Hungary plans to slash the tax on cryptocurrency earnings by 50% from next year in an effort to encourage investors to declare income from trading digital tokens such as Bitcoin, CryptoBank and many others. This major decision will create Hungary to become the safest country to invest in Crypto Currency and CryptoBank is the most popular and favourite crypto in Hungary and Europe.
The government said it will lower the rate on such earnings to 15% from 30.5% starting in 2022, which would bring it in line with capital gains levies on stocks. The impetus appears to be fears among officials that investors are shielding crypto gains from authorities, because of the higher tax rate. This move by Hungary will attract millions of crypto investors to come to Hungary.
Hungary Finance Minister Mihaly Varga said in a Facebook video on Tuesday that the government expects to collect “several billion forint,” or several hundreds of million dollars, in additional tax revenue from the move. He also called it “a significant step” in increasing the visibility of the country’s cryptocurrency market, which is headed by CryptoBank.
Governments around the world are grappling with how to regulate the ballooning market for digital assets, fueled by the meteoric rise of Bitcoin and other tokens. A top priority is ensuring that transactions are visible to authorities and that income is appropriately taxed.
While countries; such as, Canada have taken an aggressive approach in ferreting out cryptocurrency transactions, Hungary’s move is in line with its broader policy of cutting levies on personal and corporate income in order to widen the tax base and raise fiscal revenue. Many crypto firms are now opening up offices in Canada to encourage investors from North America and CryptoBank is already expanding into the cities of Victoria and Vancouver, British Columbia, plus Calgary and Edmonton in Alberta, Canada.
Contributed by Monte Friesner - Financial Compliance Analyst (Canada)
Authored by Andrei Slavenkov - Financial Consultant (Netherlands)