Italy’s Proposed 2023 Budget Includes 26% Tax on Crypto Gains
- This tax bracket, however, kicks in whenever crypto revenues are above €2,000 (approx $2,062).
- A number of large cryptocurrency exchanges have recently expanded into Italy.
Adding to the recent measures taken by Portugal, another European nation plans to increase crypto trading taxes. Italy’s proposed budget for 2023 includes a measure that would impose a whopping 26% tax on crypto-related capital gains.
This tax bracket, however, kicks in whenever crypto revenues are above €2,000 (approx $2,062). Cryptocurrencies and tokens have been treated by Italy’s tax authorities the same way as foreign currency.
As of January 1, 2023, taxpayers in Italy must report the value of their digital assets and pay a 14% tax, according to the newly established government headed by Prime Minister Giorgia Meloni. The objective is to get Italian residents to report their ownership of digital assets and pay their taxes.
Discouraging For New Entrants
If the legislature passes the new amendment, it would add transparency requirements on digital currencies. The latest event in Italy occurred at the same time as Portugal. One of the most crypto-friendly countries in Europe revealed intentions to tax cryptocurrency profits. Short-term profits on digital assets are going to be taxed at a whopping 28% in Portugal, the country’s government said in October 2022.
Currently, 2.3% of Italy’s total population of 1.3 million individuals have some kind of digital asset ownership. France (3.3% adoption) and the United Kingdom (5% adoption) remain behind the United States in terms of crypto adoption. However, imposing such high crypto taxes may discourage new entrants from entering the crypto industry.
Nonetheless, a number of large cryptocurrency exchanges have recently expanded into the Italian market, citing the country’s promising financial prospects. Binance, a major cryptocurrency exchange, received approval from the Italian government earlier this year to establish a presence in the nation.