The advent of crypto has provided worldwide Governments a new industry which they can tax. Similarly, the Austrian Government has come up with a proposal in which it would be treating “virtual assets” as the like of “stocks” for the purposes of imposition of tax upon virtual assets. Eventually, tax will be collected over gains derived from crypto.
While disclosing the intent of taxing crypto, Government of Austria has disclosed its intent of taxing crypto. However, before moving on to taxing crypto, the Government would need to bring crypto within the tax net. This will in turn require amending of laws and laying down of regulatory framework for virtual currencies and assets. According to the Government’s proposal to tax crypto, the Government wishes to collect 27.5% tax on crypto gains. However, it has further proposed that the tax will be collected in the next year, the exact date for which hasn’t been disclosed yet.
Austrian Government has advised that it needs to first give some sort of status to crypto before tax can be collected. For instance, the Government has advised that virtual currencies and assets should be treated such as “commodities” or “stocks”. Currently, gains earned against stocks and commodities by taxpayers, are taxed up to a maximum of 27.5%. It is thus clear that the Government wants to impose same tax rate upon crypto earnings.
It is obvious that Austrian Government is following in the footsteps of worldwide governments. There are no less than 30 major countries of the world who have or who are bringing crypto into the tax net. The idea came into being when the world was faced with the global pandemic. Otherwise, for more than 10 years, none of the countries had imposed any taxes upon cryptocurrencies. In addition, the market capital of cryptocurrencies and virtual assets has exceeded US$ 3 Trillion threshold. Eventually, it will continue to grow in numbers and value and therefore has its distinct industry throughout the world.
On 9th November, 2021, there was a statement issued in this context by the Finance Ministry of Austria. In the statement, the Ministry was of the view that the crypto market in Austria remains mostly unregulated. However, there is a clarity of regulations with regard to commodities, bonds and stocks. If crypto is treated as such i.e. as commodities, bonds and stocks, then the lack of regulation can be removed efficaciously.
The Ministry also revealed that there is no country with the European Union which has so far given any legal status to crypto, including Bitcoin. Austria would be the first country to do that. If crypto is given legal status then this would result in creating a natural investment climate for crypto, said the Ministry.
