Italy to Raise Capital Gains Tax on Bitcoin Transactions

To raise more revenue to fund its 2025 budget, the Italian government is considering raising capital gains tax on cryptos, including Bitcoin (BTC). 

Maurizio Leo, the Deputy Economy Minister of Italy, revealed the development today during a news conference at Palazzo Chigi. 

Italy Considers Raising Crypto Tax Gains to 42% 

He said the Italian government could raise the withholding tax on Bitcoin’s capital gains from 26% to 42%. 

This proposal is part of the 2025 budget bill that the Council of Ministers recently approved. For context, the Italian government introduced the 26% levy in 2022 for the country’s 2023 budget. At the time, all crypto-related transactions worth over €2,000 ($2,178) were subjected to a 26% tax on capital gains. 

The government plans to raise the levy to 42%, as proposed in the 2025 budget. Following the increase, Bitcoin traders must pay a fee of €840 ($915) for a €2,000 BTC transaction. Currently, traders pay €520 ($566) tax for transacting a similar amount with the current rate of 26%.   

In the meantime, the Italian Parliament has yet to approve the new tax measures, with a final vote expected by the end of the year. 

Government Eliminates Web Tax Threshold 

Furthermore, the proposed bill also seeks to eliminate the minimum revenue thresholds for the country’s Digital Service Tax (DST), popularly referred to as web tax. 

It is worth mentioning that the web tax was introduced in Italy’s 2019 budget. At the time, the Italian government imposed a 3% levy on digital firms boasting a minimum revenue of €750 million ($817.13 million), with €5.5 million ($5.5 million) of this sum raised in Italy. 

Since introducing the web tax, the Italian government has raised about €400 million (approximately $436 million). Italy proposing to remove the minimum condition for the web tax could raise more funds. However, Leo did not provide an estimate of what the government should expect. 

Nonetheless, the revenues generated from the enhanced tax levies, including the hike in Bitcoin’s capital gains, would fund part of the country’s 2025 budget, worth about €30 billion ($33 billion). 

Additionally, taxes generated from banks and insurance companies, amounting to around €3.5 billion ($3.81 billion), are expected to fund part of the budget. The government plans to use the tax generated from financial and insurance institutions to improve public services.