Italy will become the latest country to introduce a capital gains tax regime on cryptocurrencies. The new law which becomes applicable in 2023, will impose a 26% capital gains tax on crypto profits and will require crypto holders to disclose current holdings and pay a 14% tax on any such holdings.
According to reports by Bloomberg, Italy will become the newest European nation to take advantage of the digital trading scene. In the provision budget for 2023, proposed by the right-wing government led by Prime Minister Giorgia Meloni, a 26% tax will be imposed on capital gains exceeding €2,000 ($2,062) made from trading crypto. Prior to this, cryptocurrencies were treated in the same way as foreign currency by the country’s tax regime. Italy’s ruling coalition, elected in September, also offers taxpayers the option to declare the value of their crypto assets as of January 1, 2023, to which they will be taxed at a 14% rate. The goal of the new tax regime is to stimulate Italian taxpayers to disclose their crypto holdings in their tax regime. The proposed law, which may still be amended in parliaments, will also include disclosure obligations and extends stamp duty to cryptocurrencies.
Bloomberg’s report further states that around 1.3 million Italians, or 2.3% of the population, own digital assets. In comparison, in the United Kingdom, 5% of the population owns crypto assets, while 3.3% do in France.
Meloni, the country’s first female head of the executive branch of power and leader of the far-right Brother of Italy party, previously campaigned for lower taxes. The Prime Minister’s new, stricter, approach to crypto assets comes as Portugal, one of the European Union’s most pro-crypto regions, revealed in October its plans to tax short-term crypto profits at 28%.
The new tax plans come amid a time when a prolonged market crisis precipitated the collapse of many large crypto platforms. The fall of these firms and a wave of bankruptcy that has swept through the market, including the most recent collapse of crypto exchange FTX, have regulators globally increased their scrutiny of the nascent asset class.
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