Next Year, Albania will begin Taxing Cryptocurrency Trading Investments Profits

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According to reports, the Albanian government has decided to impose taxes on cryptocurrency trading profits. Beginning in 2023, the Act is expected to take effect.

Albania’s Crypto Environment

By introducing a law titled “Financial markets based on distributed ledger technology” in 2020, the Balkan nation made it clear that it intended to regulate the local cryptocurrency market. The Act sparked a great deal of debate since some people supported it while others questioned Albania’s ability to implement such a thorough regulatory framework for digital assets.

Moreover, the nation is known as one of the main participants in the global cocaine market, and many experts warned that criminals could use cryptocurrencies to launder profits from such illicit activities. Last year’s MONEYVAL report confirmed those concerns:

“The following monitoring report for Albania came to the conclusion that its efforts to combat money laundering and terrorism financing have not considerably improved in line with FATF recommendations. The paper looked at new international rules that apply to virtual assets, such cryptocurrencies and the companies that offer them.”

According to a recent coverage, the Albanian authorities have touched upon the cryptocurrency industry once again, intending to apply taxes on individuals who generate income from dealing with the asset class. Profits derived from business purposes will be taxed per business rate, while investors will have to give 15% of their annual earnings to the government.

However, digital currencies backed or issued by central banks, such as the e-CNY of China and the eNaira of Nigeria, will not be covered by the Act. The CBDC has not yet been implemented in Albania.

The proposed law also addresses cryptocurrency mining. The officials observed that although the industry had previously been a bit of a gray area, it has recently become a fascinating niche where many people invest their money and make large rewards. It is still unknown at this time if miners will also be subject to taxes by the Albanian government.

Crypto Taxes Around the World

Some countries, including Germany and India, have already enforced cryptocurrency taxation policies. It is worth noting, though, that Europe’s largest economy did some amendments last month. The German Ministry of Finance disclosed that the sale of acquired bitcoin and ether won’t be taxed if individuals hold the coins for more than one year.

Portugal also considered applying taxes on digital asset gains. A few weeks ago, the nation’s authorities dismissed two separate bill proposals focused on the matter, and as of the moment, crypto trading remains untaxed.

Australia is another example where such legislation is on its way. The Australian Taxation Office (ATO) outlined that taxing profits from cryptocurrency trading is one of the authorities’ key goals for 2022.

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