For tightening the regulations on digital assets and expanding the crypto taxation on crypto trading, Italy is working to impose a 26% tax on digital assets for gains more than 2,000 Euros (~$2,062), as per the budget documentation released on December 01, 2022.
Crypto Tax Regulation in Italy
This step by Italy seems like the country is following similar moves as Portugal. As back in October 2022, Portugal — once known as a cryptocurrency Tax Haven — proposed a 28% tax on capital gains from cryptocurrencies held for less than a year.
While in Italy, a provision in the country’s proposed 2023 budget plans to extend a 26% levy on capital gains to digital assets for profits more than 2,000 Euros ($2,062). Digital coins and tokens so far have been treated as foreign currency by Italy’s tax authorities, which implied a lower taxation.
Historically, digital currencies have had lower tax rates as they have been considered “foreign currency.”
As the proposed bill is signed into law, taxpayers will have the option to declare the value of their digital asset holdings as of January 01, 2023 and pay a 14% tax. This whole happening is intended to incentivize Italians to declare their digital assets on their tax returns.
Tripe A data shows that 2.3% of the Italian population, which equates to about roughly 1.3 Million, owns crypto assets. And by July 2022, it was estimated that around 57% of crypto users were male, while 43% of users were female, with most of its users belonging to the 28–38 age group.
The Italian government provided $46 Million in subsidies for blockchain projects in July 2022 that was aimed to pour investment in technology, research and innovation.
Budget Highlights
On November 22, 2022 the Italian Prime Minister, Giorgia Meloni, spoke during a news conference and presented her government’s first budget in Rome, Italy. The first budget includes some key-points, as-
- The 2023 budget deficit is targeted to fall to 4.5% of gross domestic product from 5.6% this year. The public debt is targeted to edge down to 144.6% of GDP from 145.7% in 2022.
- The budget comprises almost 35 Billion Euros ($35.95 Billion) of increased spending or tax cuts. Some 60% to be financed from increased borrowing and the remaining is to come from targeted tax increases and spending curbs.
- The tax rate rises from 25% to 35% from January to July 2023.
Source: https://www.thecoinrepublic.com/2022/12/02/crypto-tax-update-italy-will-impose-crypto-gains-tax-at-26/