An Ultimate Guide to Crypto Tax in Austria for 2023

While we begin, it is important to note that the regulations governing the taxation of Cryptocurrencies in Austria are constantly being updated, and significant tax reform is scheduled for 2023. Cryptocurrency exchanges such as Koinly make it a point to monitor any new guidelines issued by the BMF very carefully and update their user guides on a consistent basis in order to ensure that their customers remain tax legal as well as educated.

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As of 2023, Austria is ranked 104th in the world in terms of acceptance of Cryptocurrencies. The Austrian BMF lays out in precise detail the taxation implications associated with the usage and ownership of Crypto assets. It thus implies that anyone who trade in or hold digital currencies might be obligated to report their Cryptocurrency-related operations on their tax filings as well as collect income on any gains they made. To avoid fines and stay in good standing with the law, individuals and enterprises in Austria should familiarize themselves with the country’s Cryptocurrency tax legislation as well as guidelines.

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Does Austria have a Tax on Cryptocurrencies?

The British Monetary Fund (BMF) considers Cryptocurrencies to be an invaluable property rather than a fiat money. Nonetheless, according to the Austrian Income Tax Act, Cryptocurrency is treated as income and subject to taxation. The Austrian Crypto tax reform will take effect on March 1, 2022, and will result in a significant shift to the current state of affairs. The new regulation has both positive and negative effects, however in a nutshell, the taxation of Cryptocurrencies in Austria is now the same as that of equities.

How is Cryptocurrency Taxed in Austria?

Both the acquisition as well as the utilization of Cryptocurrency are taxable activities in Austria. Whatever gains or income made through the purchase, sale, or holding of Cryptocurrency should be reported and taxed as ordinary income by the person who generated them. In the past, Cryptocurrency profits that were kept for a year or more before being sold were exempt from taxation. Gains on the sale of Cryptocurrency held for less than a year were taxed at escalating rates comparable to those applied to regular income. The new tax law categorizes Cryptocurrency gains as those from capital assets, which are taxed at a flat rate of 27.5%. Hence, the tax treatment of Crypto assets will depend on the date of acquisition, even if the assets are sold after the tax plan comes into force.

Cryptocurrencies are not recognized as money or legal tender in Austria by the Federal Ministry of Finance. Bitcoins, on the other hand, really aren’t issued or controlled by any centralized bank, but are instead utilized as a medium of exchange or transfer of value between private parties. It should be clearly stated that not all Cryptos fall under the BMF’s view that this term applies to. According to the true form of the token, BMF notes that either NFTs or tokens backed by real assets will be subject to normal tax legislation. It is strongly suggested that anybody who has traded either of these token kinds see a tax expert in Austria for guidance on their unique circumstances.

Is the BMF Capable of Monitoring Crypto?

Your Cryptocurrency activity may be monitored by the BMF. Investors may be sure of one thing in light of Austria’s new Crypto tax reform: the BMF is interested in learning about your Crypto transactions and collecting its due tax. The Austrian Ministry of Finance, following the lead of other European tax authorities like those in Germany and the United Kingdom, would collaborate with major Cryptocurrency exchanges to disclose know-your-customer (KYC) information to verify tax clearance. Also, the European Union’s new data-sharing legislation, Dac8, is scheduled to go into force by the end of the year. The proposed order would provide the BMF the power to verify an individual’s Cryptocurrency holdings, along with access to the books of Cryptocurrency businesses and information about their holdings.

Crypto Tax Reformation

Modifications to the taxation of Crypto assets in Austria are the result of a new law that went into effect on March 1, 2022. The BMF will henceforth treat all profits from Crypto assets the same, whether they are made over the long or short term. Rather, all Crypto asset realized gains are subject to income tax from capital assets at a flat rate of 27.5%, much like bonds as well as stock dividends. For tax purposes, assets traded in the future that were purchased before to this date are exempt from the new regulations. According to the BMF, it shouldn’t be deemed a taxable disposal to trade one Crypto asset for another. Venture capitalists in Cryptocurrencies in Austria aren’t going to be subject to taxation on their holdings unless and until they are converted to a fiat currency like the euro.

Short & Long-Term Crypto Gains Tax in Austria

The prior Crypto tax regulations stipulated that only short-term profits in Cryptocurrency were subject to income tax. It implies you’ll have to pay income tax if you purchase or acquire Cryptocurrency and then immediately spend or trade it after not holding it for more than a year. You won’t have to pay taxes on Cryptocurrency gains if you’ve had them for more than a year.

Realized profits on Cryptocurrency assets in Austria were divided into two categories: long-term and short-term, with the former being exempt from taxation until March 2022. If you’re looking to sell an item and realize a profit, you need to wait at least a year before doing so to count the sale as a long-term gain. Short-term profits are those realized through the sale of an asset held for a period of less than 12 months.
Disclaimer: The author’s thoughts and comments are solely for educational reasons and informative purposes only. They do not represent financial, investment, or other advice.