Highlights. Italy plans to increase capital gains tax on bitcoin from 26% to 42% in order to fund election promises and reduce the budget deficit.
Italy's #bitcoin tax hike reflects similar discussions in the UK and follows the upcoming implementation of the MiCA EU #cryptocurrency regulatory package by the end of the year.
Italy's government plans to more than double the capital gains tax on bitcoin from 26% to 42% as part of a broader fiscal plan to fund costly election promises and reduce the budget deficit.
This decision, which has just been approved by Prime Minister Giorgia Meloni's cabinet, reflects the growing popularity of #cryptocurrencies , according to Deputy Finance Minister Maurizio Leo, who spoke about it at a recent meeting.
This move represents a major change in Italy's approach to taxing cryptocurrencies: in the 2023 tax year, capital gains exceeding 2,000 will be taxed at a rate of 26%. This is a significant change from the previous approach, which classified cryptocurrencies as foreign currency and taxed them at a much lower rate.
It is expected that the new tax rate on bitcoin in Italy will improve the financial situation in the country, but global precedents show mixed results of such a step. For example, India introduced a strict tax on cryptocurrencies two years ago, but trading volumes on the domestic market plummeted as investors went to offshore platforms to avoid the tax. However, Italy is not deterred by this experience and is looking to capitalize on its booming cryptocurrency sector.
Italy's bitcoin tax hike comes as the European Union prepares to implement MiCA rules by the end of the year. The new regulation also aims to create a legal framework for digital assets on the #blockchain . Despite this, bitcoin remained resilient amid the tax news and was trading 1.3 percent higher at $ 68,000 on Wednesday.
Read us at: Compass Investments
