Taxation and Accounting of Cryptocurrencies from The Point of View of the Czech And Slovak Republic

Abstract

The submitted article deals with currently a very topical issue, which is cryptocurrencies. The goal of the article is to analyse cryptocurrencies from an accounting and tax point of view in the Czech and the Slovak Republic. Due to the complexity of all aspects, the paper is focused exclusively on personal income tax. The content of the article is also the characteristic of cryptocurrencies, comparison of differences between selected countries. Practical application of cryptocurrency taxation based on two model situations makes also a part of the article. The biggest difference between these two countries is that Slovakia has this issue processed legislatively. On the other hand, the Czech Republic does not. Another difference is the accounting capture of cryptocurrencies. In the Czech Republic, cryptocurrencies are accounted for inventories, while in Slovakia they are accounted for short-term financial assets. The last major difference is the point of view of transaction fees. In the Czech Republic, these are considered as tax-deductible costs compared to Slovakia. In both countries, operations with cryptocurrencies are taxed similarly according to the personal income tax, and at the same time the method of taxation depends on whether the income from this activity is received as part of a business or not.