If you are someone who is about to start trading in cryptocurrencies in Austria, getting familiar with the local regulations of taxes and licensing is absolutely a must. We have come up with a short overview of the key principles of cryptocurrency regulation and requirements obligatory for cryptocurrency companies in Austria.
Taxes
The Republic of Austria has a special procedure that defines which cryptocurrency service operators or providers need to apply for an FMA-license and which do not.
Being considered an act of selling in Austria, exchanging cryptocurrency for fiat money is an activity that is taxed. The rate of taxation for individuals that are engaged in such activities is 25%. A rate of 55% is applied to cryptoassets that are viewed as business assets and are held by companies of individuals. Under the condition of being obtained after 12 months, proceeds of cryptoassets held as OTC are not subject to taxation. However, profits that were gained before the 12-month period are subject to 55% rate of tax.
Nonetheless, the regime described earlier is not what happens to “leased” cryptoassets and interest charged for it. For this situation, the rules are different: the tax rate of 27,5% applies to this category of capital gains. Also, it is worth mentioning that the Republic of Austria does not impose VAT on the cryptocurrency exchange.
Obtaining a license
Generally, Austria does not require anything special for engaging in cryptocurrency activities. Yet it is useful to analyze whether each particular cryptocurrency exchange or cryptoasset complies with each trading platform’s requests. The reason is that institutional investors may experience some restrictions.
Cryptoasset brokerage regulation
Basically, it depends on the cryptoasset classification type whether cryptoasset brokerage is regulated or not in Austria:
- If we speak about transferable securities, dealers or brokers are obliged to get an investment or banking license;
- When it comes to commodities, dealers or brokers must conform to the Trade Act and obtain a trade license.
In addition, the Republic of Austria demands a company or an individual to obtain a business license or a banking license if they are engaged in setting a link between loanees and potential loanees.
The final word
To sum up, in this overview we have mainly focused on:
- Regulation of the Austrian cryptoasset brokerage;
- The rules of taxation applied to cryptocurrency companies;
- The licensing regulation for cryptocurrency exchange.
In case you still have some questions about conducting cryptocurrency activities in Austria, do not hesitate to reach out to specialists from COREDO.