- Italy is reportedly set to reduce its crypto tax limit increase to 28%, amended from its previously proposed 42% increase.
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Italy is reportedly set to reduce its crypto tax limit increase to 28%, amended from its previously proposed 42% increase.
Background
The Italian government had initially proposed raising the country’s crypto tax limit from 12.5% to as high as 42.5% in September 2022. However, after feedback from the crypto industry and stakeholders, the government has now decided to reduce this proposed increase to 28%.
Details of the Revised Tax Limit
- The revised tax limit will be set at 28% for crypto gains over €2,000.
- Gains below €2,000 will still be tax exempt, in line with the current framework.
- The 28% rate is lower than the 26% capital gains tax rate that stocks and bonds are subject to in Italy.
- The revised rate is seen as more favorable for Italian crypto investors and traders.
Industry Feedback on the New Rate
- Crypto industry participants have welcomed the reduction. They see it as an acknowledgement by the government that high tax rates could stifle innovation.
- Stakeholders are relieved that the government listened to feedback from the industry. The 42.5% rate was seen as excessive.
- The 28% rate is still higher than in many other European countries. But it is an improvement from the initial proposal.
Impact on the Crypto Industry in Italy
- The revised 28% tax rate is likely to support the growth of Italy’s crypto sector.
- Excessive taxation could have driven activity underground or stifled adoption of crypto.
- With the more favorable rate, crypto innovation and adoption is expected to continue flourishing.
Conclusion
The reduction of the proposed crypto tax increase in Italy from 42.5% down to 28% is a positive development. It shows the government’s willingness to find a balanced approach to crypto taxation. Though still high, the 28% ceiling is seen as more realistic and manageable by the industry. This should support continued crypto adoption in Italy.
