Greece is moving to establish a formal tax framework for cryptocurrency, with the government proposing a 10% tax on capital gains from the sale or transfer of digital assets.
The measure is included in a new bill from the Ministry of National Economy and Finance currently under public consultation. It seeks to close a long-standing gap in Greek tax legislation over the treatment of cryptocurrencies such as Bitcoin and other digital assets.
The proposed rules would also give taxpayers who made cryptocurrency profits in previous years a 12 month window to voluntarily declare those gains, allowing them to regularise their tax position without fines or interest, provided the conditions set out in the legislation are met.
What will be taxed?
Under the proposed framework, income from capital gains on the transfer of cryptocurrencies would be subject to a 10% personal income tax rate.
A taxable transfer would include:
- Selling cryptocurrency for money
- Using cryptocurrency to purchase goods or services
- Other transfers made for payment
- Contributing cryptocurrency towards the establishment or increase of company or share capital
The taxable gain would generally be calculated as the difference between the cryptocurrency’s acquisition price and its value when transferred.
Transaction costs directly connected to the acquisition or transfer would also be taken into account.
Capital gains of up to €500 per tax year would be exempt from tax.
The legislation also proposes that losses exceeding €500 could be carried forward for up to five years and offset against future cryptocurrency capital gains.
Previous crypto profits can be declared
One of the most significant provisions concerns cryptocurrency acquired or sold in previous years.
The proposed legislation would allow individuals to voluntarily declare capital gains from earlier transfers within 12 months of the law’s publication, without penalties or interest, subject to the prescribed conditions.
Until now, taxpayers who wanted to establish a clear paper trail for cryptocurrency transactions have sometimes reported acquisition and sale values in their tax returns and declared the resulting gain to help justify the source of funds in the event of a tax audit.
The new legislation would provide a formal legal framework for this process.
Crypto-to-crypto exchanges
The proposed rules also distinguish between a taxable disposal and the exchange of one cryptocurrency for another.
Swapping one cryptocurrency for another would not, by itself, trigger a capital gains tax liability.
Tax would instead arise when cryptocurrency is transferred for money, goods, services or another taxable consideration under the rules.
How will the tax authorities calculate the gain?
The acquisition and transfer values would have to be supported by transaction records from cryptocurrency service providers, intermediaries or other data that can be obtained directly from the relevant blockchain or distributed ledger.
For investors who bought the same cryptocurrency at different times, the legislation proposes using an average acquisition price, calculated from the total amount paid divided by the total quantity acquired.
This would provide a standard method for calculating taxable gains where investors have accumulated cryptocurrency through multiple purchases.
Staking, lending and liquidity activities
The bill also addresses income generated through cryptocurrency-related activities.
Returns from activities including crypto lending, liquidity provision and staking or participation in transaction validation mechanisms would be treated as interest income and taxed at 10%.
Where cryptocurrency is received through these activities, its acquisition value would generally correspond to the value on which the relevant interest tax was calculated.
If that value cannot be established, the acquisition price would be treated as zero.
Cryptocurrency used to buy goods
Using cryptocurrency to purchase goods or services would also constitute a transfer for tax purposes.
The transfer value would be based on the cryptocurrency’s euro value at the time of the transaction.
That amount would then become the acquisition value of the cryptocurrency for the person receiving it in exchange for the goods or services.
Inheritance and gifts
The bill also sets out rules for cryptocurrency received through inheritance, gifts or parental transfers.
For inheritance and gift tax purposes, cryptocurrencies would be treated as intangible movable property located abroad, with their value determined in euros on the day before the relevant tax liability arises.
The acquisition value for the recipient would be based on the value used to calculate the relevant inheritance, gift or parental transfer tax, or the value for which an exemption was granted.
No digital transaction fee
The proposed framework would not impose a Digital Transaction Fee on cryptocurrency sales.
The government is therefore seeking to establish a clearer system under which cryptocurrency investors can report their gains, document the origin and value of their holdings and comply with Greek tax obligations.
The legislation remains under public consultation and could be amended before it is submitted to Parliament.
