We know that Slovenia’s Finance Ministry is seriously discussing a new bill. If passed, it would levy a 25% tax on profits from trading cryptocurrency that residents make. The proposal would impose tax compliance obligations on traders at the point their cryptocurrency is converted to fiat currency or used to buy goods and services. The ministry is taking public comments on the proposal until May 5th.

Otherwise, the proposed legislation would tax those profits when someone sells their crypto for dollars (or another fiat currency) or uses their crypto to purchase goods or services. Crypto-to-crypto trades and transfers between wallets owned by the same user would be exempt from the tax. If adopted by Slovenian parliamentarians, the new tax would come into force on 1 January 2026.

At the moment, crypto activity in Slovenia may be tax-free based on the determination that it is a hobby. Finance Minister Klemen Boštjančič thinks that it’s unfair that crypto trading should be tax free. He stresses this point due to the speculative focus of cryptocurrencies.

The country was the first in the world to implement a 10% tax on withdrawing or making crypto payments in early 2023. In April of 2022, legislators introduced a separate bill that would have created a 5% tax on crypto profits over 10,000 euros. Unfortunately, the bill, by most accounts, died late last week.

Based on these projections, the number of crypto users in Slovenia’s is forecasted to reach nearly 98,000 users by 2025. This amounts to a penetration rate of 4.6% among Slovenia’s population of 2.12 million. Revenues from Slovenia’s crypto market are expected to hit $2.8 million.

“The goal of taxation of crypto assets is not to generate tax revenue, but we find it illogical and unreasonable that one of the most speculative financial instruments is not taxed at all,” - Klemen Boštjančič, Finance Minister

Jernej Vrtovec, a central figure in Slovenia’s nascent financial sector, sounded a cautionary note regarding the planned tax.

“Slovenia has the opportunity to become a crypto-friendly country, but with the government’s proposals, we will miss the train again,” - Jernej Vrtovec

“With excessive taxation, we will once again see young people and capital fleeing abroad. Taxes should encourage, not stifle.” - Jernej Vrtovec