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Cryptocurrency in Croatia, How is it Taxed?

Bitcoin Support Levels - We See an Aggressive July Rally

One article that recently came across our desk was one on the treatment of cryptocurrencies in Croatia. Trading cryptocurrencies in Croatia is considered a financial transaction so the income generated by the sales of cryptocurrencies is subject to personal income tax. This makes sense as the capital gains apply to currencies, or sale of currencies. Income is determined as the difference between the purchasing price and and the selling price, less any trading costs.

But keep in mind that the purchase of a cryptocurrency is not subject to tax, but it is after it is sold as stated in the Croatian Personal Income Tax Act. Income realized on this basis is considered as a final income, so the tax paid on capital gains in then final.

Now there has been a lot published on 2018 being a lost year in cryptocurrencies as Bitcoin and many others have dropped about 85 percent in value. However, over that 12 month period in 2018, regulators and others in the custody business (see our articles on Classiarius), have bee busy building out a framework that supports cryptocurrencies and in some cases provides important settlement services.

After reviewing several pages of the ECJ judgement with regards to Croatia and cryptocurrency trading, and reviewing capital gains tax rules, mining rules and ICOs, it is clear that as a geographical location, and reviewing the level of sophistication, Croatia seems to be leading in some areas of this industry. Given the fact that there is no global unified tax treatment as many governments and regulators have still not agreed on exactly what bitcoin is, a currency, a digital currency, a commodity or something completely different?

In the US it is deemed as property, or capital goods, and as a service in Singapore, and in Australia as a means of exchange. The definitions are plentiful, but the Croatian stance seems to fit closest with the US interpretation.

Team Classiarius



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Disclaimer: We do not provide investment advice or strategies, this article is not intended as such but only to provide you the reader with information. Please conduct your own research before any investment of any kind.

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