Another European nation, after Portugal, plans to tighten cryptocurrency restrictions and increase taxation on cryptocurrency trade. A clause in Italy’s 2023 budget proposal aims to tax capital gains from cryptocurrency trading at an astounding 26% rate.
However, this tax bracket will be used if the profits from cryptocurrencies exceed 2,000 euros ($2,062.3). Cryptocurrencies and tokens are viewed as foreign currencies by the Italian tax authorities.
Giorgia Meloni, the prime minister of Italy’s newly-elected government, has urged citizens to report the value of their digital assets as of January 1, 2023, and to pay a 14% tax. The intention is to persuade Italians to make their tax returns and digital asset holdings public.
If the draft law is changed by the parliament, stamp duty will also apply to cryptocurrencies and disclosure requirements would be added.
The most crypto-friendly nation in Europe, Portugal, announced similar plans to tax cryptocurrency gains at the same time as the current development in Italy. Portugal announced its intention to impose a hefty 28% tax on short-term earnings from digital assets in October 2022.
Digital assets are currently owned by 2.3% of Italy’s 1.3 million individuals overall. The adoption of cryptocurrencies is still less than that of other countries, such as France at 3.3% and the UK at less than 5%. However, with such high crypto taxes in place, it might discourage more players from entering the crypto space.
However, a number of significant cryptocurrency exchanges have begun expanding into Italy, citing the country’s potential for business. The Italian government approved the establishment of Binance’s facility in the nation earlier this year.
In the most recent development, an Italian regulator has accepted the registration of cryptocurrency service companies Gemini and Nexo. They would thus be able to assist Italian crypto aficionados.
