Double taxation on crypto payments. Peter Varga and Vladimíra Mačuhová lectured at the methodological days of the Slovak Chamber of Tax Advisors

The level of taxation (and health levies) is not the only major problem of inefficient tax legislation in Slovakia. This problem is also the threat of double taxation when receiving kickbacks for the provision of goods and services in the crypt. The Income Tax Act seems unambiguous on a mechanical interpretation and other than a mechanical interpretation it seems difficult to apply. As we are very active on the subject of crypto assets, we also operate, for example, a crypto platform www.cryptotaxlaw.sk. Our advisors Peter Varga and Vladimíra Mačuhová lectured on this very topic at the last methodical days of the Slovak Chamber of Tax Advisors. The lecture was attended by about 250 tax advisors and representatives of the state, so we had high expectations from the professional level.

The problem of double taxation on payments for goods and services to cryptos is a real issue. The solution cannot simply be sought in the Income Tax Act, nor can it be automatically expected from the application of some ad hoc fairness in taxation (i.e. there is no double taxation because it is unfair). Simply, if a taxpayer receives a crypto asset as consideration for the supply of goods or services, there is a risk that the tax authorities will not be able to attribute an input price tothat crypto asset.

In practice, we encounter a number of options available to some advisers to avoid this phenomenon. However, even more advisers do not even know that such a problem exists. It is therefore with this lecture that we have sought to publicise this problem at a highly professional level to a relevant audience. We are very pleased that the lecture was also attended by relevant representatives of the Ministry of Finance, with whom we were able to discuss the extent of the problem and potential remedies.

If you are interested in this topic, please do not hesitate to contact us.