Greece battles crypto taxation headaches amid rise in adoption

Authorities and investors in Greece have expressed concern about the lack of clear regulatory and tax frameworks for cryptocurrencies. Their concerns come as digital asset adoption reaches new levels in the country.

Also read: EU’s AI Act to impact foreign companies with compliance costs

Greece has experienced a spurt in cryptocurrency adoption in the country recently. The growth in digital asset adoption has been driven by young adults, especially those around the of 30. Greece’s interest in digital assets started growing since the financial crisis which began in 2009.

Greece sets September deadline for recommendations

According to Statista, cryptocurrency penetration in Greece is expected to hit 61% by the end of 2024 while the number of users should reach about 6 million by 2025. As the percentage of the population holding crypto grows, Greek authorities have started to convene so that the country may activities within contain and also to fully enjoy the benefits of these digital assets.

By its own admission, Greece does not have an adequate legal framework to govern the growing industry. Tax authorities are concerned about investors downplaying their profits while others do not report their earnings at all.

According to Greek City Times, the country does not fully and officially recognize cryptocurrencies, which leaves a “legislative void that some investors are exploiting.”

As part of efforts to address the thorny issues around digital assets usage, the country set up a dedicated committee which is currently finalizing recommendations for the Ministry of National Economy and Finance. The recommendations are expected to clearly outline cryptocurrency, taxation, and monitoring of the sector.

Greece planning a 15% tax rate for crypto gains

The Greek City Times report claims that sources close to the developments have indicated the country is looking at classifying crypto profits as “capital gains from securities sales.” As such, it will be subject to a 15% tax rate. According to the report, this legislation will be a significant step towards regulating the crypto sector, which is experiencing exponential growth in the country.

Currently, the crypto tax system is not mentioned in the country’s Income Tax Code, although guidelines from the Independent Authority for Public Revenue suggest gains from Bitcoin transactions “may be liable to income tax.”

Also read: Federal Reserve’s Jerome Powell changes his strategy for cutting rates

With a clear regulatory framework in place, the country can provide clarity to investors while authorities tax the sector effectively and close the “existing tax gap.”

Greece is not the only country working on a tax framework for its crypto sector. Although the implementation of the crypto tax has been delayed and postponed, South Korea has also been working on a framework to tax crypto trading profits. The taxation on crypto gains was set to take effect on January 1, 2025, but the country has proposed to postpone it by three years.