Regardless of the manner in which he earned income, if during 2020 they collectively exceeded 26 thousand euros, the citizen must report them to the Tax Administration according to the wording of the law. However, this does not include revenues generated from cryptocurrency trading, which is a significant source of income for some citizens. As lawyer Zeljko Motika explains for the N1 portal, capital gains tax of 15 percent is paid on the earnings from the sale of cryptocurrencies, which is valid only from this year, since Serbia did not have the Law on Digital Property before.
The Ministry of Finance recently announced that the “limit” for filing the annual income tax for 2020 is exactly 26 thousand euros. Everyone who has earned more than that, regardless of whether it is a salary, collected rent, fees, sale of some movable property or real estate, must file a tax return by May 17.
These revenues, no matter how significant, do not include the earnings from the sale of cryptocurrencies.
“According to the Law on Personal Income Tax, income from cryptocurrencies from this year is taxed with capital gains tax. If, for example, you bought cryptocurrencies two years ago and now sell them, you pay a tax of 15 percent on the difference you made in the price,” explains Zeljko Motika.
Proof of how much you paid for those cryptocurrencies
A much higher tax will be paid by those who cannot prove for how much money they bought those cryptocurrencies that they have now sold.
“If you do not have proof of how much you paid for those cryptocurrencies that you, in our specific example – bought two years ago, the tax base will be all the income you have now earned by selling them. That means that you will pay tax on the purchase price at the rate of 15 percent.” our interlocutor explains.
There are also those who mine cryptocurrencies, and there is the calculation of taxes, more precisely the tax base – somewhat different.
“These are people who bought equipment for the so-called cryptocurrency mining and in this way acquired this type of digital property. They should provide evidence of all the costs they had to make that cryptocurrency become theirs – from the purchase of equipment, electricity consumption and the like. They could use that evidence before the Tax Administration in order to reduce the base for tax calculation,” states Zeljko Motika.
According to the valid legal solution, the income from any type of digital property is not paid the annual personal income tax, but only the mentioned capital profit tax.
Half the tax
The law also provides for the possibility of exemption from paying part of the capital gains tax in the amount of 50 percent in the event that the funds generated by the sale of digital assets are invested in the share capital of a company or investment fund established in Serbia within 90 days for the right to a refund of 50 percent of the tax if the said investment is made within 12 months from the day of the sale of the digital property, our interlocutor explains, BiF reports.
