Taxation of crypto-assets

What it means

Taxation of crypto-assets covers the rules for taxing gains from selling crypto-assets, exchanging them for goods or services or receiving them as payment. Crypto-assets such as bitcoin, ether or stablecoins are treated separately in Slovak tax law and are considered neither money nor ordinary securities.

For individuals, income from crypto-assets is generally taxed as other income under special rules. What matters is the moment a crypto-asset is converted into money or other value, for example when it is sold for euros or used to pay for goods or services.

For companies, income from crypto-assets is ordinary revenue included in the corporate income tax base. The company must value crypto-assets on acquisition, track their value and, on sale or exchange, book the difference as income or expense.

How it works in practice

Individuals can deduct documented acquisition costs from proceeds, but losses on crypto-assets generally cannot be offset against other income. The rules have changed in recent years, including relief for longer holding periods, so the version for the relevant year must be checked.

Correct taxation requires detailed records of all transactions: dates, amounts, rates, fees and wallets. When trading on several exchanges and through smart contracts, record-keeping can be demanding, so portfolio tracking tools are worth using.

Individuals usually report crypto income in a type B tax return. With larger amounts, obligations towards the health insurer may also arise, and banks may ask for proof of the source of funds when money is transferred from exchanges.

What to watch out for

Crypto regulation is developing quickly, especially under the MiCA regulation and EU rules on exchanging crypto-asset information between tax authorities. Tax authorities will gain a better view of transactions, increasing the risk for undeclared income.

Some operations, such as staking, airdrops, mining or exchanging one crypto-asset for another, have special tax treatment that is not always clear-cut. For larger volumes or more complex operations it is advisable to consult a tax adviser.