Italy: Budget Law Approved with Cryptocurrency Taxes at 26%
On Saturday, December 28, Italy's budget law for 2025 was finally approved.
This is also an important law for Italians who own cryptocurrencies, because it contains an article specifically dedicated to the taxation of crypto capital gains.
Cryptocurrency taxation in Italy: the new budget law
Article 43 of the bill 1330 definitively approved by the Senate establishes the rate of the substitute tax on capital gains and other miscellaneous income at 26 percent.
This article is intended to address a problem that was only discovered in October regarding cryptocurrency taxation.
In fact, originally this rate, in Article 5 of Legislative Decree No. 461 of 21 November 1997, was 12.5%, later increased to 26%. However, when it was increased to 26% in that Article 5, crypto assets (or cryptocurrencies) were not yet included, and when they were later included, the original rate had to be applied.
Now, however, the 26% rate has been clearly applied to all types of goods included in Article 5 of Legislative Decree No. 461 of 1997.
Increased taxation on cryptocurrencies
The increase in taxation on crypto capital gains to 42% that was initially included in the budget law has thus been definitively avoided.
This increase was removed from the new text that was presented and approved by Parliament, but another one was added.
In fact, Article 24 of the new text, now definitively approved, establishes that starting from 1 January 2026, the substitute tax on capital gains generated by the sale of goods included in Articles 5, 6 and 7 of Legislative Decree 461 of 21 November 1997, will be applied at the rate of 33 percent.
This means that for crypto capital gains generated in 2025, the current rate of 26% will apply, while from 2026 onwards, the rate of 33% will apply.
However, there will still be time to intervene and modify this new rate between now and the end of 2025. It is by no means certain that this will be achieved, so for now this measure must be considered definitive, but it is not impossible to imagine that it could be modified.
The 26% rate for 2025, on the other hand, can no longer be changed in practice.
The elimination of the exemption threshold
However, there is another bad news for Italian cryptocurrency holders.
In fact, Article 25 abolishes the exemption threshold of 2,000.
When cryptocurrencies were regulated in Italy, at the end of 2022, an exemption threshold of €2,000 was introduced.
In other words, if the annual sum of all capital gains and losses generated in a year from the sale of cryptocurrencies did not exceed the threshold of €2,000, they could be left undeclared. In this way, one was not obliged to pay taxes on them.
Now, however, to align the tax regime of cryptocurrencies with that of other financial assets, this threshold has been removed, so in theory you will have to pay 26% even if the annual sum of crypto capital gains and losses is only €1.
Revaluation at 18%
The 2025 budget law also introduces a revaluation.
Article 26 provides for the option to pay a substitute tax of 18 percent on cryptocurrencies held on January 1, 2025.
Therefore, those who are unable to recover or demonstrate the purchase cost of cryptocurrencies held on that date, or do not wish to do so in order to avoid paying 26% on any capital gains generated by sales, can opt for this optional solution, provided that the tax is paid by 30 November 2025.
To calculate the amount of this tax, it will be sufficient to calculate 18% of the value in euros of the cryptocurrencies held on January 1, 2025, completely ignoring the purchase cost.
This tax can also be paid in installments of up to three equal annual installments, with an annual interest rate of 3% on the two installments following the first.
The reactions
Reiterating that the budget law has now been definitively approved, and will therefore certainly come into force starting from 1 January 2025, it must be said that the reactions have not been very positive.
On the one hand, there were those who rejoiced that the tax increase to 42% on crypto capital gains, previously announced with great fanfare by the Ministry of Economy, was completely avoided, but on the other hand, there were protests.
The first protest is for the elimination of the exemption threshold of €2,000, given that the vast majority of Italians who own cryptocurrencies hold them for a value lower than this amount.
However, from this point of view, it should be emphasized that this threshold was a specific anomaly that only concerned cryptocurrencies, in Italy, and therefore its removal does nothing but equate them to other financial assets.
Instead, the tax increase to 33% for 2026 has no other justification than to raise funds.
From this point of view, the protests are not only justified, but are also inevitably numerous, given that it is effectively an increase in the tax burden in a country where it is already high.