After Portugal, another European country is set to toughen crypto regulations and further expand taxation on crypto trading. A provision in Italy’s 2023 budget plan seeks to levy a staggering 26% tax on capital gains derived from crypto trading.
However, this tax slab will be applicable if the crypto profits are larger than 2,000 euros ($2,062.3). Italy’s tax authorities have been seeing cryptocurrencies and tokens as foreign currencies.
Italy’s newly appointed government led by Prime Minister Giorgia Meloni has asked taxpayers to declare the value of their digital assets as of January 1, 2023, and pay a 14% tax. The goal is to encourage Italian citizens to disclose their digital asset holdings and their tax returns.
The proposed law, if amended in the parliament, will extend stamp duty to cryptocurrencies and shall also include disclosure obligations.
Crypto Taxes In Italy and Across Europe
The recent development in Italy came as Europe’s most crypto-friendly destination – Portugal – announced similar plans to tax crypto gain. In October 2022, Portugal said that it plans to levy a massive 28% tax on short-term gains on digital assets.
As of now, 2.3% of Italy’s total population of 1.3 million people own digital assets. The crypto adoption is still below that of other nations such as France at 3.3% and the UK at below 5%. But with such heavy crypto taxes in place, it might serve as a deterrence for more players to participate in the crypto space.
However, a number of major crypto exchanges have been making a move into Italy citing potential business opportunities here. Earlier this year, the Italian government gave a green light to crypto exchange Binance to set up its base in the country.
In the latest development, crypto service providers Nexo and Gemini have been approved for registration with an Italian regulator. As a result, they would be able to serve crypto enthusiasts in Italy.