Austria says it wants to boost confidence in cryptocurrencies by taxing them like mainstream stock and bond investments.
The home country to Peter Thiel-backed trading platform Bitpanda GmbH intends to apply a 27.5% capital gains levy on digital tokens like Bitcoin and Ethereum from March 2022 as part of a wide-ranging tax overhaul. More jurisdictions have been examining the imposition of taxes as the global cryptocurrency market’s value has swelled to more than $3 trillion.
Austria says its tax framework would be the first of its kind in the European Union and may improve fairness among investors by streamlining conditions between different classes of assets.
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“We are taking a step in the direction of equal treatment, to reduce mistrust and prejudice toward new technologies,” the Finance Ministry said Tuesday in a statement.
Holdings purchased before the tax takes effect won’t be subject to the levy, which will only apply at the time the tokens are sold. A tax on speculative investments -- those held for less than a year -- has already been place on tokens.
Traders who sell one digital token to buy another won’t be on the hook for tax liability and investors can receive compensation calculated against potential losses when they sell, according to the proposed rules.
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