As per previous tax legislation, gains from the sales of cryptocurrencies used to be considered commercial and industrial profits, in the event of usual and continuous activity, and as non-commercial profits in the events of occasional activity. With this categorization, taxpayers were subjected to different rates which could get to as much as 45%.
The Council of State has moved to rule partially in favor of the claimants under the above case. The institution has decided to reconsider the way gains stemming from the sale of cryptocurrencies are regulated and it now sees them as profits made of “movable property”.
This means that they are to be taxed with a flat rate of 19%, which is substantially lower than the previous position, even if you add the Generalized Social Contribution (CSG) of up to 17.2%.
The Council of State also communicated that there would be “certain circumstances specific to the transaction of crypto assets which may imply that they fall under provisions relating to other categories of income”.
In other words, if the capital gains have resulted from activities other than cryptocurrency-related sales but “bitcoin mining”, for example, they would fall under the category of commercial and industrial profits under the previous regimen, irrespective of whether or not the activity was occasional. Hence, these profits will be taxed at the higher rate of 45%.