Austria Aims to Boost Crypto Adoption by Taxing Them Like Stocks

Austrian officials say the tax it’s planning to apply to cryptocurrencies, similar to what’s done on mainstream stocks and bonds, is about creating confidence in their viability, according to a Bloomberg report on Tuesday (Nov. 9).

Austria will slap a 27.5% capital gains levy on digital tokens — including bitcoin and Ethereum — starting in March 2022, as part of a larger tax overhaul across the nation. This is the first such levy in the European Union, per the report.

“We are taking a step in the direction of equal treatment, to reduce mistrust and prejudice toward new technologies,” said the Finance Ministry in a statement.

The new Austrian cryptocurrency tax won’t be applied to digital tokens purchased before the planned implementation date next spring, and the tax will only come into play when the tokens are sold. There is already a tax on speculative tokens held for less than a year.

Crypto traders who sell one token to buy another won’t have to pay taxes on those deals, and investors can get compensation against potential losses when they sell their digital coins, according to the proposed rules.

Related news: SEC’s Gensler Urges Cryptos to Work With Regulators for ‘Market Integrity’

Last week, Securities and Exchange Commission (SEC) Chairman Gary Gensler said the strict oversight on cryptocurrency proposed by U.S. regulators will give investors a similar level of protection to what they’d get if they invested in stocks and bonds rather than digital tokens.

Even if new laws emerge from the President’s Working Group on Financial Markets’ recommendations for stablecoin regulations, the SEC would “be very active in trying to bring this market into what I’d call the investor protection framework,” said Gensler in an interview at the Securities Industry and Financial Markets Association’s annual meeting.

Last month, Gensler said the U.S. wasn’t going to ban cryptocurrency, but he thinks the digital coins need investor protections. He called himself “technology-neutral,” adding that it can be a catalyst for change if it’s properly regulated.