(NON)TAXATION OF VIRTUAL CURRENCIES ACQUIRED BY DONATION

#19(Non)taxation of virtual currencies acquired by donation

Income obtained by donation is not subject to income tax, neither in the case of natural persons nor legal persons. Therefore, at the time of acquiring the virtual currency by donation, there is no obligation to pay tax on this gift. The tax is paid only for the tax period in which the virtual currency is sold, while the entire income from the sale is taxed, not just the entry price of the given virtual currency.

Consequently, taxation occurs only through the sale of this virtual currency, which according to the Income Tax Act means "exchange of virtual currency for property, exchange of virtual currency for another virtual currency, exchange of virtual currency for the provision of a service or transfer of virtual currency for consideration."

For a natural person - non-entrepreneur - income from the sale of virtual currency represents other income, according to § 8 of the Income Tax Act. In the case of a natural person - an entrepreneur - this virtual currency is included in business assets. According to § 6 par. 1 and 2 of the Income Tax Act, for an entrepreneur, the income from the sale of virtual currency included in business assets is income from a business, for which it is possible to claim a flat rate of 60% (up to a maximum of € 2,000 or real expenses).

In the case of a legal entity, the acquired virtual currency will be valued at fair value (market price from the selected public market) and the legal entity will include such virtual currency in short-term financial assets. The income from the virtual currency will be included in the tax base only at the time of sale of the virtual currency. At the same time, it may recognize costs due to the derecognition of the virtual currency from the asset at fair value at which the virtual currency was measured at the time of free acquisition. As the Income Tax Act does not stipulate the entry price of a virtual currency acquired by donation, the cost of the fair value at which the virtual currency was measured at the time of free acquisition will be a deductible item at the time of disposal.