Albania crypto tax to come into effect in 2023
Albania is in the process of introducing regulations that will enable the taxation of income and earnings from cryptocurrency investments.
From 2023 onwards, the government is looking to start collecting taxes from these assets as new rules are established for the burgeoning sector.
According to the legislation, income sourced from digital assets is 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 purposes or as a medium of exchange, including but not limited to cryptocurrencies.”
This does not, however, extend to central bank digital currencies (CBDCs).
For companies, Albania will classify profit from crypto trading or mining as corporate income. Individuals on the other hand will be subject to a capital gains tax of 15 per cent.
The newly-introduced tax legislation is in the stage of being open for public consultations.
This comes as the next step in the Balkan nation’s efforts toward regulating the sector. In 2020, The Albanian Parliament passed a law titled On financial markets based on distributed ledger technology, which went into effect in September of that year.
In the 107-article document, it’s stated that “the object of this law is the regulation of the issuance of digital tokens and/or virtual currencies, licensing, monitoring and the supervision of entities that exercise the activity of distribution, trading and storage of digital tokens and/or virtual currencies, of the digital tokens agent, of the provider of innovative services and collective investment schemes.”
This update was a positive turn from the Bank of Albania’s previous dismissal of cryptocurrency. In 2017, the bank had no plans to carry out operations with crypto assets, citing the risks due to anonymity.
Albania is a key player in the illicit drug market and the government struggles to curtail its criminal activities. Along with the central lender, experts have warned that digital currency could be misused for money laundering, terrorism financing, or the smuggling of goods.
As of 2021, just over 40,000 Albanians own crypto, which amounts to 1.43 per cent of the population. It’s hoped that this new initiative will bolster its adoption in the country.