Italy Introduces New Crypto-Gains Tax in 2023 Budget
- Italy has imposed a 26% tax rate on local traders who profit more than $2,090 per year from crypto trading.
- Italian authorities hope the substitute income tax will encourage native traders to disclose the amount of crypto they own.
- Portugal is another European country to introduce income tax for crypto traders.
The Italian parliament has approved a new budget that would subject crypto traders in the country to a 26% capital-gains tax in 2023. The bill mirrors Prime Minister Giorgia Meloni’s intention to profit from digital assets. As per a Reuters report, the 2023 expansionary budget also includes $22.3 billion in tax breaks to aid households and companies facing energy issues.
The 26% tax applies to crypto trading profits of at least 2,000 euros per tax period. The new initiative also provides a “substitute income tax” for investors as an incentive for disclosing cryptocurrency earnings. So, the tax is set at 14% of the value of the assets held as of January 1, 2023, rather than the cost at the time of purchase.
The new regulations allow losses from cryptocurrency investments to be deducted from earnings and carried forward. However, investors still want guidance on taxable qualification. The document concludes by stating that certain crypto assets are not “fiscal cases.”
The 2023 budget recognizes digital assets by defining them as “a digital representation of value or rights, which can be transferred and stored electronically, using the technology of distributed ledger or similar technology.”
The bill also includes 12 tax amnesties that allow individuals and businesses to compensate for missed payments with lighter penalties, lower the retirement age, and provide financial incentives to promote employment on open-ended contracts.
Italy is yet to roll out a comprehensive regulatory framework for cryptocurrencies. However, other European countries, such as Portugal, have also introduced a capital-gains tax on crypto earnings. The European Union is also set to implement the Markets in Crypto Assets (MiCA) regulation which imposes a strict set of operational rules for crypto service providers in affiliated countries
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
