According to a statement put out today by the Hungarian Finance Ministry, under current legislation, Cryptocurrencies fail to qualify as a legal tender, financial instrument, electronic cash or cash equivalent.
Although considered harsh news, it isn’t quite as drastic as it first appears. Hungary is currently investigating the possibility of establishing regulations for crypto instruments. It has been reported that the Hungarian central bank has joined forced with the tax authority and various finance ministries to set up a working group aimed at evaluating the implications of regulating crypyo instruments from an economic, legal, tax and law enforcement perspective.
The Finance Minister said in a statement: “Hungary is currently looking into regulating crypto instruments, and the central bank, the tax authority, the finance ministry and other authorities have set up a joint workgroup to evaluate legal, economic, law enforcement, money laundering and other aspects of cryptocurrencies with an eye to introducing more detailed regulation.”
Until new legislation is brought in, it means that cryptocurrencies are not legal tender in Hungary. The Hungarian government has been quite hostile to the crypto revolution. Hungary’s Personal Income Tax law sees profits from cryptocurrencies as “other income.” It is therefore subjected to 15 percent Personal Income Tax and a further 22 percent Health Contribution.
There have been calls for the European Union to tighten regulation of the crypto sphere. Anti money laundering measures currently in place, are deemed by many as not going far enough when it comes to cryptocurrencies. Individual nations within the European Union are looking to strengthen their own crypto regulation. Hungary isn’t alone in trying to tighten regulation of the cryptocurrency industry. A bill was drafted in the Ukranian parliament just last week which provides for the taxation crypto trading profits. Meanwhile, Malta, has already put in place regulation of the crypto industry which along with slack Maltese taxation levels, has attracted some big players in the crypto world.
