Tax Aspect Of Cryptocurrency Trading In Serbia

CURRENT QUESTIONS AND ANSWERS

 

Our law firm receives a large number of questions on a daily basis regarding the tax and legal implications of cryptocurrency trading from various parties.

 

Recently, one of the most common question has been whether – in addition to the capital gains tax rate of 15%, some other taxes and contributions are paid to the income from the sale of cryptocurrencies.

 

In this regard, below is a basic answer to the question that should be sufficient to create an initial idea of ​​what and how to proceed.

 

Also, you can read more about the legal regulation of cryptocurrency trading in Serbia in our guide to cryptocurrencies: https://statt.rs/sr/pravni-vodic-za-kripovalute-u-srbiji

 

  1. ARE COMPULSORY SOCIAL SECURITY CONTRIBUTIONS PAID ON INCOME FROM CRYPTOCURRENCY TRADING?

 

Law on Contributions to Compulsory Social Insurance (“Official Gazette of RS“, No. 84/2004, 61/2005, 62/2006, 5/2009, 52/2011, 101/2011, 7/2012, 8/2013, 47 / 2013, 108/2013, 6/2014, 57/2014, 68/2014, 5/2015, 112/2015, 5/2016, 7/2017, 113/2017, 7/2018, 95/2018, 4/2019, 86/2019, 5/2020, 153/2020 and 6/2021), Article 7, 8 and 9 stipulates that contributions are paid on the basis of employment, appointment to office, professional engagement on the basis of work outside employment, entrepreneurship, membership in companies, performing agricultural, independent or artistic activities, etc.

 

The conclusion is that the payment of contributions is related to some type of employment, and not to the fact that a certain person has earned income – so the income from the sale of digital assets is not subject to payment of contributions for compulsory social insurance.

 

  1. IS VALUE-ADDED TAX PAID ON THE INCOME FROM CRYPTOCURRENCY TRADING?

 

Law on Value Added Tax (“Official Gazette of RS”, No. 84/2004, 86/2004, 61/2005, 61/2007, 93/2012, 108/2013, 6/2014, 68/2014 , 142/2014, 5/2015, 83/2015, 5/2016, 108/2016, 7/2017, 113/2017, 13/2018, 30/2018, 4/2019, 72/2019, 8/2020 and 153/2020, the „Law“) Article 25 paragraph 1 item 1a prescribes:

 

Value added tax (the “VAT“) shall not be paid in the trade of money and capital on the following transactions:

 

1a) transfer of virtual currencies and exchange of virtual currencies for pecuniary funds in accordance with the law governing digital assets;

 

VAT is not paid when transferring virtual currencies and exchanging virtual currencies for funds.

 

This article of the Law does not take into account another form of digital assets – digital tokens.

 

In particular, this means that in each individual case, an assessment and analysis will be made of whether a certain form of digital assets can be subsumed under virtual currency. Otherwise, the taxpayer will be obliged to pay VAT at a rate of 20%.