Italian Parliament Approves Capital Tax on Crypto Gains, Offers Tax Breaks

• The Italian Parliament has approved a 26% capital tax on cryptocurrency gains as part of the 2023 budget law.
• The budget law includes incentives for taxpayers to declare their cryptocurrency holdings, such as a 3.5% aliquot for undeclared cryptocurrencies held before Dec. 31, 2021, and a 0.5% fine for each additional year.
• Taxpayers can also cancel their capital gains tax at 14% of the price of cryptocurrency held on Jan. 1, 2023.

The Italian Parliament has recently approved a new capital tax on cryptocurrency gains as part of its 2023 budget law. This law is set to take effect in 2023 and aims to encourage citizens to disclose their cryptocurrency holdings and pay taxes accordingly.

The approved budget law includes a 26% aliquot for cryptocurrency gains above 2,000 euros (approx. $2,060) during a tax period. To encourage taxpayers to declare their cryptocurrency holdings, the document also offers incentives such as a 3.5% aliquot for undeclared cryptocurrencies held before Dec. 31, 2021, and a 0.5% fine for each additional year.

The budget law also allows taxpayers to cancel their capital gains tax at 14% of the price of cryptocurrency held on Jan. 1, 2023. This is significantly lower than the price paid when the cryptocurrency was purchased, thus being a beneficial incentive for taxpayers. Similarly, cryptocurrency losses higher than 2000 euros in a tax period will count as tax deductions and will be able to be carried out to the next tax periods.

The Italian Parliament’s approval of this new law is set to have a positive effect on the country’s cryptocurrency industry, as it provides a clear framework for taxation and incentivizes taxpayers to declare their holdings. This will ensure that all cryptocurrency activities are conducted in a transparent manner, and that all taxes due are properly paid. As such, the Italian Parliament’s approval of this law is an important step towards the regulation of cryptocurrency in Italy.