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Italy Plans to Tax Crypto Trading Gains | CoinGabbar News

  • Italy will begin taxing cryptocurrency at a rate of 26% from 2023, as well as expanding disclosure regulations.

  • The capital gains tax applies only on profits of more than 2,000 euros.

  • Italy's move comes after Portugal, Europe's most crypto-friendly country, proposed a 28% tax on short-term crypto gains.

01 Dec 2022 By: Shailja Joshi
Italy Plans to Tax C

This year, the fallout of the Terra Luna ecosystem, as well as the 

Bankruptcy filings of multiple exchanges, degrade users' confidence in the crypto market. However, Italy has done something that would further erode Italian citizens' trust in cryptocurrencies.

Italy plans to strengthen digital asset regulation and expand taxation on crypto trading from 2023, after similar measures taken by European countries such as Portugal.

As per Bloomberg reports, Italy will begin taxing cryptocurrency capital gains at a rate of 26% from 2023. The tax will only apply to profits of more than 2,000 Euros. The tax charge is being proposed by the country's lawmakers in its budget plans for 2023.

Additionally, taxpayers will be able to report the value of their assets as of January 1, 2023. They will be taxed at a rate of 14% on these returns. This is very much comparable to the new tax regulations enacted in India earlier this year. The Indian government allowed citizens to report their holdings before the higher tax rate was implemented.

The recent development in Italy comes as Portugal, Europe's most crypto-friendly location, announced similar plans to tax cryptocurrency gains. Portugal announced in October 2022 that it intends to levy a hefty 28% tax on short-term gains on digital assets.

Will it Affect the Italian Crypto Enthusiast?

The tax increase will undoubtedly inflame investors in the country, whose capital gains will be reduced. In Italy, over 1.3 million people, or 2.3% of the population, hold cryptocurrencies.

This percentage is nowhere near as high as in some other European countries, but the government clearly wants to put the regulations in place as soon as possible.

The exchanges that are currently operating in Italy will soon experience low trading volume as a result of this hefty tax, as seen in other crypto-taxed countries. However, only time will tell how much these high crypto taxes and regulations would affect Italian investors.

Other Countries Enacted Crypto Taxation 

As mentioned above, Portugal took similar steps in October, levying a 26% tax on cryptocurrency gains. Furthermore, countries such as India, Belgium, Iceland, Israel, the Philippines, and Japan also imposed hefty taxes on crypto gains.

All of the above-mentioned countries' crypto-operating exchanges have experienced poor trading volume for a few months due to FOMO among users. However, as time passes, users will start rebuilding confidence in the crypto market.

What do you think, imposing such a hefty tax on crypto profits is fair for retail investors? Share your views in the comment section below.

Read also: Last Gasp Before The Road to Irrelevance For Bitcoin: ECB