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Italy has approved a 26% capital gains tax on cryptocurrencies as part of its budget legislation for 2023, according to a report by Cointelegraph. The new tax rate, which comes into effect on Jan. 1, 2023, applies to crypto-asset trading over 2,000 euros ($2,13).
Under the new legislation, crypto assets are defined as “a digital representation of value or rights that can be transferred and stored electronically, using distributed ledger technology or similar technology.” Previously, they were treated as foreign currencies in Italy and subject to lower taxes.
However, taxpayers in the country will have the option to declare the value of their digital-asset holdings as of Jan. 1 and pay a 14% tax, in an effort to encourage Italians to declare their digital assets.
Giorgia Meloni, the first woman to serve as Italy’s prime minister, received widespread support for the legislation from the legislative body, despite promising dramatic tax cuts when she was elected in September.
The budget law also includes tax amnesties to reduce penalties on missed tax payments, fiscal incentives for job creation and a reduction in the retirement age. It also includes 21 billion euros ($22.4 billion) of tax breaks for businesses and households affected by the energy crisis.
Italy’s legislation follows the approval of the Markets in Crypto Assets (MiCA) bill on Oct. 10, establishing a consistent regulatory framework for cryptocurrency in the 27 member countries of the European Union. MiCA is expected to come into effect in 2024.
