Greece is reportedly preparing legislation to impose a 15% capital gains tax on cryptocurrencies. While, as per Reuters, the bill is going to be submitted to the parliament in the coming months, for the purpose of pre-legislation debate and discussions, it is worth mentioning that neither the European country has a comprehensive legal framework for taxing cryptocurrencies nor the European Union possesses a unified taxation system for the sector.
While the legislation’s aim is to include cryptocurrencies in the country’s tax code, taxation of cryptocurrencies among European countries varies from 8% in Cyprus to 30% in France. However, in all the places, these taxes come under the “capital gains” category.
As per Reuters, the Greek government wants to make the first 500 euros (USD 580) of gains tax-free. The tax will not apply to individual cryptocurrency mining, but the clause of exception will come into force if the entity mining is registered as a corporation.
As per an analysis from the Crypto Briefing, a 15% flat tax will be imposed on profits from crypto asset disposals. This will apply to individuals, with the 500-euro annual exemption likely giving smaller investors some breathing room.
Losses incurred on crypto transactions could be used to offset gains within the same tax year. Crypto Briefing further anticipates the likelihood of the bill having provisions that will allow investors to carry forward losses for up to five years.
The European Union’s decision to roll out its Markets in Crypto-Assets (MiCA) framework has put tremendous pressure on individual member states in terms of formalizing their ways of handling digital asset taxation. Greece has been one of the laggards in this regard, operating without a cohesive crypto tax framework while other nations moved ahead with clear guidelines.
In fact, in Greece, there is no clarity on the legal status of cryptocurrencies to date. Still, being aware of the mass adoption and growing popularity of crypto assets among its residents, the administration has prevented itself from taking knee-jerk reactions like announcing investments in cryptocurrencies as “illegal.”
Within the context of Law 4514/2018 MiFID II, Law 4021/2011 EMD II, and Law 4537, PSD II, cryptocurrencies may be classified as financial instruments, electronic money, or funds if the relevant definitions conform with the transactions. However, there is no official guidance from the HCMC (Hellenic Capital Markets Commission) or the BoG (Bank of Greece) discerning the official classification of crypto assets.