Crypto-assets

Crypto-assets are treated as property within the meaning of subsection 1 of § 15 of the Income Tax Act.

Income tax is charged on gains derived from the transfer, including exchange, of crypto-assets (subsection 1 of § 15 and subsection 1 of § 37 of the Income Tax Act).

If a private person derives income from trading by buying, selling or exchanging crypto-assets for other crypto-assets or fiat currencies, the income received must be declared in table 6.3 or 8.3 of the income tax return as gains from the transfer of other property.

Gains are calculated on a transaction-by-transaction basis as the difference between the selling price and the purchase price of the crypto-asset, or as the difference between the price of the asset received in exchange and the purchase price of the crypto-asset being exchanged.

The acquisition cost (purchase price) of crypto-assets may be increased by fees related to the use of crypto-asset trading platforms (subsection 6² of § 38 of the Income Tax Act) and documented expenses directly related to the sale or exchange, e.g., transaction fees, brokerage fees (subsection 1 of § 38 of the Income Tax Act).

Only sales or exchange transactions from which gains were derived must be declared. Each transfer transaction, including an exchange transaction, is treated as a separate tax object for the purposes of taxing the property.

Transfer transactions carried out on a platform without MiCA authorisation that result in a loss cannot be taken into account for tax purposes and cannot be declared. This is because loss can be taken into account for tax purposes only in the case of a transfer of securities under the conditions laid down in § 39 of the Income Tax Act. Crypto-assets that are not acquired through MiCA-authorised platform/service provider do not qualify as securities and their transfer is treated as a transfer of property for tax law purposes (subsection 1 of § 15 of the Income Tax Act).

If a private person uses crypto-assets to pay for goods and services, the income received must be declared in table 6.3 or 8.3 of the income tax return as gains from the transfer of other property. If the crypto-asset has already been taxed (e.g. as a salary, board member’s remuneration or dividend) and is subsequently used to pay for goods or services, only the increase in the value of the crypto-asset from its acquisition to the moment it is used to pay for the goods or services is subject to income tax. The amount previously subject to income tax can be declared as the acquisition cost.

The gains are calculated on a transaction basis as the difference between the price of the property received in exchange for the use of the crypto-asset and the purchase price of the crypto-asset used.

With the amendment to the Income Tax Act that entered into force on 1 January 2025, crypto-assets acquired through a crypto-asset service provider or from an issuer of crypto-assets that has obtained the right to offer crypto-assets or provide crypto-asset services on the basis of MiCA authorisation are treated as financial assets (clause 10 of subsection 2 of § 17¹ of the Income Tax Act). For the purposes of deferring income tax liability, crypto-assets treated as financial assets may be acquired and transactions in crypto-assets carried out in an investment account system.

Income tax is charged on gains derived from the transfer, including exchange, of crypto-assets (subsection 1 of § 15 and subsection 1 of § 37 of the Income Tax Act). From the gains derived from the transfer of crypto-assets acquired through a crypto-asset service provider or from a crypto-asset issuer with MiCA auhtorisation, loss incurred from the transfer of crypto-assets during the same period may be deducted (subsection 1³ of § 39 of the Income Tax Act). The gains or loss are calculated on a transaction-by-transaction basis as the difference between the selling price and the purchase price of the crypto-asset, or as the difference between the price of the asset received in exchange and the purchase price of the crypto-asset being exchanged. The acquisition cost (purchase price) of crypto-assets may be increased by fees related to the use of crypto-asset trading platforms (subsection 6² of § 38 of the Income Tax Act) and documented expenses directly related to the sale or exchange, e.g., transaction fees, brokerage fees (subsection 1 of § 38 of the Income Tax Act).

Gains derived or loss incurred through a platform with MiCA authorisation must be declared in Table 6.1 or 8.2 of the income tax return. The tax return must include the date of acquisition and transfer of crypto-assets and the name of the platform. The acquisition date indicates whether the respective platform was authorised as MiCA at the time and whether the respective crypto-asset is can be declared on the same basis as a financial asset. Crypto-asset type must be reported as “crypto-asset”.

Example of how to declare a transfer on your income tax return

A list of crypto-asset service providers authorised in a Contracting State can be found in the “Interim MiCA Register” section of ESMA’s website  “Markets in Crypto-Assets Regulation (MiCA)”. If a company obtains MiCA authorisation, the information will be updated in the list file.

If a person has also transferred other financial assets during the period of taxation from which a loss has been incurred during the entire period of taxation, the person may deduct the loss from the gains derived from the transfer of crypto-assets. If, in total for the tax period, a person has incurred a loss from the transfer of crypto-assets, the loss may be deducted from gains derived from the transfer of other financial assets (subsection 2 of § 39 of the Income Tax Act). If the loss incurred from crypto-assets exceeds the gains derived from crypto-assets during a tax period, the loss may be carried forward and deducted from gains earned in subsequent tax periods (subsection 3 of § 39 of the Income Tax Act).

If a private person uses crypto-assets to pay for goods and services, the income received must be declared in table 6.1 or 8.2 of the income tax return as gains from the transfer of other property. The use of income from crypto-assets already taxed as remuneration, board member remuneration or dividend for the purchase of various goods or services is also subject to taxation, but in this case the person has the right to declare as acquisition cost the amount subject to income tax as remuneration or dividend.

The gains are calculated on a transaction basis as the difference between the price of the asset received in exchange for the use of the crypto-asset and the purchase price of the crypto-asset used.

The first column of the following table lists activities that may generate income from transactions involving crypto-assets.

The following columns show in which table of the income tax return the income received must be declared, depending on how and where the income was generated (e.g., Estonian or foreign platform, whether the platform has MiCA authorisation or not, whether the income has already been taxed or not, etc.).

✓ indicates that it must be declared in the corresponding table.
 ^* indicates that the acquisition cost is the amount previously paid as tax.
^** indicates that the acquisition cost is zero.