovakia has approved a law significanly reducing taxation on cryptocurencies. The law , effective from January 1, 2024 , reduces the tax rate on cryptocurencies from 39% to a mere 7%. Slovakia, a Central European country with a GDP of approximatly $105 billion and a population of over 5.4 million , is positioning itself as a leading cryptocurency hub.

New Crypto Tax Guidelines in Slovakia

The new law provides several guidelines for trading and holding cryptocurencies:

Cryptocurencies held for over a year will be taxed at 7%.

Crypto to crypto exchange is not taxable.

Exchanges from crypto to stablecoin are taxable.

Purchases of assets up to €2400 ($12,000) per year are exempted from taxation.

Staking rewards are taxed when converted to fiat or stablecoin.

Direct payments in Bitcoin are not taxed

The law also clarifies direct payments in Bitcoin (BTC) or other cryptocurencies. Direct payments in BTC up to € 2400 ($12,000) per year will not be taxed . This is a signifcant step towards everyday cryptocurency adoption , enabling consumers to use cryptocurencies for routine transactions.

slovakia slashes crypto tax rate and brazil tightens regulation 2

Contrasting Crypto Climate in Brazil

As Slovakia adopts favorable regulations for cryptocurency use, Brazil prepares for tighter control , with Lula signing a decree on cryptocurencies making the Central Bank responsible for the market. Regulatory guidelines in Brazil are yet to be determined by the Central Bank. However, market players are already discusing entry fees and Central Bank authorizations for market entry. Additionaly, capital gains tax with cryptocurrencies could reach a staggering 22.5%.

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