🌎 Italy May Raise Crypto Capital Gains Tax to 42%

Italy Contemplates Raising Crypto Capital Gains Tax to 42%

Italy is considering a significant increase in its capital gains tax on cryptocurrencies, aiming to address the country’s fiscal deficit. The proposed hike would raise the tax from 26% to 42%, potentially impacting Bitcoin holders and other crypto investors.

Government’s Response to Growing Crypto Usage

During a recent conference call, Italy’s Deputy Finance Minister Maurizio Leo highlighted the rapid growth of cryptocurrency usage. He noted that the phenomenon is spreading quickly, prompting the government to consider the tax increase. However, no specific timeline for the implementation of the new tax has been provided.

Global Trends in Crypto Taxation

Italy is not alone in its approach to crypto taxation. Other countries, such as India, have also faced similar challenges. In India, crypto trading and mining profits are subject to a flat 30% tax. Staking income is taxed based on the individual’s income tax slab, potentially offering a lower rate.

Potential Impact on Italy’s Crypto Landscape

The potential tax increase comes as Italy prepares to adopt the European Union’s Markets in Crypto-Assets (MiCA) regulations, set to take effect by the end of 2024. These changes could significantly reshape Italy’s crypto environment.

In July, Bank of Italy Governor Fabio Panetta suggested that MiCA, which includes provisions for electronic money tokens and asset-referenced tokens, may conflict with existing Italian law. This hints at a possible selective implementation of these guidelines.