The Albanian government is finalizing legislation that would allow for the taxation of crypto income. The country intends to begin this latest levy on crypto income in 2023.
Albania To Impose Cryptocurrency Tax In 2023
According to Exit News, Albania will start collecting crypto income tax from 2023. This is due to a recent bill concerning crypto income tax, Exit News added.
Also, the government wishes to pass additional laws before 2023 to regulate the crypto sector. The goal is to ensure comprehensive regulation of the crypto industry.
Meanwhile, the tax regulation introduces the concept of income tax on virtual assets. It is currently available for public consultations.
However, Albania has not made any move on CBDC development. This is contrary to the increasing popularity of CBDCs worldwide. Various nations are working on developing a retail or wholesale CBDC.
According to Albanian, crypto mining is an activity that uses computing power to confirm transactions. Law enforcement agencies in the country have shut down several illegal mining stations.
The latest regulation will tag all incomes from cryptocurrency transactions under corporate income. This means crypto users received it due to business activity.
The same law applied to income from mining activities. Additionally, when those who receive such income are private persons, they must pay 15% tax.
Albania’s Watchdog, AFSA, Ordered To Prepare New Crypto Regulation
At the start of June, the parliament of Albania called for new crypto regulations. It ordered the AFSA (Albanian Financial Supervisory Authority) to prepare new crypto regulations before 2023.
According to Exit News, no crypto firm has received a license to operate in Albania. However, the law allows cryptocurrency trading firms to work legally in the state.
In 2020, Albania adopted a legislation called “Financial markets based on distributed ledger technology.” Although many accepted the law, there have been criticisms.
Many doubt if the country in South-Eastern Europe would be able to regulate the crypto space. This is because it is still struggling to regulate the fiat sector.
Presently, the fiat sector is filled with money laundering activities. Many believe that might likely be the case with the crypto industry.
Meanwhile, the legislation in 2020 mentioned a report made by the Council of Europe’s Committee of Experts. The committee talked about setting measures to prevent money laundering and terrorism financing.
Also, the committee recommends that the same regulation be made for cryptocurrency. In 2021, AFSA issued its first set of regulations for the cryptocurrency market.
The law introduced the licensing and capital requirements for institutions with virtual assets. As a result, only licensed firms can provide digital asset services.