Albania To Start Taxing Crypto-Related Income From 2023 – Bitcoin Regulation News
Albanian authorities are in the process of finalizing regulations that will allow taxation of income and profits from cryptocurrency investments. The government intends to start imposing the levy in 2023, after passing the necessary legislation which has been proposed for public consultation.
Albania set to impose crypto tax as early as next year
The Albanian state is expected to start collecting taxes on income from crypto assets from 2023 under a new income tax bill, local English-language portal Exit News reported on Friday. The government also hopes to pass a number of other laws and regulations this year to fully regulate the issue.
The special tax legislation is currently open for public consultation. It introduces the concept of taxation of crypto assets and income derived from virtual assets. These have been defined as “a digital representation of value which can be deposited, exchanged or transferred in digital form, and which can be used for payment or investment purposes or as a medium of exchange, including, but not limited to cryptocurrencies”.
However, the definition does not cover central bank digital currencies (CBDCs), the report notes. This is despite a growing number of monetary authorities around the world developing a digital version of their national fiats. The list includes major powers such as the United States, the European Union, China, and the Russian Federation.
Albanian law also defines cryptocurrency mining as an activity using computing power to confirm transactions and obtain virtual assets in exchange. Cryptocurrency mining has been a gray area although law enforcement has been pursuing illegal mining facilities in the country and bringing charges against some of their operators.
Under the new legislation, any income from crypto transactions or mining will be classified as business income when received as a result of commercial activity. And where the beneficiaries are individuals, they will have to pay a capital gains tax of 15%.
Financial Watchdog tasked with expanding crypto regulatory framework
Earlier this month, the Albanian parliament ordered the Financial Supervisory Authority (AFSA) to prepare and adopt new regulations regarding cryptocurrencies by the end of 2022. Albanian law allows platforms crypto trading companies to operate legally in the country, but there are currently no licensed entities operating in Albania. , Exit News points out.
Two years ago, Albania also passed a law called “Financial Markets Based on Distributed Ledger Technology”. While many have welcomed the legislation, critics have questioned whether the small southeast European nation, still an EU hopeful, is able to properly regulate its crypto sector to prevent it from being used for money laundering, which she struggles to achieve in the fiat space.
The legislator referred to a recent report by the Council of Europe’s Committee of Experts on the evaluation of measures against money laundering and the financing of terrorism (Moneyval), which recommended additional measures concerning cryptocurrency risks. In November 2021, the AFSA approved its first two regulations implementing the Crypto Markets Act, which introduced capital and licensing requirements for entities working with digital assets.
Do you expect Albania to adopt comprehensive regulations for its crypto space by the end of the year? Tell us in the comments section below.
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