The new government of Italy plans to impose a 26% tax on capital gains from crypto trading, according to the draft budget for next year. The center-right coalition in power is also preparing to oblige Italians to declare their digital assets and pay 14% on their holdings.
Government in Italy Intends to Tap Into Cryptocurrency Profits
The authorities in Rome look poised to expand and tighten the regulations for disclosure and taxation of digital assets. The change is likely to come with Italy’s 2023 budget which is expected to target profits from crypto wealth and trading.
A provision in the budget, proposed by the right-wing government led by Prime Minister Giorgia Meloni, extends to crypto assets a 26% levy on capital gains exceeding a threshold of 2,000 euros (approx. $2,080), Bloomberg reported.
The ruling coalition, which was elected in late September, also offers taxpayers the option to declare the value of their digital assets as of Jan. 1, 2023 and be taxed at a 14% rate. The goal is to stimulate Italian taxpayers to disclose their holdings in their tax returns.
Under the current tax rules, digital currencies and tokens are treated in Italy as foreign currency which is subject to lower taxation. The draft law, which may still see amendments in parliament, also introduces disclosure obligations and extends stamp duty to cryptocurrencies.
Around 1.3 million Italians (2.3% of the country’s population) own crypto assets, the report notes, quoting Triple A data. That compares to the United Kingdom’s 5%, and 3.3% in neighboring France.
Meloni, Italy’s first woman to head the executive branch of power in Rome and leader of the far-right Brothers of Italy party, has previously campaigned for lower taxes.
Her government’s stricter stance on crypto now is a move in the footsteps of Portugal, one of the EU’s most crypto-friendly members, which revealed in October its intention to tax short-term crypto profits at 28% from next year. It also comes amid a global tightening of regulations following a wave of bankruptcies in the crypto industry such as the recent collapse of crypto exchange FTX.
Do you think Italian lawmakers will back the proposed increase in the tax burden on crypto investors? Tell us in the comments section below.