Current global conflicts have caused significant changes in \nfinancial markets \u2013 from inflationary pressures to increased \nvolatility on stock exchanges. In such conditions, Bitcoin \ninitially experienced a sharp decline, followed by a period \nof stabilization, though with continued pronounced \nfluctuations in value. Experienced investors see such \ncycles as an opportunity for \u201centry\u201d, as these kinds \nof market corrections have proven to be good entry \npoints \u2013 provided there is adequate knowledge and a \nwell-defined strategy. In such situations, the tax aspect \nis often overlooked, which is why proper tax planning \nin the field of digital assets \u2013 especially during the \nrealization of potential profits in a bull cycle, when the \nvalue of digital assets reaches its peak \u2013 is a key component \nof a sustainable investment strategy. Starting from the \ncurrent situation, and taking into account both those who are planning to enter the digital asset market and \nthose already present, the following text provides an \noverview of the tax treatment of digital assets for both \nindividuals and legal entities.<\/p>\n\n
How and in what ways can digital assets be acquired
\nin the Republic of Serbia?<\/strong><\/p>\n\n The acquisition of digital assets is permitted for both
\nindividuals and legal entities in accordance with the
\nLaw on Digital Assets. In practice, it is most commonly
\ncarried out through foreign online platforms such as
\nCrypto.com and Binance, as well as through domestic
\nservice providers related to digital assets (so-called crypto
\nexchanges), such as ECD and Crypto12. Both exchanges
\nhold operating licenses issued by the National Bank of
\nSerbia, which makes them legally authorized platforms
\nfor the purchase and sale of digital assets, for both
\nindividuals and legal entities.<\/p>\n\n In the world of digital assets, miners play an important
\nrole, as they provide the hardware infrastructure
\nnecessary for the functioning of the blockchain. They can
\nbe understood as a type of validator of all transactions
\ncarried out on the blockchain, and for their efforts, these
\nvalidators receive a form of reward \u2013 namely, units of a
\ncryptocurrency associated with that blockchain. Mining
\nis one way of acquiring digital assets under Serbian
\nlaw, in accordance with Article 6, paragraph 2 of the Law
\non Digital Assets. From a tax perspective, the relevant
\nprovisions are those of the Law on Personal Income
\nTax and the Law on Corporate Income Tax, since both
\nindividuals and legal entities may engage in mining.<\/p>\n\n When individuals engage in \u201cmining,\u201d they generate
\nincome outside of a registered activity, and such income
\nis therefore subject to tax on other income at a rate of
\n20%, with the recognition of standardized expenses.
\nOn the other hand, income earned within a registered
\nactivity is taxed as income from self-employment at a
\nrate of 10% (Law on Personal Income Tax, Article 38).
\nAs for legal entities, income generated from mining is included in taxable profit, which is subject to a 15% tax
\nrate after the deduction of expenses, in accordance with
\nthe Law on Corporate Income Tax. Any legal entity or
\nentrepreneur that acquires virtual currencies must notify
\nthe National Bank of Serbia. However, if a legal entity
\npurchases them through a domestic licensed crypto
\nexchange, the exchange itself reports to the National
\nBank of Serbia. Individuals who hold or trade virtual
\ncurrencies are not subject to a reporting obligation to
\nthe National Bank of Serbia.
\n<\/p>\n\n Minting is a process somewhat similar to mining, but it
\nrefers to the creation of tokens. It is a process in which
\nan individual independently creates or converts a digital
\nfile (such as an image or video) into a unique, fungible,
\nor non-fungible token (NFT), which is permanently
\nrecorded on the blockchain. This process serves as proof
\nof ownership and authenticity, making the content secure.
\nFrom a tax perspective, capital gains tax at a rate of 15% is
\npaid on the difference between the documented minting
\ncosts and the income generated from the sale of the
\ncreated token. Holders of digital tokens are not subject
\nto a reporting obligation to regulatory authorities. The
\nNational Bank of Serbia records only virtual currencies.<\/p>\n\n Tax treatment of the disposal of digital assets<\/strong><\/p>\n\n Holding digital assets in ownership on a hardware or
\nsoftware wallet is not subject to taxation. However, the
\ndisposal of digital assets may result in a capital gain or
\ncapital loss and therefore constitutes a \u201ctax event\u201d, in
\naccordance with the Law on Personal Income Tax and the
\nLaw on Corporate Income Tax. In the case of generating
\na capital gain, which represents the difference between
\nthe acquisition price (i.e., the price at which the digital
\nasset was obtained) and the selling price, the taxpayer
\nis obliged to pay capital gains tax at a rate of 15%. In the
\ncase of generating a capital loss, i.e. when digital assets
\nare sold below the price at which they were purchased,
\nif the taxpayer can document the moment of \u201centering
\ninto crypto\u201d (for example, with an exchange statement or
\na transaction screenshot), such a capital loss may later
\nbe used to offset capital gains tax when another digital
\nasset is sold. If an individual does not have proof of the
\nacquisition value, the tax is calculated on the entire selling
\nprice. Individuals are required to submit a capital gains
\ntax return within 120 days after the end of the quarter
\nin which the gain was realized through the sale (Form PPDG-3R), while legal entities and entrepreneurs report
\ncapital gains after the end of the calendar year, when
\npreparing their annual financial statements.<\/p>\n\n Tax Reliefs<\/strong><\/p>\n\n \u2022 If the taxpayer is an individual or entrepreneur,
\nthe obligation to pay capital gains tax does not arise if
\nthe digital assets were owned for at least 10 years before
\ntheir sale.<\/p>\n\n \u2022 The Law on Personal Income Tax (ZPDG)
\nprovides for a 50% exemption from capital gains tax for
\na taxpayer who, within 90 days from the sale of digital
\nassets, reinvests the proceeds into: (1) the share capital
\nof a company that is a tax resident of Serbia, or (2) the
\ncapital of an investment fund established in accordance
\nwith domestic regulations, provided that the fund\u2019s place
\nof business is located within the territory of the Republic
\nof Serbia. The legislator also sets the condition that the
\ncompany into which such funds are invested must not
\nreduce its capital in the year in which the investment
\nwas made, nor during the following two years. Otherwise,
\nthe taxpayer loses the right to the tax exemption and is
\nobliged to notify the tax authorities.
\n<\/p>\n\n \u2022 If the investment is made after the expiration
\nof 90 days from the sale of digital assets, but within 12
\nmonths from the sale, instead of a tax exemption, the
\ntaxpayer is entitled to a refund of 50% of the paid capital
\ngains tax. In any case, the tax return must be submitted.<\/p>\n\n \u2022 Amendments to the Corporate Income Tax Law
\nprovide that a legal entity\u2019s capital gain will not be taxed
\nif the taxpayer, within the same calendar year, invests in
\nthe share capital of a company or an investment fund
\nestablished in accordance with domestic regulations,
\nprovided that the center of business activities of such
\ncompany is also located in the Republic of Serbia.<\/p>\n\n Is the acquisition of digital assets by gift a taxable event?<\/strong><\/p>\n\n With the amendments to the Property Tax Law in 2020,
\nthe scope of inheritance and gift taxation was expanded
\nto include digital assets. If the taxpayer is in the first
\nline of inheritance in relation to the deceased or donor,
\nthey are exempt from inheritance and gift tax. If the
\ntaxpayer is in the second line of inheritance in relation
\nto the deceased or donor, they will pay tax at a rate of
\n1.5%. In all other cases, the tax rate for transfer by gift
\nor inheritance is 2.5%.<\/p>\n","protected":false},"excerpt":{"rendered":" Current global conflicts have caused significant changes in
financial markets \u2013 from inflationary pressures to increased
volatility on stock exchanges. In such conditions, Bitcoin
initially experienced a sharp decline, followed by a period
of stabilization, though with continued pronounced
fluctuations in value. Experienced investors see such
cycles as an opportunity for \u201centry\u201d, as these kinds
[…]<\/p>\n","protected":false},"author":3,"featured_media":1784,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"slim_seo":{"title":"Digital assets in the light of the global crisis: Between investment opportunity and tax treatment - T-S Legal","description":"Current global conflicts have caused significant changes in
financial markets \u2013 from inflationary pressures to increased
volatility on stock exchanges"},"footnotes":""},"categories":[18],"tags":[],"class_list":["post-1785","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-views"],"_links":{"self":[{"href":"https:\/\/t-s.legal\/en\/wp-json\/wp\/v2\/posts\/1785","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/t-s.legal\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/t-s.legal\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/t-s.legal\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/t-s.legal\/en\/wp-json\/wp\/v2\/comments?post=1785"}],"version-history":[{"count":0,"href":"https:\/\/t-s.legal\/en\/wp-json\/wp\/v2\/posts\/1785\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/t-s.legal\/en\/wp-json\/wp\/v2\/media\/1784"}],"wp:attachment":[{"href":"https:\/\/t-s.legal\/en\/wp-json\/wp\/v2\/media?parent=1785"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/t-s.legal\/en\/wp-json\/wp\/v2\/categories?post=1785"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/t-s.legal\/en\/wp-json\/wp\/v2\/tags?post=1785"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}