Under a new budget bill that received approval from the Italian parliament just last week, cryptocurrency dealers in Italy would be subject to a capital-gains tax of 26% beginning in the year 2023.
The Italian government under Prime Minister Giorgia Meloni has proposed a measure that would provide taxpayers the option of reporting the value of assets as of January 1, 2023, and paying a tax rate of 14 percent. This is intended to encourage taxpayers to disclose their holdings of cryptoassets in their tax returns.
Since the beginning of December, when the draft for the budget bill was revealed, the idea of imposing a capital gains tax on cryptocurrency transactions has been floating about.
The document that was accepted contains a number of incentives for taxpayers to reveal their cryptocurrency holdings. These include a proposal for amnesty on profits obtained, the payment of a replacement tax in the amount of 3.5%, and the addition of 0.5% as a fine for each year.
Crypto isn’t exactly regulated in Italy
In Italy, where cryptocurrency is mostly unregulated, a 387-page budget document legitimizes crypto assets by describing them as a digital representation of value or rights that may be exchanged and maintained digitally using the technology of distributed ledger or a technology that is comparable to it, like the blockchain.
The country is the latest to adopt a capital gains tax on cryptocurrencies, and it comes just before the European Union’s Markets in Crypto Assets (MiCA) law goes into effect, which offers regulatory frameworks and severe operating standards for crypto-service providers inside the EU’s 27-member bloc.
In accordance with the regulation, cryptocurrencies and tokens are to be regarded in Italy in the same manner as foreign currency. It is subject to a reduced rate of taxation.
The proposed legislation is still open for amendments in the parliamentary committee. In addition to that, it extends stamp duty to cryptocurrency assets and contains transparency obligations.
At this time, around 1.3 million individuals in Italy, which corresponds to 2.3 percent of the country’s total population, hold cryptocurrency.
It was anticipated that males made up around 57 percent of cryptocurrency users in 2022, while females made up approximately 43 percent. The vast majority of cryptocurrency users fell within the age bracket of 28 to 38 years old.