Italy’s crypto gains taxation update comes barely weeks after Portugal unveiled its tax plans for digital assets.
As part of its 2023 budgetary plans, Italy will begin taxing crypto gains at about 26% tax for profits greater than $2062. While the bill may be amended in parliament, it shows the government’s interest in taking a tougher stance on digital assets.
Prior to the announcement, digital assets attracted lesser taxes and were treated as foreign currency. According to Triple-A data, only 1.3 million people, equivalent to 2.3% of the population, own crypto assets in Italy. In comparison with the UK and France which have 5% and 3.3% respectively, Italy still has a long way to go.
With the current bill to tax crypto gains more, there are suggestions this may prevent more crypto holders from jumping on board.
According to the bill, taxpayers who declare their digital assets by January 1, 2023, will only pay 14% as tax. Prime Minister Giorgia Meloni believes this will encourage Italians to declare their digital asset holdings when making tax returns. Additionally, the bill also includes disclosure obligations and gives stamp duty to cryptocurrencies.
Like Portugal, Like Italy
Italy’s crypto gains taxation update comes barely weeks after Portugal unveiled its tax plans for digital assets. Portugal set a tax rate of 28% for short-term crypt asset gains.
Previously, the country levied taxes on digital assets earned from professional sources. With Portugal’s new law, only those who profit after holding crypto for less than a year will pay tax.
Hard on Crypto Gains, Soft on Registration
While Italy has gone decidedly hard by imposing a 26% levy on crypto gains above $2062, there are suggestions its stance on regulating crypto companies is not as tough as some others.
Recently, Gemini and Nexo obtained their Italian operating license, allowing them to provide crypto services to Italians. They joined the likes of Coinbase, CoinList, Crypto.com, and Binance, who have all obtained licenses from the OAM.
Co-founder and Managing Partner of Nexo Antoni Trenchev said:
“As we expand across Europe, we continue to work in tandem with national and international regulators and policymakers to ensure that we are meeting the necessary regulatory requirements in all new markets.”
Regardless, with the MiCa bill ready to kick off in 2023, regulatory action is expected to increase.
An experienced writer with practical experience in the fintech industry. When not writing, he spends his time reading, researching or teaching.
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