Italy approves 26% capital gains tax on cryptocurrencies

On Dec. 29, 2022, days before the year’s end, Italy’s Senate approved its budget for 2023, which included an increase in taxation for crypto investors — a 26% tax on capital gains on crypto-asset trading over 2,000 euros (approximately $2,13 at time of publication).

The approved legislation defines crypto assets as “a digital representation of value or rights that can be transferred and stored electronically, using distributed ledger technology or similar technology.” Previously, crypto assets were treated as foreign currencies in the country, with lower taxes.

As reported by Cointelegraph, the bill also establishes that taxpayers will have the option to declare the value of their digital-asset holdings as of Jan. 1 and pay a 14% tax, incentives that are intended to encourage Italians to declare their digital assets.

Other changes introduced by the budget law include tax amnesties to reduce penalties on missed tax payments, fiscal incentives for job creation and a reduction in the retirement age. It also includes 21 billion euros ($22.4 billion) of tax breaks for businesses and households dealing with the energy crisis.

Giorgia Meloni, the first woman to serve as Italy’s prime minister, received wide support for her bill from the legislative body, even though she promised dramatic tax cuts when elected in September.

According to local media reports, measures from Italy’s government to reduce gas consumption across the country including over 15 days without central heating for buildings, with the population being asked to turn their heating down one degree and turn it off one hour more per day during the winter.

Italy‘s legislation follows the approval of the Markets in Crypto Assets (MiCA) bill on Oct. 10, establishing a consistent regulatory framework for cryptocurrency in the 27 member countries of the European Union. MiCA is expected to come into effect in 2024.