Slovenia Proposes 25% Tax on Crypto Gains Starting 2026

Slovenia’s finance ministry has proposed a 25% tax on capital gains from cryptocurrency starting in 2026, under a draft law aimed at closing a gap in the country’s tax system. The tax will apply to profit made when individuals sell crypto for fiat currency or spend it on goods and services. However, swapping one cryptocurrency for another will remain tax-free, and any gains made before January 1, 2026, will not be taxed, according to the finance ministry’s proposal. The measure is meant to treat crypto gains more like other capital investments, such as stocks or bonds, which are already taxed. Under the law, individuals would calculate their profit as the difference between the value at acquisition and at sale, adjusted for transaction fees. Losses can be carried forward to offset future gains. Taxpayers would need to file an annual return by March 31 and make payment within 15 days. The tax could generate between €2.5 million and €25 million annually, according to preliminary government estimates. The country’s Ministry of Finance is soliciting public feedback on the proposal, which would come into effect next year.

The proposal comes as data from the European Central Bank’s ‘Survey on Consumer Payment Attitudes in the Euro Area’ shows Slovenia has the highest share of cryptocurrency owners in the euro area, with 15% of adults holding digital currencies last year, up from 8% in 2022. The proposal has faced criticism from members of the opposition. Jernej Vrtovec, a member of Slovenia’s National Assembly and part of the New Slovenia party, expressed concerns about the potential loss of talent and investment. He noted that Slovenia has the opportunity to become a leader in crypto development but warned that the proposed tax could drive the industry away. Vrtovec emphasized the need for policies that foster innovation and growth rather than setting up barriers. His comments reflect broader concerns about the long-term effects of strict tax measures on the local digital economy. Despite ongoing policy debates, Slovenia’s cryptocurrency market is experiencing gradual growth. The number of people using crypto in the country is expected to reach around 98,000 by 2025, making up nearly 4.6% of the population. The cryptocurrency market is forecast to generate approximately $2.8 million in revenue by 2025. In mid-2023, Slovenia became the first in the European Union to issue a sovereign bond using blockchain technology, valued at €30 million with a fixed annual rate of 3.65% and structured to mature before the end of that year. A previous attempt to tax crypto gains in 2022, which aimed to introduce a 5% rate on profits above €10,000, did not pass. The current draft law represents a renewed effort by the government to bring digital assets under clear tax regulations.

Slovenia’s proposed 25% tax on cryptocurrency profits has sparked debate and concern among investors, who fear potential talent and capital flight. This move is part of a broader legislative effort to regulate the cryptocurrency market, which has seen rapid growth and increasing adoption. Investors are particularly worried about the impact on the country's burgeoning crypto industry, which has attracted a significant number of startups and talent. The proposed tax could make Slovenia less competitive compared to other European countries with more favorable tax regimes, potentially driving away both investors and skilled professionals. The debate highlights the delicate balance between regulation and innovation in the cryptocurrency space, as governments grapple with how to integrate this new asset class into their existing financial systems. The outcome of this legislative proposal will be closely watched by the global crypto community, as it could set a precedent for how other countries approach cryptocurrency taxation.