In Italy, there are approximately 1.3 million people with digital assets, representing 2.3% of the population. Until now, the applicable tax laws for cryptocurrency transactions in the country were foreign currency. With them, the withdrawals from the crypto traders’ gains were relatively tolerable. But the Italian government has just made a decision that will definitely not benefit crypto investors.
A 26% tax on trading profits
In a recent article, Bloomberg revealed that Italy is planning to impose a tax on crypto trading profits. A provision in the country’s 2023 budget proposal states that the tax that will be collected is 26%. The tax will apply to trading profits above €2,000, or approximately $2,062.3.
The bill that includes this measure was presented by the government of Italian Prime Minister Giorgia Meloni. It can be changed in Parliament as part of the approval process. In addition, it stipulates that consumers will be able to declare their crypto holdings as of January 1, 2023.
Citizens who do so pay only 14% tax on their declarations. This measure aims to incentivize Italian taxpayers to include their crypto holdings in their tax returns. In addition, the bill extends the stamp duty to also include digital assets.
Would Italy try to follow Portugal?
The 26% taxation of crypto trading gains in Italy comes after Portugal announced a similar measure. In fact, during the month of October, Portugal presented a plan for the short-term taxation of digital assets. Despite being among the most crypto-friendly countries in Europe, it has set it 28% tax.
At the same time, the Indian government has also chosen to propose new tougher tax laws. He announced his decision some time ago and allowed taxpayers to file their returns earlier. It thus gave Indian investors time to declare their crypto holdings before the effective application of a high tax.
India, Portugal and Italy have decided to apply stricter rules when it comes to crypto regulation. The 3 countries made their decision in a context where large crypto companies are going bankrupt. So it seems they have been emboldened by the recent spate of spectacular collapses in the emerging industry.
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Far from dampening my enthusiasm, a failed cryptocurrency investment in 2017 only increased my enthusiasm. I therefore decided to study and understand blockchain and its many uses and with my bullet to pass on information regarding this ecosystem.