Greece cryptocurrency tax gap exposed by 620,000 euro dispute

A recent decision by the Direction of Dispute Resolution (DED) in Greece has highlighted a significant legislative gap regarding the taxation of cryptocurrency gains. The dispute arose when a taxpayer attempted to declare approximately 620,323 euros in income derived from Bitcoin transfers using a specific tax code (659) intended for incomes that are either taxed via a special method or are explicitly tax-exempt. The tax authorities rejected this declaration, leading to a legal dispute that was ultimately dismissed by the DED.

The case underscores the challenges faced by thousands of Greek investors due to the absence of a dedicated tax framework for digital assets. Currently, there is no specific code in tax returns for cryptocurrency income, making it difficult for taxpayers to justify large bank transfers or the purchase of assets like real estate using crypto profits.

The Greek government is reportedly preparing a new legislative framework to address this uncertainty. The proposed regulations are expected to include a 15% tax on capital gains and an annual tax-free threshold of 500 euros. Additionally, the implementation of OECD standards for the automatic exchange of information aims to improve transparency and combat tax evasion and money laundering related to crypto assets.