Individuals are expected to pay income tax on gains from cryptocurrency trading, the tax authority of Bosnia has determined. In the absence of dedicated regulations, the federal government in Sarajevo has set up a working group to assess various risks associated with digital assets.
Income Tax Is Due on Profits From Crypto Trades, Bosnia Tax Officials Tell Finance Ministry
The taxation of crypto assets is not explicitly prescribed by Bosnia’s current legislation but the country’s tax authority has addressed the matter in communication with the finance ministry. The latter is responsible for initiating amendments to the tax regulations.
Cryptocurrencies have seen increasing media coverage in the Balkan nation, the capital city of which is soon going to have its first bitcoin ATM, the FENA news agency noted in a report. On this backdrop, the aspect of taxation has also come to the forefront.
According to the Tax Administration of the Federation of Bosnia and Herzegovina, natural persons — independent entrepreneurs and private citizens — should pay income tax on their capital gains from cryptocurrency transactions, in accordance with relevant provisions of the Income Tax Law.
In particular, the authority referred to Article 12, Paragraph 1 of the law which regulates the taxation of self-employed individuals. These are usually people engaged in various activities as their primary or supplementary occupation with the aim of generating income, including income from trading, freelance work, or other independent activities.
Tax officials also cited statements expressing the position of the Federal Ministry of Finance from January and March, last year, when the department indicated that cryptocurrency trading can be viewed as an independent activity with the goal of earning income.
While acknowledging that certain regulations remain ambiguous, the Bosnian tax administration highlighted that the executive power in Sarajevo is moving in the direction of solving the issue. For example, the Cabinet of Ministers decided in November, 2022, to establish a crypto working group under the Ministry of Security.
The body has been tasked to produce an assessment of the risks of money laundering and terrorism financing using virtual assets and crypto service providers in Bosnia in accordance with the methodology developed by the Council of Europe. Along with this report, the group is also expected to submit an action plan to overcome the existing challenges.
Do you think Bosnia will adopt more comprehensive regulations regarding cryptocurrencies and the taxation of related income? Tell us in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, Ajdin Kamber / Shutterstock.com
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.