Albania Looks to Introduce Crypto Taxation From 2023 Says Report

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Alba­nia is report­ed­ly plan­ning to tax income gen­er­at­ed from cryp­to assets from 2023, accord­ing to a new draft law.

Exit News report­ed that the tax draft will become law by end of this year, mak­ing way for a new cryp­to tax­a­tion regime the fol­low­ing year. The draft is said to be at the pub­lic con­sul­ta­tion stage at the moment.

The draft also under­lines the def­i­n­i­tion of the vir­tu­al asset class, empha­siz­ing: “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.”

Notably, the def­i­n­i­tion excludes cen­tral bank dig­i­tal cur­ren­cies (CBD­Cs).

Albania looks to define crypto mining

The coun­try is also look­ing to define cryp­tocur­ren­cy min­ing as “the activ­i­ty of using the com­put­er pow­er of sys­tem users to solve cryp­to­graph­ic algo­rithms, to con­firm trans­ac­tions and gain vir­tu­al tools in exchange, as well as pro­cess­ing and con­fir­ma­tion activ­i­ty of trans­ac­tions through the invest­ment of a vir­tu­al tool des­ig­nat­ed by users of com­put­er nodes par­tic­i­pat­ing in this process.”

The devel­op­ment also fol­lows Jan’s news of three peo­ple being arrest­ed for cryp­to min­ing on stolen pow­er. Since then, Alban­ian author­i­ties have been try­ing to reduce pow­er wastage.

With the new draft bill, any income from cryp­to trans­ac­tions or min­ing will report­ed­ly be clas­si­fied as income from busi­ness, at vary­ing rates based on the types of busi­ness where applic­a­ble. In oth­er cas­es, indi­vid­u­als will be sub­ject to income tax of 15% minus div­i­dends, as per the report. 

Ear­li­er this month, the Alban­ian par­lia­men­tary assem­bly called on the Finan­cial Super­vi­so­ry Author­i­ty (AFSA) to approve cryp­to reg­u­la­tions and “inten­si­fy coop­er­a­tion with inter­na­tion­al reg­u­la­to­ry author­i­ties to obtain bet­ter expe­ri­ences for this market.”

How­ev­er, work on a domes­tic cryp­to frame­work start­ed out in the last quar­ter of 2021. This was when AFSA Board report­ed­ly approved two reg­u­la­tions, stat­ing: “On the cap­i­tal ade­qua­cy and own funds of enti­ties oper­at­ing in finan­cial mar­kets based on dis­trib­uted reg­istry tech­nol­o­gy” and “For the licens­ing of enti­ties that exer­cise the activ­i­ty as a dig­i­tal token agent.”

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