A crypto tax of 26% has been imposed in Italy. Anyone trading in crypto assets in the country will have to pay the crypto tax starting in 2023. This is part of the efforts of the Italian government to tighten its regulations surrounding digital currencies.
This measure was announced in a new budget and was approved by the country’s parliament last week. According to the new budget, anyone trading in cryptocurrencies will face a 26% capital-gains tax, which will be implemented starting in 2023.
To motivate Italians to disclose their digital asset holdings in their tax returns, Italian Prime Minister Giorgia Meloni’s government has suggested legislation allowing taxpayers to announce their assets’ worth as of January 1, 2023, and pay a 14% tax on the assets.
In Italy, digital currencies and tokens are legally considered foreign currencies according to the present tax rules. It is subject to a lower tax rate. The draft bill is still being revised in parliament. It also requires disclosure and applies stamp duty to crypto assets.
According to reports, approximately 1.3 million Italians own cryptocurrency or 2.3% of the population. By July 2022, it was estimated that roughly 57% of crypto users were male, while 43% were female.
The majority of cryptocurrency users were aged 28 to 38. Italy’s decision to levy a capital gains tax on cryptocurrency comes ahead of the European Union’s Markets in Crypto Assets (MiCA) regulation. It promises to establish licensing frameworks and stringent operational requirements for crypto-service providers in the EU’s 27 member states.
Meloni, the leader of the far-right Brothers of Italy party and Italy’s first female president, has previously advocated for lower taxes. Her government’s tougher stance on cryptocurrency now follows Portugal, one of the EU’s most crypto-friendly members. Portugal announced in October that it intends to tax short-term cryptocurrency profits at a rate of 28% beginning next year.
It also coincides with a global tightening of regulations in the immediate wake of a wave of crypto industry bankruptcies, such as the recent collapse of FTX.