- The Italian Senate has imposed a 26% capital tax on cryptocurrency trading.
- The tax applies to profits from crypto trading above 2000 euros.
- The 2023 budget law includes several other tax changes apart from the 26% on crypto trading.
The 26% Capital Tax on Cryptocurrencies in Italy
On December 29, 2022, the Italian Senate instituted a 26% capital tax on crypto-assets trading more than 2000 euros as part of its 2023 budget law.
According to the document, a crypto asset is a “digital representation of value or rights that can be transferred and stored electronically, using distributed ledger technology or similar technology.”
Initially, the country treated cryptocurrency assets as foreign currencies, with lower taxes than other national currencies.
More Than The 26% Capital Tax on Cryptocurrencies
The law additionally states that taxpayers will have a choice to state the value of their digital assets starting January 1, 2023, and pay a tax of 14%, incentives that motivate Italian citizens to state their digital assets.
Moreover, losses from crypto investments above 2000 euros within a tax period can be removed from the profits and moved to the next tax season.
The budget law includes other changes, such as tax amenities to lower penalties on tax payments not paid, fiscal incentives to create jobs, and retirement age reduction. The budget legislation also includes 21 billion euros of tax breaks for homes and businesses with problems with the energy crisis.
The bill, proposed by Italy’s Prime Minister, Giorgia Meloni, was warmly received and significantly supported by the legislative body. However, when elected in September, Prime Minister Meloni promised substantial tax cuts.
Crypto Tax in Other Nations
Apart from Italy, several nations also imposed a tax on crypto-assets. For instance, Portugal announced a 28% tax on the crypto capital gain in October 2022. This would only apply to cryptocurrencies owned for less than a year.
Portugal’s 2023 state budget stated:
“Capital gains relating to crypto-assets held for less than one year are subject to the rate of 28% (without prejudice to the aggregation option), with the capital gains referring to crypto assets held for more than 365 days exempt from taxation.”
Other nations like India have also introduced a 30% tax on crypto capital gains. However, the government imposed a 1%TDS on every crypto exchange, deterring locals from participating in the crypto economy.
Closing Thoughts
Italy’s law follows the bill approved on October 10, the Markets in Crypto Assets (MiCA). MiCa, expected to become effective in 2024, creates a consistent regulatory system for cryptocurrency in the 27 member nations of the European Union.
The nation has about 1.3 million crypto holders, almost 2.3 percent of its population. According to reports, as of July 2022, most crypto holders in Italy are between 28 and 38 years.
Italy continuously invests in crypto to encourage people to build shops and get revenues.
